The Revision of Taiwan’s Company Law: The Struggle Toward a Sharholder-Oriented Model in One Corner of East Asia

Christopher John Gulinello 

Proponents of the theory of global convergence of corporate governance argue that corporate governance regimes around the world are converging toward one system-the dispersed-ownership/capital market model with a corporate governance system emphasizing the interests of shareholders. This article suggests that actual global convergence may be an unachievable myth, but the process toward greater protection of shareholder interests and a more efficient dispersed-ownership system in a particular jurisdiction should be an observable phenomenon.

This article proposes that if Taiwan were in transition toward a shareholder-oriented and/or dispersed-ownership model, we would expect it to be reflected in the recent revisions to Taiwan’s Company Law. This article argues that the recent revisions indeed show that Taiwan is addressing controlling shareholder expropriation, which is essential to protecting shareholder interests in a concentrated-ownership system like Taiwan. In addition, the increased importance that the revisions place on the role and accountability of the professional manager indicate that dispersion of ownership is already factoring into the corporate governance of the Taiwanese firn Whether Taiwan continues down this path of shareholder protection and dispersed ownership remains to be seen.