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【TEJ Dictionary】What is the corporate Governance Evaluation System? The influence on companies

TEJ Dictionary

What is the Corporate Governance Evaluation System?

In Dec. 2013, The Financial Supervisory Commission(FSC) announced the “corporate governance enhancement blueprint” for 5 years. The FSC considers the corporate governance evaluation system an important working point to make corporate governance receive more attention.

TWSE and TPEx entrust security & futures institute to establish the corporate governance evaluation system, which is constructed in 4 dimensions, namely “Protecting Shareholder Rights and Interests and Treating Shareholders Equitably”, “Enhancing Board Composition and Operation”, “Increasing Information Transparency”, and “Promoting Sustainable Development”.

The influence on companies

Some studies indicated that there was a positive relationship between corporate governance and stock returns & performance. (Shiue et al. 2018; Shiue, Chiou, & Chiu. 2017)

Therefore, we can say that companies with high ratings in the corporate governance evaluation system usually have better operation and financial performance. According to the 2021 result, there are 7 class intervals, namely 5%, 6%-20%, 21%-35%, 36%-50%, 51%-65%, 66%-80%, and 81%-100%. And, there are 46 companies in the top 5% interval.

Companies in the top 5% (Source: Security & futures institute)

Location of Database

We can inquire about the result of the corporate governance evaluation system each year. The intervals are slightly different in the corporate governance evaluation system every year, so TEJ develop 7 intervals from A+ to D- which is easy to make a comparison between years.

📍Click Taiwan Market DB(TEJ TAIWAN DB)➡️TEJ Corporate Social Resiponsibility➡️TWSE Evaluation

If you have any further queries or suggestions regarding the TEJ database, please do not hesitate to send your inquiries or ideas by phone or by email to us.

☎️: 02–87681088

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TEJ 台灣經濟新報

TEJ 台灣經濟新報

TEJ 為台灣本土第一大財經資訊公司,成立於 1990 年,專門提供金融市場基本分析所需資訊,以及信用風險、法遵科技、資產評價、量化分析及 ESG 等解決方案及顧問服務。鑒於財務金融領域日趨多元與複雜,TEJ 結合實務與學術界的精英人才,致力於開發機器學習ML、人工智慧AI及自然語言處理NLP等新技術,持續提供創新服務