December 2023
Introduction of the Amendments to Taiwan's Regulations Governing Information to be Published in Annual Reports of Public Companies
December 2023
Teresa Huang and Yuki Chiang
To enhance the transparency in director remuneration of listed and OTC-traded companies and promote the ESG Sustainable Development Action Plan for Listed and OTC-traded Companies, the Financial Supervisory Commission (hereinafter, the "FSC") amended Articles 10 and 23 of the Regulations Governing Information to be Published in Annual Reports of Public Companies (hereinafter, the "Annual Report Regulations") on November 10, 2023, but Schedule 2-2-3 of Article 10 will go effect on January 1, 2024. The Amendments include key points as below:
1. Enhancing transparency in director remuneration: Listed and OTC-traded companies are now required by FSC to disclose the remuneration of individual directors in annual reports under the following circumstances(refer to Article 10 of the amended Annual Report Regulations):
(1) The listed and OTC-traded companies have ranked with the last “two” levels in the most recent annual corporate governance evaluation.
(2) The listed and OTC-traded companies reported an increase of 10% or more in after-tax net income last year but the average annual salary of non-supervisory full-time employees has not increased relative to the previous year.
(3) The listed and OTC-traded companies have reported a decline, reaching10% in after-tax profit, and losses over NT$5 million, and the remuneration of each director (not including the compensation of those who are also employees) has increased on average by 10% and exceeded NT$100,000.
2. Additional disclosures on ESG-related information:
(1) A listed and OTC-traded company should now disclose its greenhouse gas reduction record year, reduction target, strategy, and action plan (see Schedule 2-2-3 of the amended Annual Report Regulations).
(2) An open-ended form is used to allow a listed and OTC-trade company to flexibly specify the status of its original greenhouse gas inventory and verification (see Schedule 2-2-3 of the amended Annual Report Regulations).
(3) Enhanced disclosure on fire incidents, including the number of incidents, casualties, and fire safety management awareness (see Schedule 2-2-2 of the amended Annual Report Regulations).
3. Promotion of earlier submission of annual reports: According to the requirements under the ESG Sustainable Development Action Plan for Listed and OTC-traded Companies, it is progressively required that listed and OTC-trade companies with a capital of NT$2 billion or more should submit their annual reports earlier to the competent authority 14 days before their shareholders' meetings (see Article 23 of the amended Annual Report Regulations).
For more information about these Amendments, please visit the FSC's announcement at: https://www.fsc.gov.tw/ch/home.jsp?id=96&parentpath=0,2&mcustomize=news_view.jsp&dataserno=202310310007&dtable=News.
In addition, information on the ESG Sustainable Development Action Plan for Listed and OTC-traded Companies, please refer to the Firm's article “The Evolution Path of the Sustainable Development Action Plan for Listed and OTC-traded Companies (Taiwan)"
Teresa Huang and Yuki Chiang
To enhance the transparency in director remuneration of listed and OTC-traded companies and promote the ESG Sustainable Development Action Plan for Listed and OTC-traded Companies, the Financial Supervisory Commission (hereinafter, the "FSC") amended Articles 10 and 23 of the Regulations Governing Information to be Published in Annual Reports of Public Companies (hereinafter, the "Annual Report Regulations") on November 10, 2023, but Schedule 2-2-3 of Article 10 will go effect on January 1, 2024. The Amendments include key points as below:
1. Enhancing transparency in director remuneration: Listed and OTC-traded companies are now required by FSC to disclose the remuneration of individual directors in annual reports under the following circumstances(refer to Article 10 of the amended Annual Report Regulations):
(1) The listed and OTC-traded companies have ranked with the last “two” levels in the most recent annual corporate governance evaluation.
(2) The listed and OTC-traded companies reported an increase of 10% or more in after-tax net income last year but the average annual salary of non-supervisory full-time employees has not increased relative to the previous year.
(3) The listed and OTC-traded companies have reported a decline, reaching10% in after-tax profit, and losses over NT$5 million, and the remuneration of each director (not including the compensation of those who are also employees) has increased on average by 10% and exceeded NT$100,000.
2. Additional disclosures on ESG-related information:
(1) A listed and OTC-traded company should now disclose its greenhouse gas reduction record year, reduction target, strategy, and action plan (see Schedule 2-2-3 of the amended Annual Report Regulations).
(2) An open-ended form is used to allow a listed and OTC-trade company to flexibly specify the status of its original greenhouse gas inventory and verification (see Schedule 2-2-3 of the amended Annual Report Regulations).
(3) Enhanced disclosure on fire incidents, including the number of incidents, casualties, and fire safety management awareness (see Schedule 2-2-2 of the amended Annual Report Regulations).
3. Promotion of earlier submission of annual reports: According to the requirements under the ESG Sustainable Development Action Plan for Listed and OTC-traded Companies, it is progressively required that listed and OTC-trade companies with a capital of NT$2 billion or more should submit their annual reports earlier to the competent authority 14 days before their shareholders' meetings (see Article 23 of the amended Annual Report Regulations).
For more information about these Amendments, please visit the FSC's announcement at: https://www.fsc.gov.tw/ch/home.jsp?id=96&parentpath=0,2&mcustomize=news_view.jsp&dataserno=202310310007&dtable=News.
In addition, information on the ESG Sustainable Development Action Plan for Listed and OTC-traded Companies, please refer to the Firm's article “The Evolution Path of the Sustainable Development Action Plan for Listed and OTC-traded Companies (Taiwan)"
