|Item||Implementation Status||Difference from Corporate Governance Practice Principles for TWSE/GTSM-Listed Companies and reasons|
|1. Does the Company set and disclose corporate governance code of practice according to corporate governance practice principles for TWSE/GTSM-Listed companies?||√||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|
|2. Equity structure and shareholder rights||No difference|
|(1) 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?||√||(1) The Investor Relations Department is dedicated to processing shareholder proposals or disputes.|
|(2) Does the Company have a list of those who ultimately control the major shareholders of the Company?||√||(2) The Company has a list of major shareholders and who ultimately controls them and discloses this information pursuant to the laws.|
|(3) How does the Company establish its risk management mechanism and firewalls involving related enterprises?||√||(3) 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, rules of endorsement and guarantee, loans to others and guidelines for acquisition or disposition of assets. Business relations between affiliated enterprises have been evaluated by an independent third party to prevent violations of unlawful transactions.|
|(4) Has the Company set internal standards to prohibit the use of undisclosed insider information to trade securities on the market?||√||(4) The Company has set operating procedures and critical control points to prevent insider trading.|
|3. Organization and responsibilities of the Board of Directors||No difference|
|(1) Does the Board of Directors set and implement a diversification policy?||√||(1) The Company has set “Corporate Goverance Pratical Principles” to ensure boards’ diversity. The company’s BOD has adopted nomination system. The members of the BOD are diversified and possess technology and finance backgrounds and experience of management practices in order to build the whole structure of the Company’s Board of Directors.(Please refer to page 12 for board members’ professons and independence)|
|(2) Has the Company establish other functional committees besides the Compensation Committee and Audit Committee?||√||(2) The Company set up two 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; other functional committees will be set up depending on future needs.|
|(3) Has the Company set performance assessment rules and methods for the BOD and does it perform this evaluation every year?||√||(3) The Company’s Procedures did not instill incentives for directors, and the Company directors will only be compensated for fixed compensations such as attendance fees, and variable incentives will not be appropriated.|
|(4) Does regularly evaluate the independence of the CPA?||√||(4) 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.|
|4. Does the TWSE/TPEx listed company have a dedicated unit/staff member in charge of the Company' corporate governance affairs (including but not limited to providing information required for director/supervisor's operations, convening board/shareholder meetings in compliance with the law, apply for/change company registry, and producing meeting minutes of board/shareholder meetings)?||√||The Company has established full-time personnel responsible for corporate governance related matters.
Primary responsibilities include providing information needed by the Board of Directors to carry out its functions, assisting directors in legal compliance, and processing matters relevant to convening Board meetings and Shareholders’ Meetings pursuant to relevant laws. 2017 implementations and results include the following:
|1. Assist independent and non-independent directors to carry out their duties:
a. Regularly notify Board members on the latest legal amendments and developments regarding company management and corporate governance.
b. Inspect level of information secrecy and provide company information needed by the Board, maintaining smooth bi-lateral communications between directors and various business managers.
c. Pursuant to the corporate governance code of practice, when independent directors need meet with internal audit supervisors in private to understand the Company’s financial status, the designated personnel shall assist to arrange such meetings.
|2. Assist in procedures and resolutions of the Board of Directors and Shareholders’ Meeting to comply with relevant legal regulations:
a. Report implementations of corporate governance to the Board, independent directors, and the Audit Committee to ensure that the Company’s Shareholders’ Meeting and Board are in compliance with relevant laws and corporate governance practice principles.
b. Assist or remind the Board to comply with relevant legal regulations when performing relevant duties or while making resolutions, and to propose opinions before the Board forms an illegal resolution
c. Responsible for reviewing the announcement for material decisions made by the Board to ensure the content of the announcement is in compliance with the law.
|3. Maintain shareholder relations: arrange directors to interact and communicate with major shareholders, institutional investors or minority shareholders as needed, to ensure that investors can receive adequate information in deciding the capital market value of the Company and to maintain decent shareholders’ rights.|
|4. Propose the agenda of the Board of Directors meeting and to notify the directors seven days prior to the designated date of meeting. Convene the meeting and provide information for the meeting. Notify the Board members to abstain from certain motions if conflict of interest is anticipated before the meeting, and to complete minutes to the Board meeting within 20 days after the meeting.|
|5. Process filing of Shareholders’ Meeting and to produce meeting notice within the legally-stipulated deadline, meeting agenda, meeting minutes, and to file for changes when amendment of the Company’s Articles of Incorporation or Procedures of Elections for Directors shall take place.|
|5. Does the Company establish communication channels and dedicate section for stakeholder on its website to respond to important issues of corporate social responsibility concerns?||√||The Company has set “Stakeholder Zone” and have the contact information for stakeholders to on its website to respond to major concerns regarding corporate social responsibilities from stakeholders.||No difference|
|6. Has the company appointed a professional stock affairs agency for shareholders affairs?||√||The Company authorized “Fubon Securities Co., Ltd.” as stock service agency to handle shareholder transactions.||No difference|
|7. Disclosure of information||No difference|
|(1) Does the Company set up website to disclose financial operations and corporate governance information?||√||(1) The Company has placed financial and corporate governance information of each year on its website.|
|(2) 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?||√||(2) 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.|
|8. 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)?||√||(1) 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.||No difference|
|(2) 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.|
|(3) Investor Relations: the Investor Relations Department was set up to specifically deal with shareholder proposals.|
|(4) Supplier Relationship: good relations with suppliers are maintained at all times.|
|(5) Relations with stakeholders: stakeholders shall communicate with the Company and put forward proposals to protect their due legal rights and interests.|
|(6) 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).|
|(7) Execution of risk management policy and risk measuring standards: various internal regulations are established legally for various risk management and evaluation.|
|(8) Execution of customer policies: stable and good relations with customers are maintained with the view of creating profits.|
|(9) Liability insurance for the Company’s directors and supervisors: liability insurance has been covered for directors and supervisors.|
|9. 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.|
Continuing education of Directors in 2017
|Director||Mao, Robert||2017/08/09||Taiwan Corporate Governance Association||Revolution in Audit Report||3|
|2017/08/09||Taiwan Corporate Governance Association||How Should Directors and Supervisors Supervise A Company’s Risk Management and Crisis Management||3|
|Director||Huang, Qing- yuan||2017/03/30||Chinese National Association of Industry and Commerce, Taiwan (CNAIC)||US Tax Trends and Impact on Taiwanese Enterprises and Implementation||3|
|2017/05/12||Taiwan Corporate Governance Association||Corporate Governance & Securities Regulations||3|
|2017/11/01||Taiwan Corporate Governance Association||Board of Directors and Supervisors Operational Practice and Corporate Governance Seminar – Training for Prevention of Money Laundering and Countering Terrorist Finance||3|
|Director||Sung, Hsueh- jen||2017/09/05||Taiwan Corporate Governance Association||The AI Revolution & Opportunities for Banking Industry||3|
|2017/11/21||Taiwan Corporate Governance Association||Possible Applications of Artificial Intelligence in Customer Service Robots and Insurance Products||3|