This Article intends to explore the extent to which independent directors constrain tunneling by controlling shareholders in Taiwan. Taiwan serves as an appropriate jurisdiction for research since the private benefits agency problem is prevalent among Taiwanese public companies. A further twist in Taiwan?s case is that independent directors were newly introduced to Taiwan?s corporate boards, which follow dual-board system where the traditional monitoring function is served by statutory supervisors, instead of board committees, which adds to the complexity in analyzing the effectiveness of independent directors in constraining tunneling activities. Part II reviews relevant literature and lays the foundation for this paper. Part III details the methodology of this research study, mainly in-depth interviews. Part IV reviews the current state of corporate governance in Taiwan. Part V reports empirically the function of independent directors and their oversight of RPTs among sample Taiwanese public companies. Part VI analyzes the institutional constraints of independent directors in overseeing controlling shareholders and reviews the effect of legal transplantation. Finally, this paper concludes with a summary of findings in Part VII
