FSC Enhances Clarity of Domestic Banks' Independent Directors' Authority, Participants Express Support

(Central News Agency reporter Su Ssu-yun, Taipei, July 17) The Financial Supervisory Commission (FSC) held a forum today for independent directors of domestic banks, with nearly 90 independent directors participating. The FSC explained the 'Operating Procedures for Matters Assisted or Investigated by Independent Directors of Financial Holding Companies and Banks,' aiming to clarify the authority of independent directors. Participants also made institutional recommendations regarding corporate resource provision, and the FSC will continue to review the system.

The FSC hosted the domestic bank independent director exchange forum today, focusing on three main topics: strengthening integrity in financial institution operations, enhancing the functions of independent directors, and promoting inclusive finance. Nearly 90 independent directors participated.

An FSC official explained to the Central News Agency that, first, regarding integrity in business operations, observations from domestic and international penalty cases show that all management regulations and laws must ultimately return to corporate culture and behavior to avoid formalism.

The FSC has also requested the Bankers Association of Taiwan to draft the 'Guidelines for Conduct and Culture Management in the Banking Industry,' aiming to establish a common framework and methodology through industry-wide discussions to guide banks in building internal cultural standards.

Second, to assist independent directors in fulfilling their duties, the FSC issued the 'Operating Procedures for Matters Assisted or Investigated by Independent Directors of Financial Holding Companies and Banks' on February 13 this year for industry reference, further clarifying independent directors' authority.

According to the procedures, independent directors may participate in assisting with three major issues: major financial decisions, related-party transaction reviews, and integrity in operations. They may also assist in three types of investigations: reports of improper conduct by senior management, inappropriate involvement in operations by major shareholders violating corporate governance, and whistleblower reports. Additionally, independent directors may conduct investigations and, when necessary, seek assistance from external experts, legal counsel, or accountants, with related costs borne by the company.

The FSC stated that most participants expressed agreement with this direction. Some independent directors also offered practical suggestions and institutional recommendations regarding corporate resource provision, and the FSC will continue to review and strengthen the system where needed.

The FSC also briefed independent directors on case examples from certain banks regarding the promotion of age-inclusive financial policies. (Editor: Pan Yi-ching) 1150717