| Summary: | 碩士 === 南台科技大學 === 財務金融系 === 98 === According to the Article 26 of Taiwanese Securities and Exchange Law, the body of directors or supervisors as a whole must own a specified percentage of its total outstanding shares in a public company. The purpose of this legislation was obviously linked to corporate governance. However, it actually required substantial connection between management and ownership, and thus apart from the mainstream of modern business thinking. This paper aims to investigate the suitability of the unique legal requirement. The empirical study is based on TEJ Database and the results are discussed in detail. The results indicated that regardless of listed traditional companies, OTC technological companies, and OTC traditional companies, more insiders’ shareholdings are significantly positive associated with operational performance. But more insiders’ shareholdings fail to enhance the operational performance of listed technological companies. On the other hand, insiders’ shareholdings have significantly positive effect on the corporate governance measure of traditional industries while insiders’ shareholdings not significantly influence the corporate governance measure of technological industries. In conclusion, this regulation would poise to create dissimilar impact to corporate governance and operational performance in different situations. Therefore, legal and regulatory confines should be more carefully consider.
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