Characterizing the corporate governance of Taiwan listed real estate development and construction companies

• Main Authors: Yi-Jing Wang, 王依靜
• Other Authors: Hui-Yu Chou
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/19039646536621106517

碩士 === 朝陽科技大學 === 營建工程系 === 104 === After the 1997 Asia Financial Crisis, Taiwanese businesses continued to be faced with operational and management crises as a result. To mitigate the situation, strengthening the level of corporate governance was seen as beneficial to the cause. Prior research focused on companies listed in the stock exchange and/or over-the-counter (OTC) market in Taiwan revealed that the degree of corporate governance implementation in the construction industry is comparatively lower than that of other industries domestically. However the link between the findings and whether they are related to any specific industry characteristics remains a topic in need of further research. This study focused on the “family-owned businesses” characteristic that is more prevalent within the construction industry compared to other industries, specifically whether this characteristic may have any relation to the degree of corporate governance implementation. The rating system used to determine the degree of corporate governance in this study was adapted from “Corporate Governance Evaluation System” established in 2014 by the Corporate Governance Center of the Taiwan Stock Exchange. The subjects for evaluation in this study were selected from companies that were listed in the stock exchange or OTC market and classified under the construction and building materials category (including companies categorized as either construction or building companies). The results of the study showed that among the five major categories of corporate governance implementation evaluation, the highest degree of implementation in the construction industry was “Information Transparency”, whereas the lowest was “Corporate Social Responsibility”. From the perspective of individual indicators listed under each of the respective five major categories, the indicators showing the highest degrees of corporate governance implementation were “Disclosure of information in a company annual reports”, “Execution and disclosure of company internal control statements”, “Disclosure of company financial statements and business plans”, and “Establishment of measures ensuring employee welfare and action plans for providing safe working environments”. Indicators that demonstrated low degrees of corporate governance implementation include “Appointment of more independent directors than required by law”, “Preparation and publication of corporate social responsibility report”, and “Disclosure of annual emissions of CO2 or greenhouse gases”, among others. Focusing on the family-owned business characteristic, the statistical results of the evaluated companies showed that non-family-owned businesses scored slightly higher in the degree of corporate governance implementation when compared to family-owned businesses. However, when analyzed from a statistical standpoint, the test of family-owned against non-family-owned businesses did not pass the difference testing measures, therefore making it difficult to confirm whether the family-owned business characteristic has any effect on the degree of corporate governance implementation. Next, from examining the comparison between company types, building companies listed in the stock exchange or OTC market scored slightly higher statistically than construction companies in the degree of corporate governance. Yet, this occurrence also did not pass difference testing, making the prospect that company type may have an effect on the degree of corporate governance implementation inadmissible. This would imply that even by separating companies in the construction industry as either building type or construction type companies the prevalence of the family-owned business characteristic did not appear to have much effect on the degree of corporate governance implementation. However, if the building type and construction type companies are further separated by listings on either the stock exchange or the OTC market, the results showed significant differences between the two in terms of degree of corporate governance implementation. When only looking at the companies listed on the stock exchange, building type companies scored higher than construction type companies in the degree of corporate governance implementation. Conversely, focusing on the companies listed on the OTC market, a marked difference was also present between the scores, where construction type companies showed higher degrees of corporate governance implementation than building type companies.