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

TEJ Dictionary

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”.

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)

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

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TEJ 為台灣本土第一大財經資訊公司,成立於 1990 年,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、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