Section 1 Structure of Board of Directors |
| Article 20 | The board of directors of a securities firm shall direct the company's strategies, supervise the management and be responsible to the company and shareholders. Procedures and arrangement relating to corporate governance shall ensure that, in exercising its authority, the board of directors will comply with laws, regulations, articles of incorporation, and the resolutions of shareholders' meetings of the company.
Regarding the structure of the board of directors of a securities firm, an appropriate number of the board members, which shall not be less than five, shall be determined based on the review of the scale of corporate management and operation and the shareholding of the major shareholders and by taking into consideration of the practical needs for operation. If independent directors are to be appointed, reasonable professional qualifications and objective conditions on how these directors may exercise powers independently shall be carefully reviewed.
The board of directors shall have members of diverse backgrounds. No more than one third of the directors may act as the company's managers at the same time. The board of directors shall formulate appropriate and diverse strategies based on how the board works, type of operation, and development needs, for which standards covering at least the following two aspects shall be included:
- Basic qualifications and value: such as gender, age, nationality and culture.
- Professional knowledge and skills: including professional background, such as law, accounting, industry, finance, marketing or technology, professional skills and industrial experience.
The board members shall have the necessary knowledge, skill, and experience for performing their duties. To achieve the ideal goal of corporate governance, the board of directors shall have the following abilities:
- ability to make operational judgment;
- ability to perform accounting and financial analysis;
- ability to conduct management administration;
- ability to conduct crisis management;
- possession of securities and financial derivatives products professional knowledge;
- possession of perspective of international market;
- ability to lead; and
- ability to make decisions.
- possession of knowledge of and ability for risk management.
The board of directors shall be aware of the securities firm's operational risk exposure, such as market risk, credit risk, liquidity risk, operational risk, legal risk, reputation risk, and other types of risk relating to the securities firm's operation, to ensure effectiveness of risk management and shall be ultimately responsible for risk management.
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| Article 20-1 | To achieve the goal of corporate governance, the board of directors of a securities firm has the following main job responsibilities:
- Establish an effective and appropriate internal control system.
- Elect and supervise managers.
- Review the company's management policy-making and operation plan, and supervise its execution.
- Review the company's financial objectives and supervise how they are accomplished.
- Supervise the results of the company's operation.
- Standards for performance evaluations and emoluments for managers and salespersons, and the structure and system of directors' emoluments.
- Supervise and handle the risks the company is facing.
- Ensure the company's compliance of applicable laws.
- Plan for the company's future objectives.
- Create and maintain the company's image and make the company a responsible member of the society.
- Elect accountants, lawyers and other experts.
- Protect investors' rights and interests.
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| Article 21 | A securities firm shall follow the principle of protecting shareholders' rights and interests and treating all shareholders equally to incorporate a fair, just, and open procedure for the election of directors, encourage shareholders' participation, and adopt the cumulative voting mechanism in order to fully reflect shareholders' views in accordance with the regulations of the Company Act.
Unless otherwise authorized by the competent authority, for the majority of the board of directors of a securities firm, no two board members may be relatives within two degrees of consanguinity.
If the number of directors become less than five after the dismissal of one or more directors for any reason, the company shall reelect new directors at the next shareholders' meeting. If, however, a third of or more seats at the board of directors, based on the number of directors specified in the articles of incorporation, become vacant, the company shall convene a special shareholders' meeting for reelection within 60 days of occurrence of the dismissal.
The aggregate shareholding percentage of all of the directors of a securities firm shall comply with the laws and regulations. Restrictions on the share transfer of each director and the creation, release, or changes of any pledges over the shares held by each director shall be subject to the relevant laws and regulations, and the relevant information shall be fully disclosed.
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| Article 22 | A securities firm is advised to state in its articles of incorporation in accordance with the Company Act that the candidate nomination system shall be adopted for election of its directors, to assess carefully the qualifications of the nominees, and to ascertain whether any of the circumstances set forth in Article 30 of the Company Act and Article 53 of the Securities and Exchange Act applies with respect to the nominees, so that qualified directors will be elected. Said firm shall also abide by Article 192-1 of the Company Act.
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| Article 23 | Clear distinctions shall be drawn between the responsibilities and duties of the chairman of the board of a securities firm and those of its general manager.
It is not advisable for the offices of chairperson and general manager or other comparable post to be assumed by the same person, unless otherwise approved by the competent authority in accordance with the Regulations Governing Responsible Persons and Salespersons of Securities Firms. If the chairman also acts as the general manager or they are spouses or relatives within one degree of consanguinity, it would be advisable that the number of independent directors be increased.
Where a securities firm has set up a functional committee, it shall specify the powers and duties of the committee.
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