Audit and Corporate Governance Committee
The Audit Committee has been set up since 2008, and the latest-term committee was formed in 2023 by five new independent directors. This Committee is taking the responsibility for carrying out the fair representation of the Company's financial statements, appointment or dismissal of attesting CPAs and evaluation of CPAs’ independence and performance, effective implementation of the Company’s internal control, the Company's compliance with relevant laws and regulations, control and management of existing or latent risks, etc.
In 2024, the Company incorporated the topics of “Corporate Governance or Sustainable Development” of the 11round Corporate Governance Evaluation Indicators 2.14 into the duties of the Audit and Corporate Governance Committee and revised its organizational regulations to include corporate governance related issues in the supervision matters. The Audit and Corporate Governance Committee was renamed as the “Audit and Corporate Governance Committee” from then on.
The Audit and Corporate Governance Committee meets regularly each quarter. The Committee is empowered by its Charter to conduct any study or investigation it deems appropriate to fulfill its responsibilities. It can invite the Company's management team, internal auditors, the Company's independent external auditors, and all employees of the Company to join the meeting. The Audit and Corporate Governance Committee held six meetings during 2024, the in-person attendance rate of all members was 93%.
In order to improve the effectiveness of the Audit and Corporate Governance Committees and implement the corporate governance, the Committee examined its overall effectiveness in 2024 based on the self-evaluation questionnaire. That is, each director conducted an independent and objective evaluation of the effectiveness of the overall Audit and Corporate Governance Committee in relation to the following five aspects: participation degree in the Company’s operations, awareness of committee responsibilities, decision-making quality, committee’s composition and the selection/appointment of its members, internal control, etc. In 2024, the Company’s Audit and Corporate Governance Committee received a rating of “Excellent” in its internal assessment. Compared to 2023, performance in the self-assessment in all aspects showed improvement.
Five independent directors are selected at the Company’s Regular Shareholders’ Meeting to form the Audit and Corporate Governance Committee. Since Dr. Cheng-Wen Wu resigned on 2024/05/15 because he will become Minister of NFCT, so current Audit and Corporate Governance Committee members are four independent directors. To fulfill the purpose of supervision matters, the primary duties of the Audit and Corporate Governance Committee are classified as follows:
-The existing duties of the Audit Committee:
• Stipulation or amendment of internal control system in accordance with Article 14-1 of the Securities and Exchange Act
• Appraisal of internal control system effectiveness
The Audit and Corporate Governance Committee evaluates the effectiveness of the Company's internal control system, including approval authority, completeness, risk management, etc. (the scope includes but not limited to finance, operations, research and development, information security, legal compliance, and operations in relation to all stakeholders), and reviews the results of internal audits and attesting CPAs’ work. In addition to regular reports made by managerial officer, for matters of high operational risks, relevant controllers/officers are also requested to make reports on the improvement status. The above content is stipulated based on the Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. The Audit and Corporate Governance Committee deemed that the Company's risk management and internal control systems were effective, and the Company had adopted necessary control mechanisms to supervise and correct noncompliance or weaknesses with opportunities for improvement.
• Formulate or revise the handling procedures for the acquisition or disposal of assets, engagement in derivative transactions, loaning of funds to others, provisions of endorsement or guarantee to others, and other significant financial or business actions in accordance with the provisions in Article 36-1 of the Securities and Exchange Act.
• Matters involving the personal interest of directors.
• Transactions on material assets or derivative commodities.
• Material monetary loan, endorsement, or provision of guarantee.
• The offer, issuance or private placement of securities of equity nature.
• The appointment, discharge or remuneration of certified public accountants.
• The appointment and discharge of the head of finance, accounting, or internal audit.
• The annual financial statements signed or stamped by the chairman, managerial officers and accounting controller and the quarterly financial statements signed or stamped by the chairman, managerial officers and accounting controller, and reviewed by CPAs.
• Business report, proposal for profit distribution or loss make-up.
• Other significant matters stipulated by the Company or competent authorities.
-The duties related to corporate governance
• Regularly supervise the operation of corporate governance and understand the discrepancy between operation and practice
• To supervise the implementation of Integrity Operating Procedures and Ethical Practice Code.
• Regularly review the important regulations, such as the Articles of Incorporation, the Rules and Procedures of Shareholders' Meeting, and the Rules and Procedures of Board of Directors' Meeting.
• To establish and periodical review the director training plans.
• Other matters as instructed by the Board of Directors.
Compensation Committee
GUC's Compensation Committee is formed by all independent directors (now four in total). The Committee holds at least one meeting per quarter, taking the responsibility for the formulation and regular evaluation of the Company's overall compensation policy; formulation and regular review (at least once a year) of the policy, system, standards and structure in relation to directors' and managerial officers' performance evaluation and compensation, regular evaluation and determination of the compensation for directors and managerial officers, employee stock option plan and employee bonus plan or other employee incentive plans.
Four independent directors form current Compensation Committee (Dr. Cheng-Wen Wu resigned on 2024/05/15 because he will become Minister of NFCT). The Compensation Committee met four times in 2024: 1/31, 4/25, 7/25, and 10/31.
Matters discussed included:
I. Reports on employee compensation
II. Yearly reward (profit-sharing) totals
III. Employee reward proposal
IV. Management salaries, compensation, and long-term incentive scheme
V. Chief internal auditor salary and compensation
VI. Director remuneration and compensation
VII. Discussion of director and management salary and compensation policy, system, structure, and standards
The Compensation Committee reviewed and approved of all matters listed above.
The self-evaluation measures have also been included in Compensation Committee’s performance evaluation since October 2022. In 2024, the Company’s Compensation Committee received a rating of “Excellent” in its self-assessment.
Strategy and Sustainable Development Committee
The Company established a Strategy Committee in 2022. The first Strategy Committee consisted of all the independent directors; their term of service was from October 27, 2022 to May 18, 2023. The first Strategy Committee meeting was held on December 1, 2022, to discuss the Company’s future operating strategy and policy. All members of the Committee participated in this meeting. The Committee provided many suggestions and guidance on the operational policy reported by the Company's management team. The Committee asked the management questions such as what should be done (or not be done) in terms of the Company's strategic direction, business strategy as well as each functional unit’s strategic implementation. The Committee also asked that each functional unit formulate feasible, measurable milestones to form a complete functional strategy loop. It was also decided in the first Strategy Committee meeting that the meetings shall be held at least twice a year. Within the scope of Committee’s scope of authority, management, experts, and other people may be invited to attend the meetings to provide relevant information.
In the second Strategy Committee, the members were changed to comprise of all directors, with a term of service from May 18, 2023 to May 17, 2026 and with Kenneth Kin, independent director, serving as the Committee convener. Kenneth Kin is well experienced in the industry. He has been in charge of Asia-Pacific operations for Convex Computer in the US, and has been the head of Motorola’s Computer Group. Later, he served as the Vice President of IBM’s Microelectronics Global Business and Services Department. In 2001, he was hired as Senior Vice President of TSMC’s Global Business and Marketing Department, where he was responsible for global business and services. In addition to his work experience, he has also served as a Director of the Massachusetts High Technology Council, and at National Tsing Hua University, where he was the Deputy Dean of the College of Technology Management and director of the EMBA program. He is a leader in the technology industry, with both industry and academic experience.
In 2024, sustainable development was added the Strategy Committee’s list of responsibilities. The committee was hence renamed the "Strategy and Sustainable Development Committee" with a mission to strengthen the evaluation and response measures for risks related to environmental, social, and corporate governance aspects, helping the company achieve sustainable business goals. In the context of responding to changes in international affairs and market changes, the committee will pay special attention to risk factors related to global trends and actively engage in close communication and collaboration with stakeholders, including shareholders/investors, employees, suppliers, customers, industry-government-academia-research organizations, and the general public, to ensure the feasibility and sustainability of the company’s strategies.
The Committee’s scope of authority includes planning and guidance on the following matters:
- The company’s growth strategy, including short-, medium- and long-term development goals and strategies.
- Major investment and M&A plans.
- Risk management issues.
- Formulate the direction, strategies, and goals for corporate sustainability development. Develop related management policies and specific implementation plans.
- Track the implementation and effectiveness of corporate sustainability development.
- Oversee sustainability information disclosure matters and review the sustainability report.
- Decide on other important strategic and sustainability development issues.