Shareholder Return

Shareholder return is the mechanism by which a company distributes its after-tax profits to shareholders, primarily in the form of cash and stock dividends. According to Taiwan's Company Act, Article 228, the board of directors shall prepare proposals for the distribution of earnings to be submitted to the shareholders' meeting for resolution. Additionally, a company may buy back its own shares for transfer or cancellation via a board resolution under Article 167-1, which increases earnings per share and is also considered a form of shareholder return.

In Taiwan, shareholder return is a key indicator in the Corporate Governance Evaluation, particularly under the "Protecting Shareholder Rights and Interests and Treating Shareholders Equitably" dimension. A strong shareholder return policy can improve evaluation rankings, attracting institutional and foreign investors. Conversely, a weak policy may damage market confidence and stock prices. The Financial Supervisory Commission (FSC) also guides companies to enhance their shareholder return mechanisms through its "Corporate Governance Roadmap" and "Sustainable Development Action Plans" to boost the capital market's global competitiveness.

Shareholder return policies are directly related to ISO 37000:2021 Governance of organizations — Guidance. This standard emphasizes that an organization should generate long-term value for all stakeholders, with shareholders being one of the key groups. The standard's principle of "Stakeholder engagement" requires the governing body to understand and respond to stakeholder expectations; establishing a fair and transparent shareholder return policy is a concrete application of this principle.

As Taiwan's first consultancy to integrate ERM, tech law, and data science, Winners is uniquely positioned to assist. Led by a founder with a background in preventive law, our team, including lawyers and ISO Lead Auditors, helps companies build from the ground up. We ensure your shareholder return policy not only complies with the Company Act and Corporate Governance Evaluation requirements but also aligns with the ISO 37000 framework. This approach fosters sustainable value and protects long-term shareholder interests by preventing profit erosion from inadequate risk management.