Operation of the Board of Directors

Self-Evaluation

The Company has established a "Board Performance Evaluation Method" to conduct performance evaluation at the end of each year. The scope of evaluation includes the Board of Directors, functional committees and individual directors. The evaluation results are quantified according to the evaluation indicators and submitted to the most recent Board of Directors report.

The evaluation results for 2024 will be submitted to the Board of Directors report on February 21, 2025.

Note:

1. The evaluation period for new directors is from the date of appointment to the end of the year.
2. The scoring criteria are divided into five levels, from 5 to 1, which are excellent, good, good, acceptable, and needs to be improved.

1. According to the "Board of Directors Self-Assessment or Peer Assessment Method", the "Taiwan Corporate Governance Association" is commissioned to conduct an external performance evaluation of the Board of Directors every three years, which is conducted in the form of questionnaires and on-site visits. The evaluation period is from July 1, 2023 to June 30, 2024, and the on-site visit date is August 30, 2024. The evaluation report will be completed on September 13, 2024, and the recommendations and improvements will be submitted to the directors.
2. The Taiwan Corporate Governance Association is an independent and professional corporate governance counseling and assessment organization that has provided corporate governance system assessment and evaluation services to more than 300 companies.
3. The scope of this review includes eight major aspects: composition of the board of directors, guidance of the board of directors, authorization of the board of directors, supervision of the board of directors, communication of the board of directors, internal control and risk management, self-discipline of the board of directors, and others such as board meetings and support systems.
4. General comments
   
   • Formulate a manager's remuneration system that includes short-term and long-term development goals to effectively motivate the team to pursue long-term interests and lay the foundation for sustainable development.
   • Directors’ performance evaluation is linked to their education status and attendance rate, and they are encouraged to attend shareholders’ meetings and pay attendance fees. This clearly conveys the company’s expectations of the responsibilities, obligations and active participation of board members.
   • Arrange for the vice president team to report to the directors on the business goals and development status of each product line, etc. Through active interactive communication among members on strategies and major issues, it is beneficial for board members to control the company's overall risks and grasp the strategic direction.

   • 2020/11/06 The board of directors passed a resolution to set up a corporate governance director. A sustainable development team was also set up, which is responsible for the company's operational governance related matters on a part-time basis. The members include the executive secretary of the board of directors, the accounting and stock affairs unit, the audit office and other departments and units related to the company's operations, to help promote the company's governance, integrity management and enhance corporate value.

5. Suggestions and improvements:
   
   • The performance of the internal audit supervisor is ultimately evaluated by the chairman. It is recommended that the performance evaluation of the internal audit supervisor should refer to the opinions of the audit committee to strengthen the audit committee's supervision of internal audit.
     Improvement: The audit has been regularly reported to the audit committee and is subject to the supervision of the audit committee. The specific method will be discussed later and submitted to the audit committee for confirmation.
   • It is recommended to keep a written record of the discussion of the board of directors and functional committees in the form of speech summaries to highlight the interaction of the participants and help track the resolutions.
     Improvement: The important speeches and suggestions of the directors have been recorded in writing and tracked
   • The company has established a "whistleblower system", established an independent whistleblower mailbox, and designated the audit unit to be responsible for the acceptance and investigation of whistleblower cases. It is recommended to add a mailbox directly connected to the board of directors (independent directors) and announce it to the public, establish multiple reporting channels, and complete the whistleblower reporting system.
     Improvement: In May 2021, the whistleblower reporting mailbox will be set up for the chairman of the audit committee and the audit unit to receive the whistleblower reporting system.

In order to motivate senior managers, outstanding key professionals and all employees to focus on long-term comprehensive performance and achieve sustainable operations, in recent years, the six major sustainable development strategies and goals have been linked to the short-term and long-term incentive remuneration of the company's general manager, CEO and senior managers.

Performance indicators for general managers, CEOs and senior managers:

1. Maintain the company's short-term profitability - Implementation method (weight): financial performance and achievement rate, 50% in total
2. Establishing the company's long-term development capabilities - Implementation methods (weight): Green product innovation, low-carbon manufacturing transformation, occupational safety and health 30%, employee training and team and senior management, establishment of senior management team, control of employee turnover rate and education and training results 10%, corporate strategy and corporate governance, ESG sustainable carbon reduction goals and plan implementation 10%