Corporate Governance
Corporate Governance Framework
Unimicron implements corporate governance based on the Company's vision of “a world-class high-tech Company with high added value, high quality, high productivity, and an emphasis on innovation and service” and “pursuing customer, employee, shareholder satisfaction and social responsibility”. The Company follows the six criteria in the implementation of specific actions. At the same time, to innovate corporate value, we have set five goals for the period from 2022 to 2025, including “Collaborate with customers to create blue ocean markets and products”, "Developing 5G products to prepare for 6G technology", “Establish A+ management team to build world-class competitiveness”, “Make good use of digital operations to establish efficient and intelligent operations and services ", “Press ahead on ESG, care for the earth and company sustainability” to implement sustainable corporate governance.
Operation of the Board of Directors
Unimicron's Board of Directors is composed of 9 directors with different professional backgrounds (including one female director), who are responsible for the Company's operations and supervision. For information about the composition of the Board of Directors and the implementation of the diversity policy, please refer to Page 8 of the 2022 Annual Report and the Company’s website. The 12th term of directors was elected on June 19, 2020, for a term of three years, with three independent directors, two individual directors, and four legal person director representatives on the Board of Directors, and only the Chairman of the Board of Directors, who is concurrently serving as the Group Chief Strategist, is also a managerial officer’s the Company, among the nine directors. The three independent directors are concurrently serving as independent directors of no more than three other public companies. 9 board meetings were held in 2022, with an average attendance rate of 96%.
Functional committees such as the ESG Committee and the Business Continuity and Risk Management Committee report to the Board of Directors on a regular basis once a year, reporting on ESG-related issues such as sustainability performance indicators, greenhouse gas inventory and committee operations. If there are any negative events affecting the stakeholders, the responsible unit shall report to the Board of Directors. In 2022, there were five ESG cases reported to the Board of Directors.
Election of Directors
The election of directors is based on the "Rules for Election of Directors", adopting a system of nomination of candidates for election by the shareholders' meeting, and a registered cumulative voting system whereby each share has the same number of votes as the number of directors to be elected, and the votes may be allocated to just one person or a number of persons. Based on the number of seats in accordance with the Company's Articles of Incorporation and related announcements, the candidates who receive more votes shall be elected as directors and independent directors in order, respectively.
The composition of Unimicron's Board of Directors refers to the provisions of Article 20 of "Corporate Governance Best Practice Principles", and considers the operation type and development needs to formulate an appropriate diversity policy, including but not limited to the following two major aspects of the standards:
1. Basic conditions and values: Gender, age, nationality, culture, etc.
2. Professional knowledge and skills: Professional background, professional skills, industry experience, etc.
Board members should possess the knowledge, skills and literacy necessary to perform their duties, including operational judgment, accounting and financial analysis, management skills, crisis management, industry knowledge, international market perspective, leadership and decision-making skills.
The independent directors of Unimicron shall concurrently serve as independent directors of no more than three other public companies, and at least one of them shall have accounting or financial expertise. Each director shall not have a spouse or a relative relationship within the second degree of affinity.
Unimicron established the "Methods to Evaluate Performance of the Board" in 2020 to conduct regular performance evaluations of the Board, Board members, and functional committees on an annual basis, and at least once every three years by an external professional and independent organization or a team of external experts and academics. The results of the Board performance evaluation will be used as a reference for the selection or nomination of directors.
Board of Directors
The members of the Board of Directors are elected by all shareholders at the shareholders' meeting in accordance with the "Rules for Election of Directors" in accordance with the law and the Company's Articles of Incorporation. The committees of the Board of Directors are nominated and selected by the Board of Directors in accordance with their organizational procedures. All three independent directors meet the requirements of professional qualifications, working experience, restrictions on concurrently serving as an independent director and independence under the "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies."
In order to improve the functions of directors and encourage directors to actively participate in training courses, the Company arranges training courses from time to time. In 2022, the total number of training hours for all directors was 76 hours. Each director has 6 hours of advanced training, with an average of about 8 hours of training. The training content covers low-carbon economy, corporate governance, corporate sustainability, ESG, corporate mergers and acquisitions, risk management, legal practices, etc., so as to strengthen the functions of the Board of Directors. Directors' training in 2022 was disclosed on Page 22 of Unimicron's 2022 Annual Report.
Professional and Background of Directors
Note1: All directors are not under any condition pursuant to Article 30 of the Company Act. Please refer to Pages 4-5 of the Annual Report & the Company’s website for Directors’ relevant industrial experience.
Note 2: None of the Independent Directors of the Company, their spouses, or relatives within the second degree of kinship serve as directors, supervisors or employees of the company or its affiliates or having a specific relationship with the Company. None of them (or in the name of others) hold any shares of the Company. In the last two years, they do not receive any remuneration for providing business, legal, financial, accounting and other services to the Company or its affiliates.
The Diversity & Independence of the Board of Directors
Board Performance Evaluation Linked with Sustainability Performance
Unimicron regularly executes the performance evaluation of the Board, Functional Committees, and Individual Directors every year by following “Methods to Evaluate Performance of the Board”. To improve the effectiveness of the Board of Directors, Unimicron’s financial department (stock affairs) collects the operating information of the Board of Directors before mid-January each year, sends the questionnaire to all directors (including independent directors) by email for self-evaluation, and collect and compile the questionnaires at the end of January. The results of the performance evaluation of the Board are reported to the directors regularly before the first quarter of each year, and the implementation and evaluation methods are disclosed in the annual report. In addition to the internal evaluation, at least once every three years, the Finance Department (Stock Affairs) will request an external evaluation agency or experts to evaluate the performance of the Board of Directors.
The evaluation results of the Board and Functional Committee (including Audit Committee and Remuneration Committee) self-assessment and self-assessment of directors members in 2022 were “excellent”. The Company engaged with an external independent institution, Taiwan Corporate Governance Association, to conduct an assessment of board performance, and completed the evaluation in 2022. The assessment comprised 8 scopes including Composition, Direction, Authorization, Monitoring, Communication, Internal control, Risk management, Discipline of the Board and Others, and was executed through online self-assessment and video interview. The assessment report was released on February 18, 2023, and reported to the Nominating Committee and the Board on March 13, 2023. Please refer to the Company’s website “Investors/Corporate Governance”.Company’s website “Investors/Corporate Governance”.
The Company’s policies, standards, and packages for payment of remuneration and the procedures for determining remuneration are mainly implemented in accordance with personnel-related regulations of the Company and the “Remuneration Committee Charter”. Please see Pages 18-19 of the 2022 Annual Report for more information. Remuneration to Directors and employees is distributed in accordance with the “Articles of Incorporation”. These are submitted to the Remuneration Committee for resolution, approved by the Board of Directors and then reported at the shareholders’ meeting. The remuneration of directors and managing officers of the Company takes into consideration industry standards, as well as the reasonableness of the connection between remuneration and individual performance, the Company's business performance, and future risk exposure. As for employee remuneration, it takes into account industry standards, as well as the competitiveness of the Company’s talents in the industry. The Company’s overall business performance and profit, budget planning and performance review of various units, occupational disaster prevention, environmental indicators, market planning, and future operational risk evaluations are all important bases for distribution. When evaluating directors' compensation or remuneration each year, the Payroll Section of the Human Resources Department determines individual directors' compensation based on the results of their performance evaluations, and the linkage between the Board's remuneration and sustainable performance is as follows:
Conflict of Interest Management
Unimicron's “Rules and Procedures of Board of Directors Meetings”, “Audit Committee Charter” and “Remuneration Committee Charter” all stipulate the provisions of conflicts of interest, stating that directors themselves or the legal persons they represent who have an interest in the matters of the meeting shall make an explanation at the current board meeting. If it has the likelihood to be detrimental to the interests of the Company, he/she shall not participate in the discussion and vote, shall recuse himself/herself from the discussion and vote, and shall not be a proxy on behalf of other directors to exercise their voting rights.
Functional Committee
In order to enable the Board of Directors to carry out its supervisory, audit and management functions, Unimicron has established “Remuneration Committee” and “Audit Committee” under the Board of Directors to effectively carry out the duties of each functional committee and to implement the authority and responsibility of management and supervisory. For members and major resolutions of the "Remuneration Committee" and "Audit Committee", please refer to Operation of the Remuneration Committee on Page 36 and Operation of the Audit Committee on Page 23 of the 2022 Annual Report.
Internal Control
The audit office executes the annual internal audits and controls based on audit plans regularly and irregularly. There are 1 audit supervisor and 8 full-time auditors. The auditors attend courses at educational institutions, regular meetings and seminars held by the Internal Audit Association and the Computer Audit Association every year. In 2022, 60 audits were conducted, and 10 operational deficiencies were found. The deficiencies were tracked and reviewed on a quarterly basis, and the improvement rate was 100%. Based on the audit results, the audit supervisor will report to the board of directors and the Audit Committee on a regular basis to confirm the effectiveness of the internal control system.
