Corporate governance in Taiwan: Empirical evidence from Taiwanese company directors

In this paper we present empirical evidence on the attitudes of Taiwanese company directors on the role and function of the board of directors in Taiwanese corporate governance. Our findings arise from a questionnaire survey distributed to the directors of a sample of companies listed on the Taiwanese Securities Exchange (TSE). Our findings provide a picture of the current state of corporate governance in Taiwan. The respondents indicate that the board of directors constitutes the most important instrument in Taiwanese corporate governance and our findings endorse the important role played by outside directors in the corporate governance system in Taiwan. Furthermore, the respondents endorsed the agency theory perspective on corporate governance as they considered the presence of outside directors improved corporate accountability to shareholders. There is, however, evidence that few companies have created remuneration and audit committees. We also found that Taiwanese directors are dissatisfied with the influence of families on the corporate governance of listed companies and do not consider that outside directors on boards should be related to founding families. Overall, the directors displayed an awareness of accountability issues and a desire to improve accountability and transparency. They clearly want international harmonisation of corporate governance standards and view corporate governance reform as a means of attracting foreign funds into Taiwan. This is an important finding as it endorses the work of the OECD and other international bodies in harmonising corporate governance at a global level.