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Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies(2011.03.31) |
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Article 7
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A TWSE/GTSM listed company shall encourage its shareholders to actively participate in its corporate governance and hold shareholders meetings on the premise of legal, effective and safe proceedings. A TWSE/GTSM listed company shall seek all ways and means, including fully exploiting technologies for information disclosure, so as to enhance the attendance rate of shareholders at the shareholders meeting and ensure the exercise of shareholders rights by shareholders at the shareholders meeting in accordance with laws.
TWSE/GTSM listed companies are advised to arrange for their shareholders to vote by poll on the proposals included in the shareholders meeting agenda one by one and enter the voting results, namely the numbers of votes cast "For" and "Against" and the number of "Abstentions," for each proposal, after the shareholders meeting on the same day that it is held, into the Internet information reporting system designated by the TWSE.
If the company distributes souvenirs at its shareholders meeting, it shall not practice differential treatment or discrimination.
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Article 8
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A TWSE/GTSM listed company shall, in accordance with the Company Act and other applicable laws and regulations, record in the shareholders meeting minutes the date and place of the meeting, the name of the chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. With respect to the election of directors and supervisors, the meeting minutes shall record the method of voting adopted therefore and the total number of votes for the elected directors or supervisors.
The shareholders meeting minutes shall be properly and perpetually kept by the company during its legal existence. It would be advisable for a TWSE/GTSM listed company to fully disclose such meeting minutes on its website, if any.
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Article 26
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A TWSE/GTSM listed company shall stipulate the scope of duties of the independent directors and empower them with manpower and physical support related to the exercise of their power. The company or other board members shall not restrict or obstruct the performance of duties by the independent directors.
A TWSE/GTSM listed company shall stipulate the remuneration of the directors in its articles of incorporation or approve the same in a shareholders meeting. The remuneration of the directors shall fully reflect the personal performance and the long-term management performance of the company, and shall also take the overall operational risks of the company into consideration. Different but reasonable remuneration from that of other directors may be set forth for the independent directors.
When a TWSE/GTSM listed company, under its articles of incorporation, or by resolution of its shareholders meeting, or by order of the competent authority, sets aside a certain proportion of earnings as special reserve, such allocation shall be made after the allocation of legal reserve and before the distribution of director/supervisor compensation and employee bonuses, and the company shall provide in the articles of incorporation the method to be adopted for distributing earnings when reversal of the special reserve is added into the undistributed earnings.
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Article 27
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For the purpose of developing supervision functions and strengthening management mechanisms, the board of directors of a TWSE/GTSM listed company may, taking into account the size of the board and the number of the independent directors, set up audit, nomination, risk management or any other functional committees, and based on the beliefs in corporate social responsibility and sustainable operation, set up an environmental protection or other committees, and have them stipulated in the articles of incorporation.
Functional committees shall be responsible to the board of directors and submit the proposals to the board of directors for approval; provided that the performance of supervisor's duties by the audit committee pursuant to Article 14-4, paragraph 4 of the Securities and Exchange Act shall be excluded.
Functional committees shall adopt an organizational charter to be approved by the board of directors. The organizational charter shall contain the number, term of office, and power of committee members, as well as the meeting rules and resources to be provided by the company for exercise of power by the committee.
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Article 28-1
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A TWSE/GTSM listed company shall establish a remuneration committee. The professional qualifications for the committee members, the exercise of their powers of office, the adoption of the organizational charter, and related matters shall be handled pursuant to the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter.
The remuneration committee shall exercise the care of a good administrator in faithfully performing the official powers listed below, and shall submit its recommendations for deliberation by the board of directors. However, recommendations in connection with remuneration for supervisors may be submitted for deliberation by the board of directors only to the extent that the board of directors is authorized expressly by the company's articles of incorporation or by a resolution of the shareholders meeting to handle supervisor remuneration:
1. Prescribe and periodically review the performance review and remuneration policy, system, standards, and structure for directors, supervisors and managerial officers.
2. Periodically evaluate and prescribe the remuneration of directors, supervisors, and managerial officers.
When performing the official powers of the preceding paragraph, the remuneration committee shall follow the principles listed below:
1. With respect to the performance assessment and remuneration of directors, supervisors and managerial personnel of the company, it shall refer to the typical pay levels adopted by peer companies, and take into consideration the reasonableness of the correlation between remuneration and individual performance, the company's business performance, and future risk exposure.
2. It shall not produce an incentive for the directors or managerial officers to engage in activity to pursue remuneration exceeding the risks that the company may tolerate.
3. It shall take into consideration the characteristics of the industry and the nature of the company's business when determining the ratio of bonus payout based on the short-term performance of its directors and senior management and the time for payment of the variable part of remuneration.
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Article 29
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A TWSE/GTSM listed company shall select a professional, responsible and independent CPA to be its external auditor, who shall perform regular reviews of the financial conditions and internal control measures of the company. With regard to the irregularity or deficiency timely discovered and disclosed by the auditor during the review, and the concrete measures for improvement or prevention suggested by the auditor, the company shall faithfully implement improvement actions.
A TWSE/GTSM listed company shall evaluate the independence of the auditor engaged by the company regularly and no less frequently than once annually. In the event that the company engages the same auditor without replacement for 7 years consecutively, or if the auditor is subject to disciplinary actions or other circumstances prejudicial to the independence of the auditor, the company shall review the necessity of replacing the auditor, and shall submit to the board the conclusion of such review.
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Article 44
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A supervisor shall be familiar with the relevant laws and regulations, understand the rights, obligations, and duties of directors of the company and the functions, duties, and operation of each department, and attend meetings of the board of directors to supervise the operations and to state his/her opinions when appropriate so as to control or discover any abnormal situation early on.
A TWSE/GTSM listed company shall stipulate the supervisor's remuneration in its articles of incorporation or by an approval in a shareholders meeting.
Where a TWSE/GTSM listed company, under its articles of incorporation, or by resolution of the shareholders meeting, or by order of the competent authority, sets aside a certain proportion of its earnings as special reserve, such allocation shall be made after the allocation of legal reserve and before the distribution of director/supervisor compensation and employee bonuses, and the company shall provide in the articles of incorporation the method to be adopted for distributing earnings when the reversal of the special reserve is added to the undistributed earnings.
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Article 59
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A TWSE/GTSM listed company shall disclose the following information regarding corporate governance in the fiscal year in accordance with laws and regulations of the TWSE and GTSM.
1. Corporate governance framework and rules.
2. Ownership structure and the rights and interests of shareholders.
3. Structure and independence of the board of directors.
4. Responsibility of the board of directors and managerial officers.
5. Composition, duties and independence of the audit committee or supervisors.
6. Composition, duties and operation of the remuneration committee.
7. The remuneration paid to the directors, supervisors, general manager and vice general manager in the most recent fiscal year, the analysis of the percentage of total remuneration to the net profit after tax, the policy, standard and package of remuneration payment, the procedure for determination of remuneration and the connection with the operation performance. Under a specifically special scenario, remuneration of the directors and supervisors shall be disclosed respectively.
8. The progress of training of directors and supervisors.
9. The rights of and relationships between the stakeholders.
10. Details of the events subject to information disclosure required by law and regulations.
11. The enforcement of corporate governance, differences between the corporate governance principles implemented by the company and these Principles, and the reason for the differences.
12. Other information regarding corporate governance.
A TWSE/GTSM listed company is advised, according to the actual performance of the corporate governance system, to disclose the plans and measures to improve its corporate governance system through appropriate mechanisms.
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