Corporate Governance

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Board Regulations

Responsibility of the Board of Directors

The Company's Board of Directors faithfully conducts its corporate affairs and performs the duty of care of a decent manager and exercises its powers with a high degree of self-discipline and prudence by guiding the Company's strategy, supervising the management, and being responsible to the Company and shareholders. The various operations and arrangement of its Corporate Governance System shall ensure that the Board of Directors exercises its functions and powers in accordance with laws and regulations, bylaws of the Company's Articles of Incorporation, or resolutions of the shareholders' meeting.

Board Performance Evaluation

The Company has formulated the “Board Performance Evaluation Rule”, which was resolved by BOD in accordance with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies in 2016. Since 2016, every year the Board members and the divisions in charge of organizing meetings conducted a self-evaluation of the Board’s performance in five areas, namely, involvement in the Company’s operations, improvement in the Board’s decision-making, the Board’s structure and organization, the selection and further training of the Board members as well as internal control, a total of 44 evaluation indicators. The Company's " Board Performance Evaluation Rules " has been amended by the Board meeting in 2018 that the Company's board performance evaluation shall be conducted by an external independent professional institution or a panel of external experts and scholars at least once every three years.

The Company shall conduct a Self-Evaluation of the Performance of the Functional Committees including the Audit Committee and Remuneration Committee and Sustainability Committee established in 2020. From 2016 to 2023, the performance of the Board was evaluated as “Excellent” every year (Equivalent to a self-assessment score of 90 or above), which indicates the improvement in the Board’s effectiveness. The results of the 2022 annual assessment were reported by the Remuneration Committee on February 17, 2023 and the Board of Directors on March 8, 2023. In addition, the 2023 annual assessment results are expected to be reported to the Remuneration Committee and the Board of Directors in the first quarter of 2024.

The Company conducted two external evaluations of board meetings in 2023 and 2020, appointing EY Transaction Advisory Services Inc. for both assessments. The external evaluation institution or panel of external experts and scholars shall be professional, independent and have no business associated with the Company. They have expertise in sustainable development, risk management and corporate governance-related fields. The external evaluation method included reviewing relevant information of the Board of Directors and Functional Committees, communicating, filling in questionnaires, interviewing and identifying issues. Review contents included board structure and processes, board composition, legal entity and group structure, roles and responsibilities, behavior and culture, director training and development, oversight of control functions, and oversight of reporting disclosure and performance.

EY Transaction Advisory Services Inc. submitted the evaluation report to the Company for board operation recommendation in January 2024. The evaluation results and recommendations will be reported to the Remuneration Committee meeting in the first quarter of 2024 and after the Board meeting. When nominating Directors and remuneration paid to Directors, the Company shall refer to the evaluation results of the performance of individual Directors. 

The report of 2023 External Performance stated that the Company's board evaluation level in three main areas, “Structure”, “People”, and “Process and Information” revealed in a comprehensive manner with respectively “Advanced”, "Advanced” and "Benchmark”.

With four main recommendations, the Company will take action to improve within an appropriate timeframe as follows.

  1. Ensure that the proportion of Independent Directors is more than one-third of the Board of Directors and consider replacing an Independent Director who has served for more than three terms.
  2. Establish a Board of Directors talent pool to enhance director diversity. 
  3. Reduce the number of directors with familial relationships. 
  4. Address critical concerns raised by external stakeholders.

The Company implemented the following projects in response to the above recommendations. For example, it carefully reviewed the members and structure of new directors to enhance diversity and comply with regulations for independent directors during the 2024 re-election period. Additionally, the Company planned to enhance the reporting of vital issues raised by external stakeholders.


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