The purpose of incorporation is to pursue maximum profits for employees and shareholders alike, yet sometimes a company's managers might harm the interests of company creditors and small shareholders to benefit themselves. Recently, a large number of domestic companies have engaged in fraud, insider trading, short buying and selling, cross ownership, and back door listing to the harm of investor interests, raising doubts over the effectiveness of our present laws and regulations on monitoring the obligations of company directors, supervisors and managers. This thesis focuses on the establishment of an effectual mechanism for corporate governance. The financial holding company is used as a sample subject for a more in-depth discussion. The following issues are studied: (1) the establishment of a supervisory system for financial holding companies in Taiwan; (2) international corporate governance concerning the responsibilities of a company's director; (3) the qualifications for appointment as a company's director, supervisor or manager, and the prohibition on such persons in holding additional titles of similar nature; and (4) ways of strengthening restrictions on the discretionary powers of directors and supervisors.