Internationalization of Corporate Reporting and Corporate Governance Reports
Regulators of Taiwan's capital markets have laid great emphasis on Internationalization in recent years, including issues of corporate governance. In order to facilitate their integration with international markets, entities including the Taiwan Stock Exchange Corporation (TSE) and Financial Supervisory Commission (FSC) not only require complete adoption of International Financial Reporting Standards (IFRS) but now also mandate ongoing corporate governance evaluations on the part of local listed companies. Furthermore, one of the most important components for evaluation is a firm's Corporate Social Responsibility (CSR) Report.
This year, a total of 131 Taiwan listed companies registered English versions of their shareholder's meeting handbook, an increase of 64% compared to 80 reports in 2014. Of note, companies providing English versions of their annual reports meanwhile rose 34% to 107. Alternatively, those listed companies without incentive to internationalize company reports mostly consist of traditional industries or family businesses. For the next three years, these listed companies can expect to remain at the current management situation.
The Corporate Way of Life
Although "Englishization" of annual reports and CSR reports are the starting point for gaining international exposure, it's a crucial first step. Indeed, a rendering in English itself is insufficient. CSR reports are required to have the correct corporate governance system to first be in place; and even if that part is adequate, there is still the question of correct usage of industry terminology and wording. In short, a hastily translated annual or CSR report would generate the opposite of positive attention, raise red flags in the minds of investors and stakeholders and possibly defeat the whole purpose. The practical effect can be seen in that even among those companies producing English reports, the associated rankings often remain barely satisfactory.
Oftentimes companies settle on a “Chinglish” report, a report missing industry terminology or one having improper usage of grammar and vocabulary.When the report is considered unprofessional, companies not only waste translation expenses but fail to achieve the purpose set forth for such publications. In principle, accurate English reports must be legible to foreign readers. Only when translation quality is challenged within its current form will companies publish reports on par with international standards, allowing companies to win the favor of international investors.
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