Audrey Tang: I read about yesterday’s conference on Benefit Corporation legislation.

William H. Clark Jr: Good.

Audrey Tang: That did generate some press. We’ll be on the record, and I’ll send you a transcript to edit for 10 days, and you can take out any part of it.

William H. Clark Jr: I assume I can edit freely.

Audrey Tang: That’s right, edit freely, like completely freely.

William H. Clark Jr: Completely rewrite history. It sounds like we’re in communist Russia or something.

Audrey Tang: That’s exactly right, but you can’t touch my part. It has to still make sense somehow. [laughs]

William H. Clark Jr: I probably should not edit your part.

William H. Clark Jr: Never mind, we’re good.

Audrey Tang: [laughs] How’s going for you?

Ray Chen: I think we have a good gathering from all over the world. [laughs] It happened that we have a Italian lawyer here, and he study benefit corporation law.

Audrey Tang: That’s great.

Ray Chen: He has been based in Milan and Taipei, so he can share his experience...

Audrey Tang: That’s awesome.

Ray Chen: Now we have both European and US experience to share, so we got more knowledgeable. [laughs]

Audrey Tang: That’s awesome. There was two versions of benefit corporation law here...

William H. Clark Jr: Yes.

Audrey Tang: ...domestically, around different sort of responsibilities, accountability criteria, and things like that. There was some internal debate that actually surfaced. I think Chu Ping raised some differences between the two versions. I was very curious how’s your take on all this.

William H. Clark Jr: We do not yet know how the differences between the two versions are going to be resolved, do we?

Ray Chen: The New Power Party’s version, I think they require...Professor Fang will come. He can explain that part. Basically, I think it’s a misunderstanding. New Power Party means they want if people didn’t get the benefit report disclosed, then there will be some...

Audrey Tang: Penalties?

Ray Chen: ...penalties, or something like that. Ping thought that the government will check the inside content to see whether it’s followed the rule or not. Ping is against that part. I think it’s a misunderstanding because later we explained, "Hey, New Power Party means they want people to disclose it, not have to have a government to check the content."

Audrey Tang: Even if it’s 10 blank A4 pages, that’s going to be OK for government? Because we’re not going to look into content...

Ray Chen: Basically, government should not look into it.

Audrey Tang: If it’s 10 pages of comic sans, drawings or whatever...

Ray Chen: That is problem, right?

Audrey Tang: [laughs] That’s the problem of that company?

William H. Clark Jr: If it’s entirely blank pages, that probably doesn’t work. It needs to be...

Audrey Tang: It need to have a lorem ipsum.

William H. Clark Jr: Right, like cartoons.

Audrey Tang: Cartoons would work.

William H. Clark Jr: Cartoons might work. You can actually do a report in cartoon fashion and say some substantive things.

Ray Chen: Yes.

Audrey Tang: For the record, I’m totally for cartoons.

Ray Chen: I think it’s a good discussion.

William H. Clark Jr: It was a very good discussion. I don’t have a good feeling for how the politics is going to work out. That’s the real question. Of course, we are very interested in seeing it move along fairly quickly.

Audrey Tang: Of course.

William H. Clark Jr: We’ve got some real sense of urgency. We think that it would be good for Taiwan if Taiwan can be the first Pacific Rim country to do this, too.

Audrey Tang: Is it possible at all to implement this at a regulation level, before it gets to the Parliament?

William H. Clark Jr: I do not know enough about Taiwanese law.

Audrey Tang: It is continental law system, same as Germany.

William H. Clark Jr: A year ago, Ecuador proposed to do that. Ecuador actually wrote regulations that would be adopted by the superintendent of corporations in Ecuador. The lawyers that looked at it in Ecuador that we were working with said that they thought that that would be enforceable and would be an option.

William H. Clark Jr: They actually proposed regulations. They formally published regulations in Ecuador, and then the government changed. Now they’ve introduced legislation, so they’re not going to do regulations. If you could do regulation right away...

Audrey Tang: With 60 days of discussion, of course, but yeah.

William H. Clark Jr: Then the only question would be would it be recognized as enforceable and be something that would be binding that the companies could rely on if they used it?

Audrey Tang: That’s right. A few differences: Regulation cannot introduce, in a continental law system, new penalties that is not mandated by the law.

Audrey Tang: On the other hand, we did put in quite a few provisions in the Company Act for the disclosure of the company’s incorporation documents, like the charter, as well as the right of minority shareholders to propose things that are for the public benefit if that is somehow recognized by the company in the first place.

Audrey Tang: It all hinges on the disclosure of the intent. If we do publish a regulation that says, "Oh, by the way, if an organization’s charter include a specific reference to a kind of templated language, then it is subject to this, this, this effects," I think that would be enforceable.

William H. Clark Jr: That’s a very interesting idea. No one’s raised that issue in Taiwan before this morning. I think it would be preferable if we could get the legislation done.

Audrey Tang: Of course.

William H. Clark Jr: If we can’t, that’s an interesting alternative. Make a note. [laughs]

Ray Chen: Sure.

William H. Clark Jr: We should at least talk to Professor Fang.

Audrey Tang: Another possibility is the local policy level. Each city, each municipality can also make regulations or policies by its own. Of course, the drawback is that it may be fragmented, like every major city will introduce a different...

William H. Clark Jr: Slightly different.

Audrey Tang: ...benefit corporation structure for the registered organizations.

William H. Clark Jr: I think it would be preferable, if we went this way, to try to do it at the national level. When you set up a corporation in Taiwan, do you do that through the central government? Do you file your papers...?

Audrey Tang: No, you file it through the local government.

William H. Clark Jr: Oh, OK.

Audrey Tang: You need to have a register address, like a physical address, in a municipality, city or county. The city or municipality government takes the application.

William H. Clark Jr: They actually file the documents?

Audrey Tang: Of course, the central registration database is in the Ministry of Economic Affairs. This actually is somewhat complicated now because you can also start a company online. When you file it online, then it’s actually directly to the MoEA, so it’s like...

William H. Clark Jr: It’s already centralized?

Audrey Tang: It’s different tracks, but the same database.

William H. Clark Jr: If a member of the public wants to get a copy of the documents for a corporation, they go to the Central Ministry or do they go to...

Audrey Tang: Depending on whether they’re a stakeholder. If they’re a stakeholder, they can legally go to either the MoEA or the local office and ask for a copy. If they’re not a stakeholder, they actually depend on the owner using a digital certificate to upload those documents to the MoEA website.

William H. Clark Jr: The public does not have access to all of the records of a corporation...

Audrey Tang: That’s right.

William H. Clark Jr: ...without consent? That’s interesting. That’s different than the United States.

Audrey Tang: I understand that. By law, the company is required to publish quite a few things online, but the articles of incorporation is not part of it; that’s opt-in.

Audrey Tang: However, anyone can get a physical copy of that from the Ministry of Economic Affairs.

William H. Clark Jr: It’s interesting. Every country has their own system. [laughs]

Audrey Tang: That’s right.

William H. Clark Jr: I’m learning more and more about the...

Ray Chen: We have a central database, right?

Audrey Tang: We have a central database.

Ray Chen: We can check the company name.

William H. Clark Jr: You can do that in the central database, but you cannot get the copy of the document.

Audrey Tang: The founding documents is not available online by default.

William H. Clark Jr: Right.

Ray Chen: No?

Audrey Tang: No, it’s by voluntary disclosure.

William H. Clark Jr: I’m intrigued by the notion of regulations. We should investigate that.

Audrey Tang: Yeah.

William H. Clark Jr: Who would write those regulations? The ministry?

Audrey Tang: The Ministry of Economic Affairs, certainly.

William H. Clark Jr: They’re busy at the moment writing a report to Congress already on this.

Audrey Tang: That’s right, exactly. I’m kind of in charge of overseeing that effort.

Ray Chen: Kind of?

William H. Clark Jr: You are?

Audrey Tang: Yeah, I am.

William H. Clark Jr: Apologies.

Audrey Tang: Of course, the Minister of Economic Affairs have to stamp that, but I’m in close collaboration with the staff, the three people who was there at the dinner yesterday, [laughs] trying to make it happen.

Ray Chen: Oh, yeah. You have dinner last night.

Audrey Tang: That’s right.

William H. Clark Jr: You could actually write the regulations.

Audrey Tang: Regulation is within our purview, but legislation needs the MPs.

William H. Clark Jr: We definitely have to talk to Richard about this.

Ray Chen: [laughs] He will come.

Audrey Tang: The legislation is entirely in the Parliament. Even if we present a draft bill, it will most likely get scheduled for the next year. It can’t be fast-tracked through the legislation this year.

Ray Chen: How it will be called, 條例 or what’s the...?

Audrey Tang: As long as it’s enforceable, there’s no difference really. As we see recently, our draft bill for marriage equality to the legislation was a separate act because the referendum says that it cannot change the existing civil code.

Audrey Tang: We sent a new act for marriage equality that basically says, for a marriage relationship between same-sex individuals, see civil code, see civil code, see civil code for the rights and obligations. That’s the "Enforcement Act of Judicial Yuan Interpretation No. 748", nicknamed the hyperlink act...

William H. Clark Jr: We’re going digital right, so that’s your...

Audrey Tang: Exactly.

William H. Clark Jr: You’re at the center of everything digital.

Audrey Tang: It’s a technicality. Outside of the Company Act, we can still basically write anything that we would have written in the Company Act. It makes no difference. That’s, I think, what Dr. Chen Mei-ling point out yesterday.

William H. Clark Jr: We could always do regulation, and then...

Audrey Tang: Upgrade it?

William H. Clark Jr: ...it could be replaced by legislation at some point.

Ray Chen: Is it lasting? If the authority changed, that kind of government...

Audrey Tang: Regulation.

Ray Chen: ...regulation can be...

Audrey Tang: The same goes for laws. The real point is whether the public service is on our side. If the public service, in general, is on our side, then regulations tends to be very stable. Minister-level people can’t really change a regulation at will if the public service say, "Oh, our operation depends on it."

William H. Clark Jr: In the United States, what we would do is, if we replaced the regulation with legislation, we would grandfather companies that used the regulations. We would say that everyone that...

Audrey Tang: That registered.

William H. Clark Jr: ...acted under the regulation is now deemed to be under the legislation.

Audrey Tang: Exactly.

William H. Clark Jr: It carries over seamlessly.

Audrey Tang: Exactly. It’s very tactical, but I think at least that proposal would generate some momentum within this year. Everybody knows very few brand-new legislation is going to pass this year. It will have to re-propose again the next year, because it’s a different set of MPs.

William H. Clark Jr: You have an election?

Audrey Tang: January, so a different set of MPs will...

William H. Clark Jr: Will come in.

Audrey Tang: ...will come in on January.

William H. Clark Jr: Very interesting.

Ray Chen: Regulation can follow the principles...

William H. Clark Jr: The regulation can basically, I think, be exactly what’s been proposed in the legislation.

Audrey Tang: Exactly the same thing. You just can’t introduce new...

William H. Clark Jr: New penalties.

Audrey Tang: ...new penalties.

William H. Clark Jr: That’s OK.

Ray Chen: [laughs] Interesting.

William H. Clark Jr: This is excellent. Thank you!

Audrey Tang: Glad to be of some help.

William H. Clark Jr: We appreciate your service.

Audrey Tang: [laughs] That’s exactly right. That’s why I’m a public servant, right? [laughs]

Ray Chen: Audrey, you think this is the right way to go, right?

Audrey Tang: What I mean is that if, across parties, there’s some consensus about the key legislative parts, then, of course, legislation is preferable. At the moment, from the discussion yesterday, at least what I heard of it, there’s still party politics going on.

William H. Clark Jr: Yes, that’s right.

Audrey Tang: In that political circumstance, the administration will be reluctant to choose among parties.

Audrey Tang: Usually, what we do is that we run a consultative process like we did with the vTaiwan project. We show with hard numbers that, according to a rolling survey, 100 percent of people agree that if you call yourself a benefit corporation or a social entrepreneur under the Company Act structure, you should voluntarily disclose your founding documents.

Audrey Tang: 100 percent of people agree, so we say, "There is rough consensus on many things, but this is a consensus, period," so we introduced that in the Company Act draft bill. The administration basically plays it safe by only proposing in the draft bill what we already know...

Audrey Tang: ...that there will be cross-partisan support.

Richard Fang: Hi.

Audrey Tang: Hi Professor Fang!

William H. Clark Jr: We have this tremendous new idea.

Audrey Tang: Mm-hmm.

William H. Clark Jr: The minister has come up with it, though. We’re going to shift gears. You’re going to take a completely different approach.

Audrey Tang: We’re just brainstorming here.

William H. Clark Jr: Help me understand the politics briefly. My understanding is that there are three parties, essentially.

Audrey Tang: With their own versions.

William H. Clark Jr: There’s two parties clearly with their own versions, but the majority party does not have legislation that’s been introduced.

Audrey Tang: There is a version, but it’s an act that pertains to the social enterprises in general, without saying anything about the structure. It may be a co-op, it may be a company, or a charity. What it looks at is an earned income percentage.

Audrey Tang: If you fit the threshold of allocating the revenues and resources to a certain percentage, then you’re eligible to ecosystem-supporting benefits from the government.

Audrey Tang: It doesn’t have to be a company. It could be a co-op, a charity, or whatever. It’s called the Social Enterprise Development Act, proposed by MP Karen Yu.

William H. Clark Jr: The majority party does not have benefit corporation legislation, but the two other parties...

Audrey Tang: They’re totally compatible though.

William H. Clark Jr: I understand. What I’m trying to understand is, if we were to go the new way of regulations where those would presumably come from the majority party and would actually...

Audrey Tang: We’re a system where the administration is a separate power. The premier appoints us, the ministers. The president appoints the premier, and the president is directly elected. It is not a parliamentary system. The career public service must remain neutral when it comes to party politics, as required by law.

William H. Clark Jr: If we were to do the regulations, then it would not be as if now the third party that has not yet introduced benefit corporations would be introducing it? It would be the administration?

Audrey Tang: It would be the administration.

William H. Clark Jr: What we’re talking about is the possibility of moving fairly quickly to adopt regulations and get them in place this year, still with the goal of having legislation, eventually, which would replace and bring in...

Audrey Tang: Like the hyperlink act.

William H. Clark Jr: I was telling people that the same approach was initially started in Ecuador. They actually drafted regulations, but then the politics in Ecuador changed, and so they’ve now switched over to legislation and abandoned the regulations. Certainly, it would be something that would work...

Richard Fang: Yeah.

William H. Clark Jr: ...that we could do very quickly and get Taiwan into the community right away.

Richard Fang: I think they’re compatible, the regulation, and we also can have the legislation at the same time. It’s compatible, totally.

Audrey Tang: It’s totally compatible.

Richard Fang: I think it’s good to see the move-on.

Ray Chen: ...we cannot stay here. [laughs]

Audrey Tang: We can also say that the regulation is subject to a review. Usually, we can say 試行要點, a experimental regulation that says, "A year or two years after the introduction of this regulation, we’re going to do a review to see whether it needs changing or it needs upgrading to a legislation." That itself can be written into the regulation.

William H. Clark Jr: What do you think?

Richard Fang: I think that...

William H. Clark Jr: We surprised you, right?

Richard Fang: Yes.

William H. Clark Jr: It’s not what I was expecting.

Audrey Tang: I guess you expected this to be a courtesy visit? [laughs]

William H. Clark Jr: I like it. I think it’s a...

Richard Fang: I think it’s very good. Sometimes, people just afraid the change. If they can see what actually in practice, they will feel comfortable. I think it will be better for everyone to trust the system.

Audrey Tang: That’s right. It gives everyone a firsthand experience.

Ray Chen: It’s good transition, too.

Audrey Tang: That’s right.

Ray Chen: It’s like to transform to another stage.

William H. Clark Jr: We’re agreed that you’re going to work with the minister, and very quickly...

Audrey Tang: Hi.

Ray Chen: Happy?

Richard Fang: I think it’s good. I think that as long as we can give this kind of company a legal status, even by the regulation, I think it works well, too. It also needs the three basic elements...

William H. Clark Jr: The basic characteristics would still be the same.

Audrey Tang: The only difference is that we cannot introduce new penalties, but that’s it.

William H. Clark Jr: That’s all right, too. We can leave those to be reported on after a year of experience.

Audrey Tang: That’s right.

Richard Fang: I totally support.

Audrey Tang: Awesome. Thank you. [laughs]

Ray Chen: Dinner last night was very productive.

Audrey Tang: Exactly.

Ray Chen: Who is in charge of this? [laughs]

Audrey Tang: I had a dinner last night with Betty and also with Betty’s new boss, the new head of the MSME agency of the Ministry of Economic Affairs. The new agency leader is very important because the MoEA SMEA itself is undergoing a change.

Audrey Tang: I think next year or so, they will change to be the "SME and Startup" agency. Policies concerning newly founded companies...

William H. Clark Jr: Will be through that?

Audrey Tang: ...will be through the agency. The registration is handled by the commerce agency, and the MSME agency basically is just in charge of cultivating and incubating work. The word start-up is diffused in various different ministries.

Audrey Tang: Once there’s a organizational change, it will be consolidated into the new SME&S agency. Anything that pertains to starting a new company will move to this agency, which is why they’re now in charge of drafting a response to the legislation for the Benefit Corporation and Social Enterprise acts.

Audrey Tang: I was talking with the new agency leader about the conference that you held. It’s very good momentum. It gives us something to talk about. [laughs]

William H. Clark Jr: It’s great.

Ray Chen: Yeah.

William H. Clark Jr: It’s perfect. All right?

Richard Fang: Yes.

William H. Clark Jr: Good?

Richard Fang: I’m happy. [laughs]

Ray Chen: We can celebrate next year.

William H. Clark Jr: We’ll get it done this year.

Richard Fang: Yes.

William H. Clark Jr: June?

Audrey Tang: Sure.

William H. Clark Jr: We have to beat Jason because Jason still thinks we can do June with legislation. We’ll have to do it before Jason.

Ray Chen: [laughs]

Audrey Tang: Karen and Jason are both very helpful in communicating the ideas of social innovation to the wider community.

William H. Clark Jr: Good. I think we’re done.

Audrey Tang: Awesome.

William H. Clark Jr: Let’s adjourn with good progress.

Audrey Tang: Let’s get moving. [laughs]

William H. Clark Jr: Thank you so much.

Audrey Tang: Thank you.

Richard Fang: What’s the information about the numbers of the benefits corporation in the united states? Benefit corporation increase, right?

William H. Clark Jr: Yes, it’s almost 10,000 at this point in the United...

Richard Fang: Last year, it was just over 6,000.

Audrey Tang: Do you see a lot of other laws citing benefit corporation as a requirement, like referencing?

William H. Clark Jr: The short answer is no.

Audrey Tang: It kind of stand of its own?

William H. Clark Jr: It stands on its own. We have not promoted any kind of tax relief. There are proposals to require that, for certain programs, the parties that are bidding on the program be benefit corporations. We’ve not put any effort into that.

Audrey Tang: It’s certainly not at a legislation level?

William H. Clark Jr: Nowhere in legislation.

Audrey Tang: That’s great because the other difference, in addition to penalty, is that law do not usually cite a specific regulation. If it stand on its own, then there’s no difference between a law or regulation anyway.

William H. Clark Jr: Good. That will not be a problem, at least in the United States’ experience.

Audrey Tang: That’s awesome. Yay.

William H. Clark Jr: Right?

Richard Fang: Yes.

William H. Clark Jr: I keep looking at you because you need to get to work.

Richard Fang: I am always working.

William H. Clark Jr: You need to call the minister this afternoon and say, "Here’s my draft."

Audrey Tang: We kind of did that, actually. [laughs]

Richard Fang: ...so many versions already. [laughs]

William H. Clark Jr: The draft is finished? That’s great.

Audrey Tang: That’s exactly right.

William H. Clark Jr: Let’s publish the regulation.

Audrey Tang: A regulation needs, of course, 60 days of public debate. If we say it’s provisional or if it’s a pilot, then I think there will be less contention. It will not be seen as taking things away from the future MPs.

William H. Clark Jr: No, because they could still sponsor the legislation, take credit for...

Audrey Tang: Exactly.

William H. Clark Jr: Let’s adjourn before we change our minds.

Ray Chen: Maybe we can have a global benefit corporation legislators and government meeting in Taipei.

William H. Clark Jr: Yes, absolutely.

Audrey Tang: Of course.

Ray Chen: Invite all the congressman, the legislators, to come here, or not.

Audrey Tang: Right.

Ray Chen: Thank you.

William H. Clark Jr: Thank you so much. This is great.