Individual directors for diversification of Board members

• Article 23 of our “Best practice principles of corporate governance” has proposed that board members should be diversified in a manner that supports the company’s operations, business activities and growth. It is advisable that the number of the directors who concurrently serve as the managers of the company should not exceed one-third of the board seats. The diversification should be based on, but is not limited to, the following two principles:
1. Background and value: Gender, age, nationality, culture etc.
2. Professional knowledge and skills: Career background (e.g. law, accounting, industry, finance, marketing or technology), professional skill and industry experience.
• The Company’s board of directors has 9 members, which includes 3 independent directors.
• 11.11% of directors concurrently serve as employees of the company, and 88.89% of them do not have employee status.
• The directors’ age distribution range is as follows: 3 directors under(include) 50 years old, 4 are between 51 and 60 years old, and 2 are between 61 and 70 years old.
• All members of the board of directors have professional knowledge and skills covering ability to make judgments about operations, accounting and financial analysis, business management, crisis management, industry knowledge, an international market perspective, leadership, and decision making and the detail are as follows：

Performance Evaluation

The Company’s Board of Directors approved the “Self-Evaluation Evaluation of the Board of Directors” on August 4, 2021. We perform Performance Evaluations for the Board of Directors, Board members, and functional committees at least once a year. At least once every three years, moreover, an external professional independent institution or an external team of experts and scholars will conduct an evaluation. The Performance Evaluation report will be used as a reference for director candidates and director’s remuneration.

Board of Directors status of evaluation and implementation:

• Evaluation of external independent professional institution.

  1. External Professional Independent institution: Taipei Foundation of Finance.
  2. Evaluation Period: 2023.01.01-2024.08.26.
  3. Evaluation Scope: Board of director and functional committee.
  4. Evaluation Method: The evaluation mainly consists indicator reviews and field interviews.
  5. Evaluation Process:
     

     Application	2024.08.09
     Contract Signing	2024.08.26
     Evaluation Indicator	2024.08.12 – 2024.08.26
     Committee Review	2024.08.28 – 2024.09.06
     Field Interviews	2024.10.17

  6. Evaluation Result: Based on the review, the written documentation provided by the evaluated company on the seven major aspects of the evaluation indicators fully complies with the requirements. Additionally, the overall operations of the board of directors align with the relevant regulations set by the competent authority. The results of the performance Evaluation were recorded in the report of the fourth time of the tenth term Board of Directors on December 26, 2024.
  7. Suggest:
     

     To promote more efficient sustainable governance and development, it is recommended that the evaluated company upgrade the current Sustainable Development Committee to a functional committee of the Board of Directors, add independent directors, and instruct the management department to establish a dedicated sustainable development unit or task force to handle foreign exchange consolidation. This unit should also ensure that company information displays actions and translates external requirements and standards internally.	The Company will propose the response measures and submit them to the board of directors for resolution before implementation.
     To enable the evaluated company to develop more macroscopically and comprehensively in the future, it is recommended that the risk management and supervision mechanism be clearly defined as the responsibility of the Audit Committee, or listed under the authority of the Sustainable Development Committee established within the board of directors as recommended in the previous paragraph.
     The vision, mission, and core values of the evaluated company should be disclosed on the official website and in the sustainability report in a timely manner; it is also recommended to strengthen interactions with stakeholders and foster a more deeply rooted corporate cultural identity. This will not only retain high-quality employees but also enhance the overall effectiveness of corporate governance and customer communications.
     In promoting ESG strategies, in addition to complying with relevant laws and regulations set by competent authorities (institutions), it is recommended to reference international commitments or norms in export markets. Early revisions or enhancements should be made, with proactive and timely deployments, to boost competitiveness and maintain a leading edge.

• Self-evaluation

  1. Basis: “Self-Evaluation Evaluation of the Board of Directors” of the Company.
  2. Execution unit: Agenda group of Board of director.
  3. Evaluation Period: 2023.01.01-2023.12.31.
  4. Evaluation Scope: Board of director, members of Board of director and functional committee.
  5. Evaluation Method: The evaluation will be conducted through a self-assessment questionnaire.
  6. Evaluation Result:
  1. Board of Directors: The average score in each aspect of the overall Board of Directors was 100.0, which showed that the Board of Directors operational status was good. The Board of Directors fully guided and supervised Company policies, major business, and risk management.
  2. Individual directors: After the self-evaluation of each director, the overall average score was 97.1, with scores of 100.0 in the five aspects. This showed that the directors highly praised the operational efficiency and effects of various indicators. Only the aspect of “participation in the operation of the Company ” scored 91.7. The main reason is that the number of companies in which some directors hold concurrent positions is higher than the set value and the attendance rate by some directors is below 85%. If there is a situation of proxy authorization and the attendance rate will not reach the set value. Considering that all the directors entrusting proxy have issued letters of proxy in accordance with the law to attend the meeting on behalf of them and that they have fully expressed opinions on all proposals in the letters of proxy and provided professional suggestions at the same time, therefore, there is no significant impact on the operation of the Board of Directors.
     

     Board of Directors				Individual director
     Aspect	Number of questions	Average score		Aspect	Number of questions	Average score
     A. Participation in the operation of the Company.	12	100.0		A. Understand the objectives and mission of the Company.	3	100.0
     B. Improvement of the quality of the board of directors’ decision making.	12	100.0		B. Understanding of directors’ job responsibilities.	3	100.0
     C. Composition and structure of the board of director.	7	100.0		C. Participation in the operation of the Company.	8	91.7
     D. Election and continuous education of the directors.	7	100.0		D. Internal relationship management and communication.	3	100.0
     E. Internal control.	7	100.0		E. Directors’ professionalism and continuing education.	3	100.0
     Total / Average score	45	100.0		F. Internal control.	3	100.0
     				Total / Average score	23	97.1

  3. Functional committees: The average score of the Audit Committee and the Remuneration Committee was each 100, which shows that the overall operation of the functional committees is optimal and they can exercise their proper powers and functions.
     

     Aspect	Audit Committee		Remuneration Committee
     	Number of questions	Average score	Number of questions	Average score
     A. Participation in the operations of the Company.	4	100.0	4	100.0
     B. Understanding of functional committee’s job responsibilities.	5	100.0	5	100.0
     C. Improvement of the quality of the functional committees’ decision making.	7	100.0	7	100.0
     D. Makeup of the functional committee and election of its members.	3	100.0	3	100.0
     E. Internal control.	3	100.0	–	–
     Total / Average score	22	100.0	19	100.0

  7. Evaluation Result: In 2023, the attendance rates of the Board of Directors, the Audit Committee, and the Remuneration Committee reached 94.44%, 94.44%, and 100% respectively, and each director had full expression and suggestions on each of the Company’s proposals and gave the utmost support. Therefore, according to the above self-evaluation results, the Company’s Board of Directors, Board members, and each functional committee reflected good operational status. The results of the performance Evaluation were recorded in the report of the twelve time of the ninth term Board of Directors on February 22, 2024.