Operations
| ITEM | IMPLEMENTATION STATUS | DIFFERENCE FROM CORPORATE GOVERNANCE PRACTICE PRINCIPLES FOR TWSE/GTSM-LISTED COMPANIES AND REASONS | |||||||
| YES | NO | DESCRIPTION | |||||||
| Does the Company set and disclose corporate governance code of practice according to corporate governance practice principles for TWSE/GTSM-Listed companies? | v |
The Company has set a corporate governance code of practice, for the protection of shareholders’ rights, to strengthen the functions of the BOD, respect the interests of stakeholders, enhance the transparency of information and relevant rules. Detailed information can be found on the Company’s website. |
No difference | ||||||
| Equity structure and shareholder rights. | |||||||||
| Has the Company set internal operating procedures to deal with shareholder proposals, doubts, disputes and litigation matters, and does it implement these in accordance with its procedures? | v | The Investor Relations Department is dedicated to processing shareholder proposals or disputes. | No difference | ||||||
| Does the Company have a list of those who ultimately control the major shareholders of the Company? | v | The Company keeps track of of the shareholding status of directors, managers, and major shareholders holding more than 10%, and provides disclosure according to law. | |||||||
| How does the Company establish its risk management mechanism and firewalls involving related enterprises? | v | The Company has established appropriate internal risk control mechanisms and firewalls, pursuant to the rules for specific companies or groups related business operations and financial transactions, supervision measures for subsidiaries, procedures for endorsement and guarantee, operational procedures for lending funds to others and procedures for asset acquisition & disposal. Business relations between affiliated enterprises have been evaluated by an independent third party to prevent violations of unlawful transactions. | |||||||
| Has the Company set internal standards to prohibit the use of undisclosed insider information to trade securities on the market? | v | The Company has set operating procedures and critical control points to prevent insider trading, Company insiders are prohibited from using undisclosed information to buy and sell securities on the market. | |||||||
| Organization and responsibilities of the Board of Directors | |||||||||
| Has the Company established a diversification policy or specific goal for the composition of its Board of Directors and has it been implemented accordingly? | v |
The Company has set “Corporate Governance Practical Principles” to ensure boards’ diversity. The company’s BOD (including independent directors) has adopted a nomination system. The members of the BOD are diversified and possess manufacturing, brand channel, technological research and financial investment backgrounds for the implementation of Board diversity and create a healthy board structure. Concurrently an employee of the Company accounts for 25% and 62.5% of directors and independent directors respectively., 1 directors are aged between 51-60 and 6 between 61-70 years of age and 1 between 71-80 years of age. The Company places great importance on the gender diversity of the Board, currently of 8 directors, there is 2 female director achieving 25% female representation on the board. |
No difference | ||||||
| Has the Company establish other functional committees besides the Compensation Committee and Audit Committee? | v | The Company set up 3 independent directors and a Compensation Committee, has also set up the FGSC Committee, Energy-saving Technology Development Committee, Employee Benefits Committee and Employee Retirement Reserves Oversight Committee; Nomination Committee on March 16 2022; other functional committees will be set up depending on future needs. | |||||||
| Has the Company set performance assessment rules and methods for the BOD and does it perform this evaluation every year? | v |
Since November 12, 2020, the Company’s Procedures includes “Director and Committee evaluation method”. Evaluations are conducted early, and at least once every three years by an external professional independent organization or an external scholar/expert. The evaluation also specifies aspects of evaluation for each functional committee. The company’s internal performance evaluation for the board of directors in the most recent year is carried out by the directors, using internal questionnaires.
The results of the performance evaluation of the board of directors were sent to the board of directors and functional committees on March 30, 2021 and were used as a reference for the remuneration of individual directors and nominations for re-election. The results of the 2021 performance evaluation are as follows:
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| Does regularly evaluate the independence of the CPA? | v | The Company regularly assesses the performance and independence of the CPA through the BOD. The recommended CPA is required to provide CVs and declarations (not in violation of Ethical Standards Publication No. 10) for the BOD to discuss the appointment and independence of the CPAs. The company’s board of directors reviewed and approved on March 16, 2022: All certified public accountants meet the company’s independence assessment standards (direct or indirect financial interest with clients, excessive reliance on the source of remuneration from a single client by the firm, significant and close business relationship, etc.). | |||||||
| Does the Company appoint competent and appropriate corporate governance personnel and corporate governance officer to be in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by directors, assisting directors’ compliance of law, handling matters related to board meetings and shareholders’ meetings according to law, and recording minutes of board meetings and shareholders’ meetings)? | v |
In aims to implement corporate governance, assist directors, and protect investor rights; the Company has passed a resolution on 2019/05/14 board meeting and has appointed competent and appropriate corporate governance personnel. The Company has established full-time financial officer, Huang, De-cai as responsible for corporate governance related matters. Huang has accumulated over twenty years of financial manager expertise and experience.
Primary responsibilities include the following:
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No difference | ||||||
| Does the Company establish communication channels and dedicate section for stakeholder on its website to respond to important issues of corporate social responsibility concerns? | v | The Company has set “Stakeholder Zone” and have the contact information for spokesperson and any related contact window to on its website to respond to major concerns regarding corporate social responsibilities from stakeholders. Please refer to CSR Annual Report. “The communication and Responsibility of stakeholder” Chapter. | No difference | ||||||
| Has the company appointed a professional stock affairs agency for shareholders affairs? | v | The Company authorized “Grand Fortune Securities Co., Ltd.” as stock service agency to handle shareholder transactions. | No difference | ||||||
| Disclosure of information | |||||||||
| Does the Company set up website to disclose financial operations and corporate governance information? | v | The Company has placed financial and corporate governance information of each year on its website. | No difference | ||||||
| Has the Company adopted other measures (such as English website, a designated person responsible for the collection and disclosure of information, implementation of the spokesman system, the legal entities announcements uploaded to website, etc.) to disclose information? | v | The Company has an English website and a spokesperson, investor relations department and shareholder services department to disclose relevant information. The Company issued global depository receipts (GDR) in London, and discloses company information on its website according to the provisions of the relevant rules of the London Stock Exchange. | No difference | ||||||
| Does the Company announce and report the annual financial statements within two months after the end of the fiscal year, and announce and report the first, second, and third quarter financial statements as well as the operating status of each month before the prescribed deadline? | v | The Company’s annual financial report and the first, second, and third quarter financial reports were announced and submitted within the time limit specified by the law. In addition, since June 2019, the Company’s revenue information has been disclosed in advance on the 5th of the following month. However, the annual financial report has not been announced and filed within two months after the end of the fiscal year. | No difference | ||||||
| Does the Company have other important information for better understanding the Company’s corporate governance system (including but not limited to interests and rights of employees, care for employees, relation with investors, relation with suppliers, relation with interested parties, continuing education of directors and supervisors, execution of risk management policies and risk measuring standards, execution of customer policies, liability insurance for the Company’s directors and supervisors)? | v | Interests and rights of employees: The Company has always treated employees in good faith to ensure their legal interests and rights in accordance with the Labor Standards Act. Care for employees: by adopting a welfare system and good education and training, a relationship of mutual trust has been established with employees. Such as: employee benefits and community cultural and recreational activities and entertainment, health clinic grants and medical advice, the Company also provides staff quarters, rented accommodations for staff, accommodation care, parking lots, etc. Investor Relations: The Investor Relations Department was set up to specifically deal with shareholder proposals. Supplier Relationship: good relations with suppliers are maintained at all times. Relations with stakeholders: stakeholders shall communicate with the Company and put forward proposals to protect their due legal rights and interests. Continuing education of directors and supervisors: The Company’s directors are qualified with industrial professional knowledge and practice experience in operation management. Please refer to the following table for more information on continuing education (please refer to the table below for specific case studies). Execution of risk management policy and risk measuring standards: various internal regulations are established legally for various risk management and evaluation. Execution of customer policies: stable and good relations with customers are maintained with the view of creating profits. Liability insurance for the Company’s directors: liability insurance has been covered for directors. | No difference | ||||||
| Please specify the measures adopted by the Company to improve the items listed in the corporate governance review result from Taiwan Stock Exchange's Corporate Governance Center and the improvement plans for items yet to be improved. | |||||||||
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Continuing education of Directors
| TITLE | NAME | DATE | ORGANIZER | COURSE | HOURS |
| Chairman | Liu, Young-Way | 2020/12/23 | Securities and Futures Institute | Conglomerate tax management trends in the post-epidemic era | 3 |
| 2020/12/24 | Securities and Futures Institute | The principle and application of blockchain | 3 | ||
| Corporate Director representative | Christina Y. Liu | 2021/11/3 | Greater China Financial and Economic Development Association | Building Corporate Resilience Through Digital Transformation | 3 |
| 2021/12/20 | Greater China Financial and Economic Development Association | Corporate Reputation and Governance, from a Big Data Perspective | 3 | ||
| 2022/11/10 | Greater China Financial and Economic Development Association | An In-depth Look at the Global Tax Reform (BEPS 2.0) | 3 | ||
| 2022/11/14 | Greater China Financial and Economic Development Association | The Illegality and Case Analysis of Insider Trading | 3 | ||
| Corporate Director representative | Wang, Charng-yang | 2022/9/8 | Accounting Research and Development Foundation | The Latest Corporate Governance Policies and Corporate Governance Evaluation Practices | 3 |
| 2022/9/30 | Accounting Research and Development Foundation | Concept Lecture：ISSB S1 General Requirements for Disclosure of Sustainability-related Financial Informatio | 3 | ||
| 2022/10/13 | Greater China Financial and Economic Development Association | The New Equation for Digital Transformation | 3 | ||
| 2022/10/17 | Greater China Financial and Economic Development Association | Financial Statements and the Value of ESG Strategic Investing | 3 | ||
| Independent Director | James Wang | 2020/03/26 | Independent Director Association Taiwan (TIDA) | The latest domestic and international economic trends, risk assessment and response methods | 3 |
| 2020/05/28 | Independent Director Association Taiwan (TIDA) | Shareholder activism and M&A strategies | 3 | ||
| 2020/06/18 | Independent Director Association Taiwan (TIDA) | Corporate crisis management strategies and countermeasures | 3 | ||
| 2021/8/27 | Taiwan Corporate Governance Association | Discussion on the Use of Remuneration Strategies and Tools for Corporate Employees | 3 | ||
| 2021/8/27 | Taiwan Corporate Governance Association | The Recent Development and Response Strategy of Cross-strait Anti-tax Avoidance | 3 | ||
| 2022/8/24 | Taiwan Corporate Governance Association | Analysis of laws and regulations on cross-strait investment, joint ventures and mergers and acquisitions | 3 | ||
| 2022/8/24 | Taiwan Corporate Governance Association | Strategic Thinking on Corporate Restructuring of Group Enterprises (Including Mainland IPOs) | 3 | ||
| Independent Director | Kuo, Tei-Wei | 2020/12/29 | Taiwan Investor Relations Institute | Proxy fight disputes - corporate governance and independent directors' responsibilities and powers | 3 |
| 2020/12/30 | Taiwan Investor Relations Institute | Strategies for Enterprise Operation and News Crisis Management | 3 | ||
| 2021/12/2 | Greater China Financial and Economic Development Association | Innovative Thinking of Digital Transformation | 3 | ||
| 2021/12/20 | Greater China Financial and Economic Development Association | Corporate Reputation and Governance, from a Big Data Perspective | 3 | ||
| 2022/11/14 | Taiwan Stock Exchange | CATHAY SUSTAINABLE FINACE AND CLIMATE CHANGE SUMMIT | 6 | ||
| Independent Director | Liu ,Len-yu | 2022/7/7 | Taiwan Corporate Governance Association | Net zero carbon reduction pathway for listed companies | 1 |
| 2022/8/31 | Taiwan Corporate Governance Association | A new horizon for digital transformation | 1 | ||
| 2022/9/16 | Taiwan Corporate Governance Association | Seminar on Misreporting and Director Responsibility | 3 | ||
| 2022/10/19 | Taiwan Corporate Governance Association | The 18th (2022) Corporate Governance Summit Forum - Enhancing the functions of directors and implementing corporate sustainable governance | 3 | ||
| Independent Director | Hwang, Tsing- yuan | 2022/4/8 | Securities and Futures Institute | The Net Zero Trend: Practical Observations from Board ESG Decision-making | 2 |
| 2022/4/8 | Securities and Futures Institute | Global technology risk and security governance strategy | 2 | ||
| 2022/9/16 | Securities and Futures Institute | Directors' Functions and Board Operational Practices | 2 | ||
| 2022/9/16 | Securities and Futures Institute | International Trend of Anti-Money Laundering and Combating Terrorism Financing | 2 | ||
| 2022/9/16 | Securities and Futures Institute | Fair Hospitality Principle | 3 | ||
| Independent Director | Chen, Yue-min | 2022/11/13 ~2022/11/14 |
Taiwan Stock Exchange | CATHAY SUSTAINABLE FINACE AND CLIMATE CHANGE SUMMIT | 9 |
| 2022/11/30 | Greater China Financial and Economic Development Association | AI Thinking and Digital Transformation | 3 |
Continuing education of company executives
| TITLE | NAME | DATE | ORGANIZER | COURSE | HOURS |
| Corporate Governance Manager | Huang, Teh-Tsai | 2019/07/31 | Securities and Futures Institute | “(Independent) Directors and Supervisors and Corporate Governance Practice Workshop” | 12 |
| 2020/04/23 | Securities and Futures Institute | “Corporate Governance Practices: Using Performance Management to Improve Operational Effectiveness” | 3 | ||
| 2020/05/12 | Taiwan Academy of Banking and Finance | Corporate Governance and Remuneration Committee Operations | 3 | ||
| 2021/9/27 | Securities and Futures Institute | Legal Liability and Case Analysis for Insider Trading | 3 | ||
| 2021/10/13 | Securities and Futures Institute | Relevant Regulations and Operational Practices of the Audit Committee | 3 | ||
| 2021/10/26 | Securities and Futures Institute | Corporate Tax Governance and Tax Technology Solutions, From the Perspective of ESG Trends and the Epidemic Environment | 3 | ||
| 2021/11/3 | Securities and Futures Institute | 2021 Annual Prevention of Insider Trading Disseminate Conference | 3 | ||
| 2022/9/21 | Securities and Futures Institute | Tax Regulations and Practices for Controlled Foreign Company(CFC) | 3 | ||
| 2022/10/13 | The Institute of Internal Auditors | Analyze business performance from financial statements and risk prevention | 6 | ||
| 2022/10/14 | The Institute of Internal Auditors | How to use digital technology to explore and improve the operation process and fraud detection？-discussion on audit practice | 6 |
Preventing insider trading education promotion
The Company hosts educational awareness training pertaining to "Prevention of Insider Trading" and relevant regulations at least once a year. Newly appointed directors and managers will be scheduled for these courses respectively. The Company's current directors and management has undertaken the aforementioned education training on December 3th, 2020. The course includes non-disclosure related issues regarding material information, the definition of insider trading, and case studies.
Succession Planning for Board Members and Key Management
- Selection of Directors
For many years, the Company has been operating with high standards of corporate governance and corporate succession planning. In 1996, the independent director system was introduced, the Remuneration Committee was established in 2011, and the Audit Committee was established in 2016. In order to avoid compromising independence of independent directors, the term of office of independent directors does not exceed three terms. Optimization of the Board of Directors shall be carried out step by step by a gradual process.
In addition to the professional background and skills, the Directors of the Company should also have expertise in the company’s business and planning. To enhance the professionalism of the Board Members and continue to improve, Directors should consider the scope beyond the professional capabilities. Director courses should be selected in relation to the nature of the Company’s industry in finance, risk management, sales, business, legal affairs, accounting, corporate social responsibility, internal control systems or financial reporting responsibilities, to ensure all Board Members have a considerable degree of industry knowledge and attain new knowledge.
The company launched the Chairman’s succession plan in 2019 to cultivate the Company’s internal senior managers to join the Board of Directors and familiarize them with the operation of the Board of Directors, and expand their participation in the Group’s operating units, work rotation, and expatriate experience. After the full re-election of Directors in June 2019, Chairmanship of Terry Gou was successfully handed over to Liu Young-Way, the general manager of the company's S Group, and the founder Terry Gou served as a director of the company. - Succession Planning for Key Management
The Company emphasizes that in addition to having certain professional skills, high-level managers must also maintain a consistently high level of ethics and integrity, with the concept of "What needs to be done, do as promised". Therefore, development of their hard and soft knowledge requires long-term cultivation and execution. The Company’s senior managers are responsible for related businesses within the organization, and use job rotation and assignments, one-on-one experience transfer and coaching; and through the management committee, deepen the understanding of the business philosophy and the cultivation of various operation and management skills were used to select key members of the succession echelon. On January 1, 2020, You, Xiang-fu; Lu Fang-ming; Chien, Yi-bin; and Chen Wei stepped down as managers. Wang, Charng-yang; Chiang, Chih-siung; Lin, Chung-cheng; and Chu, Cheng-qing stepped in as managers of the Business Groups.
In response to the Group’s organizational development and growth momentum, the Company will not only externally recruit outstanding high-level managers, but also continue to actively cultivate potential mid-level and high-level managers internally, strengthen individual counseling and work exchanges, and provide job rotation and assignment plans when appropriate. Enabling the selection of all-round talent, resulting in a targeted strengthening of the future management team.
No.2, Ziyou St., Tucheng Dist., New Taipei City 236, Taiwan
+886-2-2268-3466
No.2, Ziyou St., Tucheng Dist., New Taipei City 236, Taiwan
+886-2-2268-3466
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