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Solid Corporate Governance

Management Approach

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 2021 to 2024, including "creating blue ocean markets and products in collaboration with customers," "developing 5G products and preparing for 6G technology," "building an A+ management team," "establishing a new generation of intelligent production plants," and "innovating corporate governance and realizing a sustainable vision" to implement sustainable corporate governance.

Operation of the Board of Directors

Unimicron’s Board of Directors is comprised of 9 directors, including 3 independent directors. There are 5 directors between age 51 to 60 and 4 directors above 60 years old. The term of a director is three years. The selection of the directors is in accordance with the Company’s provisions on the “Regulations for Election of Directors”. Unimicron has adopted a nomination system. The candidates will be elected at the Shareholders’ Meeting and cumulative voting will be used. A shareholder is entitled to one vote per share multiplied by the number of directors to be elected. The votes can be cast to one candidate or distributed to multiple candidates. The number of directors to be elected is in accordance with the stipulations of the Company's Articles of Association and related announcements. The candidate with the most vote will be designated as the director, followed by independent directors. For information on board members, please refer to the information on P.4-P.5 of the 2020 Annual Report .

Board Governance Principles

The board of directors meets at least once a quarter, in compliance with the Company's “Rules and Procedures of Board of Directors Meetings,” to review business performance and discuss major investment issues and future development strategies, etc. A total of 9 board meetings were convened in 2020, with an average attendance rate of 98%. The major issues passed at the board meeting will be immediately disclosed in the "Market Observation Post System." The "Rules and Procedures of Board of Directors Meetings" clearly stipulate the guidance on recusal due to conflicts of interest. If the director himself/herself or his/her legal representative has an interest in the meeting matter, the director or the legal representative shall provide an explanation on the matter at the said board meeting. If it may be harmful to the Company’s interests, they shall not participate in the discussion and voting, shall be recused during discussion and voting, and shall not represent other directors in exercising their voting rights.

Unimicron’s shareholders are also able to exercise their voting rights at the shareholders' meeting by e-voting. In 2020, the voting rights exercised by electronic voting accounted for 50.42% of Unimicron’s total issued shares and accounted for 62.68% of the attendance rate of the shareholders' meeting in the current year.

Director Diversity

The Board of Directors of the Company is composed of directors with different professional backgrounds, including management, finance and accounting, chemicals, physics, etc. The members include presidents and CFOs of listed companies, and operators of technology and investment companies, providing professional advice and opinions from a wide range of industry experience, which is very helpful to the Company's operation plan and direction. The Board of Directors is the highest governing body of the Company and its main responsibilities include reviewing operational performance, preventing conflicts of interest and implementing regulatory compliance. The Board of Directors meets at least once a quarter and operates in accordance with the Company's "Rules and Procedures of Board of Directors Meetings." Currently, there are three independent directors (including one female director) on the Board of Directors, all of whom are appointed for a term of no more than three years, and more than half of the directors are not managerial officers of the Company. The Company places emphasis on the independence and gender equality of its Board of Directors and has set a target of having at least three independent directors and at least one female director, and continues to maintain a 100% achievement rate of this target. To enhance the functions of directors, we also encourage directors to actively participate in refresher courses and arrange training sessions from time to time. The Company has consigned the Securities and Futures Market Development Foundation to conduct a 3-hour educational training course of "Advanced Practice Seminar for Directors and Supervisors (Including Independent Directors) “5G Key Technology and Application Opportunities” in 2020. In 2020, directors have received 75 hours of training, with an average of 8 hours per director, covering 5G technology and applications, corporate governance, global trend analysis, financial report preparation, information security trends, corporate risks, regulatory practices, international market views, corporate sustainability, etc., to strengthen the functions of the Board of Directors. In 2020, there are 7 directors participated in ethics and integrity-related training, reaching 78%.

Functional Committees

To enable the Board to implement the monitoring, auditing and management functions, Unimicron has a “Remuneration Committee” and an “Audit Committee” under the Board of Directors, effectively performing the duties of each functional committee, and implementing the powers and responsibilities of management and supervision. For details concerning members of the Board of Directors and important resolutions, please refer to the information on P.22-P.23 and P.30-P.31 of the 2020 Annual Report .

Board Performance Evaluation Linked with Sustainability Performance

To improve the effectiveness of the Board of Directors, Unimicron’s financial department (stock affairs) will collect the operating information of the Board of Directors before mid-January each year, send the questionnaire to all directors (including independent directors) by email for self-evaluation, and collect and compile the questionnaires from directors at the end of January. The results of the performance evaluation of the Board of Directors are reported to the directors regularly before the first quarter of each year, and the implementation of the performance evaluation of the Board of Directors and the evaluation method are disclosed in the annual report. In addition to the internal evaluation, every three years, the Finance Department (Stock Affairs) will issue a RFA to request an external evaluation agency or experts to evaluate the performance of the Board of Directors. When evaluating directors' compensation or remuneration each year, the Human Resources Department's payroll section 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:

Internal Control

Unimicron’s Audit Office formulates an audit plan based on the enterprise’s annual risk, conducts routine and irregular internal audits and control, and has one audit supervisor and 6 full-time auditors. In 2020, Unimicron conducted audit on 53 operation type audits and found deficiencies in 11 operation types. Quarterly tracking and reviews were conducted for those deficiency items, and the completion rate of tracking and review improvement was 100%. The audit supervisors shall attend the board meeting of directors to report the audit results regularly to the board of directors and the audit committee, in order to implement the effectiveness of the internal control system.

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