FSC nixes em­ployee rep­re­sen­ta­tive idea

The China Post - - LOCAL - BY JOHN LIU

A pro­posal made by leg­is­la­tors that listed com­pa­nies should have at least one board direc­tor com­ing from the ranks of em­ploy­ees to watch over la­bor in­ter­est con­tra­dicts reg­u­la­tions from the Com­pany Act, said the Fi­nan­cial Su­per­vi­sory Com­mis­sion (FSC, ).

The Leg­isla­tive Fi­nance Com­mit­tee is sched­uled to re­view 17 amend­ment pro­pos­als for the na­tion’s fi­nance laws such as the Se­cu­ri­ties and Ex­change Act and the Fi­nan­cial Con­sumer Pro­tec­tion Act.

Demo­cratic Pro­gres­sive Party (DPP) law­maker Hsu Chih-chieh ( ) has sug­gested amend­ments to the Se­cu­ri­ties and Ex- change Act com­pany, so that listed cor­po­ra­tions are obliged to have em­ployee board mem­bers, or to have em­ployee rep­re­sen­ta­tives in the re­mu­ner­a­tion com­mit­tee to watch for la­bor in­ter­ests.

Pro­po­nents of the amend­ment be­lieve a com­pany’s in­de­pen­dent di­rec­tors, su­per­vi­sors and la­bor rep­re­sen­ta­tive will form an “iron tri­umvi­rate” that en­sures the com- pany car­ries out its so­cial re­spon­si­bil­i­ties while ex­e­cut­ing ef­fec­tive gov­er­nance.

How­ever, the FSC con­tends that the pro­posal con­tra­dicts with the ex­ist­ing Com­pany Act which dic­tates that board mem­bers should be elected by share­hold­ers.

In ad­di­tion, the FSC said, the Se­cu­ri­ties and Ex­change Act al­ready has rules on in­de­pen­dent di­rec­tors, the au­dit com­mit­tee and the re­mu­ner­a­tion com­mit­tee that aug­ment board func­tion­al­ity and cor­po­rate gov­er­nance.

The FSC is re­port­edly back­ing a dif­fer­ent pro­posal sub­mit­ted by DPP law­maker Lee Ying-yuan (

), who sug­gested that en­ti­ties that seek to ac­quire real es­tate in­vest­ment trusts (REITs) should dis­close their ten­der of­fer in­ten­tion.

Lee ar­gued that REITs are sim­i­lar to other se­cu­ri­ties, en­dow­ing ben­e­fi­cia­ries with vot­ing rights, and should be reg­u­lated in the same way to pre­vent sud­den price fluc­tu­a­tions.

The pro­posed ad­just­ment to the Se­cu­ri­ties and Ex­change Act says en­ti­ties look­ing to ac­quire 10-per­cent stakes should pub­li­cize their ten­der of­fers.

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