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Article 4
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The minimum number of members of the board of a TWSE listed company is five, and the minimum number of independent directors is three and one-fifth of the seats in the board.
The board of directors of a TWSE listed company shall have not less than one director of a different gender starting from 2024, provided if the term of office of the directors does not yet expire in 2027, this requirement may be applied starting from the expiration of the term of office of the directors.To a TWSE listed company that has a paid-in capital of NT$10 billion or more or is in the financial industry, this requirement shall apply starting from 2024, provided where the term of office of the directors does not yet expire in 2024, this requirement may be applied starting from the expiration of the term of office of the directors.
From 2024, one-half or more of the independent directors of a TWSE listed company shall serve no more than three consecutive terms, provided if the term of office of the directors does not yet expire in 2024, this requirement may be applied starting from the expiration of the term of office of the directors. Starting from 2027, all of the independent directors of a TWSE listed company shall serve no more than three consecutive terms, provided if the term of office of the directors does not yet expire in 2027, this requirement may be applied starting from the expiration of the term of office of the directors.
Where the chairman of the board of directors and the president or person of an equivalent post of a TWSE listed company are the same person, spouses or relations within the first degree of kinship, not less than four independent directors shall be established before 31 December 2023, provided where the number of directorships exceeds 15, the minimum number of independent directors is five, and there shall be a majority of directors who do not serve concurrently as an employee or officer.
A net worth of NT$20 billion shall be substituted for the paid-in capital of NT$10 billion under paragraph 3 if a company's shares have no par value or have a par value other than NT$10 per share.
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Article 8
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Whena TWSE listed company violates the second to fourth paragraphs of Article 4, or when the number of directors falls below five due to the dismissal of a director for any reason, the company shall hold a director re-election or by-election at the next following shareholders meeting. When the number of directors falls short by one-third of the total number prescribed by the articles of incorporation, the company shall convene a special shareholders meeting within 60 days of the occurrence of that fact to hold a director by-election.
When the number of independent directors at a TWSE listed company is lower than the requirement in the first paragraph of Article 4 or its articles of incorporation, an independent director by-election shall be held at the next shareholders meeting. When all independent directors have been dismissed, the company shall convene a special shareholders meeting to hold a by-election within 60 days from the date on which the fact occurred.
A TWSE listed company violating the fifth paragraph of Article 4 shall correct the violation within three months from the date on which the fact occurred.
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Article 14
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Members of the board of directors shall faithfully conduct corporate affairs and perform the duty of care of a good administrator. In conducting the affairs of the company, they shall exercise their powers with a high level of self-discipline and prudence. Unless matters are otherwise reserved by law or in the articles of incorporation for approval in shareholders meetings, they shall ensure that all matters are handled according to the resolutions of board of directors.
If a director of a listed company resigns, or is replaced according tothe third paragraph of Article 27 of the Company Act, the resigning director or corporate shareholder shall give immediate notice to the company and its chief corporate governance officer.
A TWSE listed company shall arrange continuing professional education for its directors. A director shall complete continuing education for up to three hours in the year he/she assumes office each term, provided if the term of an incumbent director has not expired in 2023,such requirement may apply from the expiration of his/her term of office.
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Article 18
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A TWSE listed company shall regularly evaluate the performance of the board of directors and conduct self-evaluation or peer review of individual board members every year and report the results of performance evaluation to the TWSE.
Each year from 2014, a TWSE listed company shall regularly conduct a functional committee performance evaluation of the audit committee and the remuneration committee and report the performance evaluation results to the TWSE.
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Article 19
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Performance evaluations of the board of directors should cover the following aspects and the criteria for evaluation should be established with the company's needs being taken into consideration:
- Participation in the operation of the company;
- Improvement of the quality of the board of directors' decision making;
- Composition and structure of the board of directors;
- Election and continuing education of the directors; and
- Internal control.
Performanceevaluation of the board members (on themselves or peers) should coverthe following aspects and is subject to appropriate adjustments with the company's needs being taken into consideration:
- Alignment of the goals and mission of the company;
- Awareness of the duties of a director;
- Participation in the operation of the company;
- Management of internal relationship and communication;
- The director's professionalism and continuing education; and
- Internal control.
Performance evaluations of the functional committee should cover the following aspects and appropriate criteria for evaluation should be established with the company's needs being taken into consideration:
- Degree of participation in the operation of the company.
- Awareness of the duties of the functional committee.
- Improvement in the quality of decision making by the functional committee.
- Composition of the functional committee and election/appointment of committee members.
- Internal controls.
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Article 20
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The board of directors of a TWSE listed company shall appoint a unit to be in charge of meeting-related matters in accordance with the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
A TWSE listed company shall have in place, according to its business size, business condition, management needs, qualified corporate governance persons in an appropriate number and shall appoint one chief corporate governance officer as the most senior executive for corporate governance matters.
A TWSE listed company shall comply with these Directions in appointing its chief corporate governance officer, unless otherwise provided under the regulations of the competent authorities.
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Article 23
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A chief corporate governance officer shall be a qualified, practice-eligible lawyer or accountant or have been in a managerial position for at least three years in a securities, financial, or futures related institution or a public company handling legal affairs, compliance, internal audit, financial affairs, accounting, stock affairs, or corporate governance affairs as specified in Article 21.
In the case of a foreign company in Article 165-1 of the Securities and Exchange Act,the chief corporate governance officer'srelevant experiencein a public company may be substituted byrelevant experience in a foreign enterprise with a paid-in capital equivalent to NT$50 million or more.
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Article 27
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In the event of a TWSE listed company's violation of the requirements under Article 6, the first or third paragraph of Article 8, the first paragraph of Article 9, Articles 10, Article 12, the third paragraph of Article 14, the second to third paragraphs of Article 15, Articles 16 to 18, the second paragraph of Article 20 or Articles 21 to 25, the TWSE may impose a penalty of NT$30,000 on the company and require it to make the correction within a specified period of time. Failure to make the correction within the specified period of time will subject the company to a penalty of NT$10,000 for each business day until it has made the correction. The TWSE may impose a penalty of no less than NT$50,000 and no more than NT$5,000,000 and request the TWSE listed company to discipline the personnel in breach of duty if the violation is committed out of willful misconduct or gross negligence, or results in a material impact on shareholder equity or securities prices.
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