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Board Regulations

Responsibility of 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 be conducted 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 2022, 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 2021 annual assessment have been reported by the Remuneration Committee on February 18, 2022 and the Board of Directors on March 8, 2022. In addition, the 2022 annual assessment results are expected to be reported to the Remuneration Committee and the Board of Directors in the first quarter of 2023.

The Company has appointed EY Transaction Advisory Services Inc. in 2020 to conduct an external evaluation. The team members include Wenfang Fu, Yuzhe Zeng, Xuhong Gao and Guosen Hong. 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 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 as board operation recommendation in January 2021. The evaluation results and recommendations will be reported to the Remuneration Committee meeting and the Board meeting on March 24, 2021. When nominating Directors and remuneration paid to Directors, the Company shall refer the evaluation results of the performance of individual Directors. The Company planned to implement the external evaluation project again in 2023.

The report of 2020 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 “Benchmark”, "Advanced” and "Benchmark”.

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

  1. Set up functional committees other than statutorily required committees for instance nomination committees and risk management committees.
  2. Strengthen the diversity of directors.
  3. Enhance director attendance in person rates at Board meetings.
  4. Invite the directors of not company's employee to operation meeting for instance annual operating budget meeting and R&D project meeting.

The Company implemented following projects in response to the above recommendations, for example establishing the Sustainability Committee on Nov 12, 2020, strengthening board structure, assessing necessity of risk management committees and nomination committees, and carefully reviewing the nominated candidates to strengthen Directors’ diversity during the re-election period. The Company also planned to encourage the non executive Directors to participate in operational meetings and to invite all Directors to attend Board meetings in person.


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