Taiwanese Companies Should Take Shareholder Reporting More Seriously

Robin: ‘May and June are shareholder-meeting season. Taiwanese companies generally do not take the writing of their operating reports—the equivalent of shareholder letters overseas—seriously enough. Yet leaders of great companies abroad place considerable value on this annual opportunity to report directly to shareholders in writing. Taiwan still has a long way to go in improving corporate governance. Let us start by taking shareholder reporting more seriously.’ --- The best shareholder letters treat readers as business partners in the company, helping them understand the particular company and its business in depth. Their authors share their views on core business questions: accounting, economics, and management—the core of a business-school curriculum—as well as specific challenges facing the company, competitive strategy and innovation, employee morale, executive succession, and much else. Excellent shareholder letters are usually rigorous, sincere, candid, consistent, and focused. They explain the company’s current condition and circumstances, whether good, bad, or very bad, sharing an honest analysis rather than trying to conceal or evade problems. They emphasize long-term thinking and describe a long-term vision for the business. This means examining current problems and difficulties over a longer time horizon and in terms of longer-term returns.