Board Structure
GUC attaches great importance to the diversity of board members. In order to reinforce corporate governance and promote sound development of board composition and structure, the capabilities that the board of directors should possess as specified in Article 20 of the Company's "Corporate Governance Code" are as follows: 1. Business judgment ability, 2. Accounting and financial analysis ability, 3. Management ability, 4. Crisis handling ability, 5. Industry knowledge, 6. Global market perspectives, 7. Leadership, and 8. Decision-making ability.
GUC's current board of directors consists of nine directors. Five of them, accounting for more than 50%, are the Company’s independent directors, and the relationship of spouses or relatives by blood within the second degree of relationship do not exist among the directors. Moreover, only one director is taking the Company's managerial officer position, i.e. Mr. Sean Tai, one of the juristic-person directors’ representatives, concurrently serving as the Company’s president. These facts indicate that the Board Independence requirement is met in the Company’s board of directors. Additionally, the Company's board members possess cross-industry and cross-field capabilities, demonstrating Board diversity and complementary support among board members. Directors also have their own skills and experiences in various professions such as legal, financial/accounting, industry, marketing/R&D, technology, business management. GUC's current implementation of Board Diversity Policy is indicated by individual directors’ portfolios listed in the table below:
The diversity goals for the future include but are not limited to the following two aspects/standards:
1. Basic conditions and values: gender, age, nationality, culture, etc. One female director was elected in the by-election in 2023 shareholders' meeting. In the future, at least one female director seat will be reserved and long-term female seat target is one-third of all board members. And the age criteria will be planned to achieve a balanced structure.
2. Professional knowledge and skills: professional backgrounds (such as legal, accounting, industry, finance, marketing or technology), professional skills, industrial experiences, etc.
3. To keep indenpendence, more than three consecutive terms of independent directors will be avoided.
Directors' Biographies
| Title | Name | Experience |
|---|---|---|
| Chairman | Dr. F.C. Tseng | Current Position: Vice Chairman of VIS, director of TSMC Previous Position: President of TSMC Academic Background: National Cheng Kung University |
| Director | Dr. L.C. Lu | Current Position: VP of Research & Development / Design & Technology Platform at TSMC and a TSMC Fellow. Previous Position: TSMC Fellow and Senior Director of Design and Technology Platform Academic Background: Yale University |
| Director | Wendell Huang | Current Position: Chief Financial Officer of TSMC Previous Position: Deputy Chief Financial Officer of TSMC Academic Background: Master, Business Administration, Cornell University |
| Director | Dr. Sean Tai | Current Position: President of GUC Previous Position: President for Nuvoton Technology Corporation Academic Background: Yale University |
| Independent Director | Jesse Ding | Current Position: Chair of Entie Commercial Bank Previous Position: President & CEO, Entie Commercial Bank President, Taipei Fubon Bank Academic Background: MBA, University of Detroit |
| Independent Director | Huang, Tsui-Hui | Current Position: Honorary Chair of Taiwan Venture Capital Association Chair and CEO of Hotung Venture Capital Group Previous Position: Chair of Taiwan Venture Capital Association Chair and President of Hotung Venture Capital Group Academic Background: MBA. Cornell University, U.S.A. |
| Independent Director | Dr. Cheng-Wen Wu | Current Position: President of STUST Previous Position: Distinguished Chair Professor and Chair of EE Department of National Tsing Hua University (NTHU) Academic Background: ECE from the University of California, Santa Barbara (UCSB) |
| Independent Director | Dr. Ho-Min Chen | Current Position：Distinguished Professor in the Department of International Business at National Taiwan University, member of the International Trade Commission under the Ministry of Economic Affairs Previous Position：Dean of the College of Social Sciences and Management at National Chung Hsing University, and a member of the National Development Fund Management Committee under the Executive Yuan. Academic Background：Business Administration from National Taiwan University, Master's degree in Applied Statistics from the University of Iowa |
| Independent Director | Dr. Kenneth Kin | Current Position: Honorary Chair Professor of College of Technology Management in NTHU Previous Position: SVP of TSMC Academic Background: Columbia University |
Performance Evaluation of Boards and Directors
GUC has established a Board's performance evaluation system. The Board of Directors approved the "Measures for Directors’ Performance Evaluation" in November 2016, and approved the "Performance Evaluation System for New Functional Committees" in October 2019 to encourage the Board and functional committee members’ self-invigoration, thereby enhancing the operational effectiveness of the Board and functional committees.Internal performance evaluation is conducted in the fourth quarter of every year, and the evaluation results were submitted to the Board in the first quarter of next year.
The external Board's performance evaluation is conducted at least once every three years by an external professional independent institution or an external team of experts and scholars, and the annual performance evaluation of the year is conducted at the end of the year.
The historical evaluation of the GUC's Board of Directors attained the result of "Good".Self-evaluation for〈Improvement of the Board's decision-making quality〉and 〈Participation degree in the Company's operations〉both continued demonstrating "Good".
In 2022, the Company’s Board of Directors received a rating of “Excellent” in its self-assessment. However, compared with 2021, the self-assessment result fell slightly. Among them, the performance in its “Participation in the Company’s operation” aspect was “Good,” while that in the aspect of “Improving the quality of the Board of Directors’ decision-making” dropped significantly.
In 2022, the board members of the Company received a rating of “Excellent” in the self-assessment, but compared with 2021, the self-assessment result remained the same. The performance in the “Managing Company goals and tasks” and “Internal control” aspects was “Excellent,” whereas performance in the “Internal relationship management and communication” aspect required improvement.
At the end of 2022, the Company entrusted an independent external agency, the “Taiwan Corporate Governance Association,” to conduct an evaluation on the performance of the Board of Directors for the period dating from November 1, 2021 to October 31, 2022. The agency appointed an on-site evaluation team (including two committee members, one director, and one researcher) to assess the performance of the Board of Directors based on indicators in the eight major aspects of Board composition, guidance, authorization, supervision, communication, self-discipline, internal control and risk management, and others (such as board meetings, support systems, etc.) through questionnaires and an on-site survey. The agency has only been involved in the training courses for the Company’s board members; therefore, it is considered independent. The agency submitted an evaluation report on December 12, 2022. Its summary and related suggestions are as follows, and the Company will report the results and improvement plans at the Board of Directors meeting on February 2, 2023.
Summary
1. The Company’s Board of Directors has a clear strategy formulation and discussion mechanism. Through the strategy meeting at the end of the year (now called the Strategy Committee meeting) and the follow-up meeting after the following year’s shareholders’ meeting, the heads of various units report to the Board members on aspects including finance, research and development (R&D), business, etc. Directors are invited to provide their opinions on such aspects, allowing them to participate in strategy formulation and take charge of medium and long-term risks and opportunities.
2. The Company is talent-oriented and focused on its strengths, based on technology and R&D. The Board of Directors and the management team are familiar with the Company’s potential risks and have established a risk-avoidance mechanism, which is specifically demonstrated in the aspects of talent retention and incentive measures to maintain the Company’s advantages among upstream as well as downstream supply chains and competitors.
3. The Company followed the initiative of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies,” which stipulates that the consecutive terms of Independent Directors shall not exceed three terms. Considering the need for passing on its experience, the composition of the Board of Directors shall be gradually improved so as to continuously promote the renewal of the Board of Directors.
4. The Company has a comprehensive orientation system for first-time Directors, in which a business briefing is presented by the President, the operations of the Board of Directors are explained by the Secretary of the Board, and matters related to the corresponding functional committees are reported by the Secretaries of the Audit Committee and the Remuneration Committee. The Company also provides an orientation handbook for new Independent Directors, which contains the Company’s internal regulations and organizational structure, in order to help them understand the operations of the Company and the Board of Directors.
Recommendations
In order to take into account supervision trends and corporate succession, the Company updates the members of the Board in stages. It is recommended that the Company set up a Nominating Committee at an appropriate time, or incorporate functions such as selection, cultivation and succession into the terms of reference of the Remuneration Committee so as to demonstrate the Company’s determination in pursuing corporate governance.
Improvement Plan
The Company plans to incorporate functions such as selection, cultivation and succession into the terms of reference of the Remuneration Committee.
Major Resolutions of BOD Meetings
| Date | Ratio of Attendance | Major Resolutions |
|---|---|---|
| 20230202 | 9/9 | 1. Approve 2022 financial statements and business report 2. Approve the proposal for each common share holder will be entitled to receive a cash of NT$14.0 per share allocated from retain earnings 3. Approve the nominated Directors (including Independent Directors) candidates |
| 20230427 | 9/9 | Approve 2023 Q1 financial statements |
| Date | Ratio of Attendance | Major Resolutions |
|---|---|---|
| 20220126 | 9/9 | 1. Approve 2021 financial statements and business report 2. Approve the proposal for each common share holder will be entitled to receive a cash of NT$7.0 per share allocated from retain earnings 3.Approve two nominated Independent Directors candidates |
| 20220428 | 9/9 | 1. Approve 2022 Q1 financial statements 2. Approve "Corporate Governance Best Practice Principles" revision 3. Approve "Procedures for Acquisition or Disposal of Assets " revision 4. Approve "Corporate Social Responsibility Best Practice Principles " revision |
| 20220519 | 9/9 | 1. Elect Jesse Ding as Chairman of Audit Committee 2. Appoint two new independent directors, Jesse Ding and Huang, Tsui-Hui, as members of Compensation Committee |
| 20220728 | 9/9 | Approve 2022 Q2 financial statements |
| 20221027 | 9/9 | 1. Approve 2022 Q3 financial statements 2. Approve 2023 audit plan 3. Approve modification of "Rules and Procedures of Board of Directors meetings" 4. Approve the establishment of "Procedures for Handling Material Inside Information". 5. Approve modification of internal regulations about whistle-blowing. 6. Set up Strategy Committee and approve "Strategy Committee Charter" |
| 20221201 | 1. Approve 2023 business plan 2. Approve 2023 Capex |
| Date | Ratio of Attendance | Major Resolutions |
|---|---|---|
| 20210128 | 9/9 | 1. Approve 2020 financial statements and business report 2. Approve the proposal for each common share holder will be entitled to receive a cash of NT$5.0 per share allocated from retain earnings |
| 20210429 | 9/9 | 1. Report 2021 Q1 financial statements to the board of directors 2. Approve the modification of Procedures for Ethical Corporate Management and Guidelines of Conduct Report |
| 20210729 | 9/9 | Report 2021 Q2 financial statements to the board of directors |
| 20211028 | 9/9 | 1. Report 2021 Q3 financial statements to the board of directors 2. Approve 2022 audit plan 3. Approve 2022 business plan 4. Approve 2022 Capex |
| 20211202 | 9/9 | 1. Appoint Sean Tai as President 2. Strategy Report |
| Date | Ratio of Attendance | Major Resolutions |
|---|---|---|
| 20200206 | 9/9 | 1. Approve 2019 financial statements and business report 2. Approve the proposal for each common share holder will be entitled to receive a cash of NT$5.0 per share allocated from retain earnings 3. Approve the nominated Directors (including Independent Directors) candidates |
| 20200507 | 9/9 | 1. Report 2020 Q1 financial statements to the board of directors 2. Appoint Blith Chiang as Accounting Controller |
| 20200514 | 9/9 | 1. Elect F.C. Tseng as Chairman of Board Meeting 2. Elect Benson Liu as Chairman of Audit Committee 3. Elect Wen-Wei Wang as Chairman of Compensation Committee |
| 20200730 | 9/9 | 1. Report 2020 Q2 financial statements to the board of directors 2. Appointed Mr. Daniel Chien, the Senior Vice President and CFO, as Corporate Governance Officer of GUC |
| 20201105 | 9/9 | 1. Report 2020 Q3 financial statements to the board of directors 2. Approve 2021 audit plan 3. Approve 2021 business plan 4. Approve 2021 Capex |
| 20201203 | 9/9 | Strategy Report |
| Date | Ratio of Attendance | Major Resolutions |
|---|---|---|
| 20190131 | 9/9 | 1. Approve 2018 financial statements and business report 2. Approve the proposal for each common share holder will be entitled to receive a cash of NT$5.0 per share allocated from retain earnings 3.Approve 2019 business plan 4.Approve 2019 Capex |
| 20190503 | 9/9 | Report 2019 Q1 financial statements to the board of directors |
| 20190516 | 9/9 | Approve the EX-dividend date |
| 20190801 | 9/9 | 1. Report 2019 Q2 financial statements to the board of directors 2. Approve change of Internal Audit Officer |
| 20191031 | 9/9 | 1. Report 2019 Q3 financial statements to the board of directors 2. Approve 2020 audit plan 3. Approve 2020 business plan 4. Approve 2020 Capex |
| 20191205 | 9/9 | Strategy Report |
| Date | Ratio of Attendance | Major Resolutions |
|---|---|---|
| 20180201 | 9/9 | 1. Approve 2017 financial statements and business report 2. Approve the proposal for each common share holder will be entitled to receive a cash of NT$5.0 per share allocated from retain earnings |
| 20180503 | 9/9 | 1. Report 2018 Q1 financial statements to the board of directors 2. Approve revised 2018 Capex |
| 20180517 | 9/9 | Approve the EX-dividend date |
| 20180802 | 9/9 | 1. Report 2018 Q2 financial statements to the board of directors 2. Approve revised 2018 Capex |
| 20181101 | 9/9 | 1. Report 2018 Q3 financial statements to the board of directors 2. Approve 2019 audit plan |
| 20181206 | 9/9 | Strategy Report |
Independent Director
According to the relevant regulations, the election of Directors is conducted under the "candidate nomination system". The Directors shall be elected from the nominated candidates. The qualification of the nominated Directors (including Independent Directors) has been reviewed by the Board meeting on Feb 2, 2023. The tenure of newly elected directors shall commence on May 18, 2023 and expire on May 17, 2026.
After the election, all of the Company’s independent directors having served their independent-directorship for less than three consecutive terms.
The results of the election of Independent Directors in 2023/05/18 shareholders' meeting :
| Title | Name | Votes Received |
|---|---|---|
| Independent Director | Ho-Min Chen | 87,904,231 |
| Independent Director | Kenneth Kin | 87,889,346 |
| Independent Director | Jesse Ding | 87,880,002 |
| Independent Director | Cheng-Wen Wu | 87,867,916 |
| Independent Director | Huang, Tsui-Hui | 87,851,768 |
Communication between Audit Committee Chair, Independent Directors and Internal Audit
The internal audit controller regularly reports to Audit Committee at the quarterly meetings on the implementation status of internal audit plans, important findings, and the implementation status of previously suggested improvement items, and interacts face-to-face with independent directors. The internal audit controller also reports to and communicates with independent directors on essential issues every month through a written monthly report. The important content of the communication and interaction between independent directors and internal audit controller in Audit Committee is recorded in Audit Committee meeting minutes. In addition, emails are used for the communication on audits and other matters in relation to Audit Committee’s duties among independent directors and between the internal audit controller and Audit Committee members. The Audit Committee’s convener has maintained good communication with independent directors and the internal audit controller.
| Date | Type of Communication | Communication Items, Independent Directors |
|---|---|---|
| 2022/1/26 | The 7th Session of 5th Audit Committee Meeting | 1. The audit controller made a report on 2021 Quarter-4 audit items, results, and follow-up improvements. This quarter's audit focused on salary and contract management; independent directors agreed on the report content. 2. The audit controller made a report on the content of 2021 Statement of Internal Control System, and explained the risks and the results of internal control self-evaluation, to which no independent directors had objection, and thus the statement was submitted to the Board for resolution. |
| 2022/4/28 | The 8th Session of 5th Audit Committee Meeting | The audit controller made a report on 2022 Quarter-1 audit items, results, and follow-up improvements. This quarter's audit focused on sales cycle and inventory management; independent directors agreed on the report content. |
| 2022/7/7 | Telephone conference | The audit controller made a report on the recent important audit findings and held discussion about important internal policies and related procedures . |
| 2022/7/28 | The 9th Session of 5th Audit Committee Meeting | The audit controller made a report on 2022 Quarter-2 audit items, results, and follow-up improvements. This quarter's audit focused on information security inspection; independent directors agreed on the report content, and suggested that the audit findings should be carefully reviewed. |
| 2022/10/27 | The 10th Session of 5th Audit Committee Meeting | 1. The audit controller made a report on 2022 Quarter-3 audit items, results, and follow-up improvements. This quarter's audit focused on information security and subsidiary audits; independent directors agreed on the report content. 2. The audit controller made a report on the completeness evaluation of the Company's internal control system; independent directors agreed on the report content. 3. The audit controller proposed the 2023 audit plans developed based on risk assessment results, on which all independent directors agreed, and thus the plan was submitted to the Board for approval. |
CPAs also attend the quarterly Audit Committee meetings, and communicate and interact with independent directors on financial statement reviews or audits, or issues related to finance, taxation or internal control. Important content of the communication and interaction between independent directors and the financial controller, accounting controller, internal audit controller and attesting CPAs at Audit Committee meetings is also recorded in the Audit Committee minutes.
The communication between independent directors and CPAs in 2021 is listed in the table below:
| Date | Type of Communication | Communication Items, Independent Directors |
|---|---|---|
| 2022/1/26 | The 7th Session of 5th Audit Committee Meeting | 1. Inquiry about results of consolidated and individual financial statements audits. 2. Inquiry about whether there were other audit findings in the key audit items of the financial statements. 3. Inquiry about CPAs' assessment of and advice for other discussion items. |
| 2022/4/28 | The 8th Session of 5th Audit Committee Meeting | 1. Providing consolidated financial statements review results. 2. Inquiry and discussion about issues and practice related to legal updates. |
| 2022/7/28 | The 9th Session of 5th Audit Committee Meeting | 1. Inquiry about consolidated financial statements review results. 2. Inquiry and discussion about issues and practice related to legal updates. |
| 2022/10/27 | The 10th Session of 5th Audit Committee Meeting | 1. Inquiry about consolidated financial statements review results. 2. Inquiry about this year's scheduled key audit items and evaluations. 3. Inquiry and discussion about issues and practice related to legal updates. |