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PJ Asset Management Shareholder Proposal to Amend the Number of Board Directors to "9 to 15" to be Included on the Taishin FHC and SinoPac FHC AGM Agendas

2019-04-30 09:22 683

TAIPEI, , April 30, 2019 /PRNewswire/ -- PJ Asset Management (PJAM), with more than 1% shareholding, submitted shareholder proposals for the Annual Shareholders' Meetings (AGM) of Taishin Financial Holdings (Taishin FHC) and SinoPac Financial Holdings (Sinopac FHC), which will be held separately on June 14, 2019. The proposal is to amend the Articles of Incorporation to increase the number of board seats to a range of 9 to 15 which would be applicable to the next board re-election. PJAM is pleased that both proposals were accepted by the boards of Taishin FHC and Sinopac FHC on April 25 and 26 respectively, and it will be included in the discussion agenda of both companies' upcoming AGM.

The average number of directors on the boards of both international financial institutions as well as domestic financial holding companies in Taiwan, is 13 and PJAM has considered this in its recommendation. The company has also considered international best practices, the ongoing development of both financial holding companies, their size and scope, as well the goal of strengthening corporate governance when submitting its proposal. If these resolutions have successfully passed, it would require Taishin FHC to expand its board from the current 7 directors to at least 9 for its next board election while it would ensure that Sinopac FHC does not reduce the number of seats on its board below the current 9.

The OECD's six principles of corporate governance are:

a) ensuring the basis for an effective corporate governance framework;
b) the equitable treatment of shareholders;
c) the rights of shareholders and key ownership functions;
d) the role of stakeholders in corporate governance;
e) disclosure and transparency; and
f) the responsibilities of the board.

Ensuring that the board works efficiently and effectively is the cornerstone of corporate governance. The board of directors is responsible for guiding the company's strategy while monitoring management performance, taking accountability for the company and upholding shareholders' rights. The board of directors must fulfill their fiduciary duties and make objective decisions and exercise independent judgment in various scenarios. Therefore, additional board seats can contribute to a more diversified board in terms of thought and experience which can have a significant impact on the company's value and business growth.

PJAM strongly urges fellow shareholders of both Taishin FHC and Sinopac FHC to support PJAM's shareholder proposal. It is PJAM's common goal to monitor its investees to encourage the strengthening of corporate governance and ultimately enhance the companies' overall value.

Range of the number of directors specified by the Articles of Incorporation of
Domestic Financial Holding Companies

Name

Minimum # of directors

Maximum # of directors

Current # of Directors on the Board

Hua Nan

15

21

19

Fubon

9

15

15

Cathay

9

21

12

China Development

9

15

9

E.SUN

13

13

13

Yuanta

9

15

13

Mega

15

21

14

Taishin

7

9

7

Shin Kong

15

21

15

Waterland

13

13

13

SinoPac

7

11

9

CTBC

7

11

7

First

15

21

15

Jih Sun

11

11

11

Taiwan Cooperative

15

21

15

Average

11.0

15.6

12.3

Median

12.0

15.0

13.0

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Source: PJ Asset Management
collection