The Board of Directors is the highest governance body of Taiflex, consisting of nine Directors with extensive industry experience. The Board is chaired by the Chairperson who is not a member of the management team. Lead by the Chairperson's governance philosophy, the Board upholds the core values of “devotion, integrity, diversity and independence” and is responsible for overseeing the Company's regulatory compliance, financial transparency, prompt disclosure of important information, and elimination of internal corruption.
The Company convenes shareholders’ meeting every year and holds regular Director election in accordance with the “Director Election Procedures.”
The Company has established the “Code of Practice for Corporate Governance” to ensure the Board's governance capability, and the diversity policy is stipulated in the “Strengthen the Board’s Functions” section. The policy requires Board members to possess eight key abilities, i.e., operational judgment, accounting and financial analysis, business management, crisis management, industrial knowledge, global market perspective, leadership and decision-making. The expertise of current Board members covers global perspectives, regional management capabilities, financial management, copper manufacturing, polymer chemical engineering and international business, which shapes a well-structured Board.
For corporate governance transparency, the Chairperson of Taiflex would not concurrently serve as the President in principle. If such a situation arises, it would only be a temporary arrangement for a transition period not exceeding six months.
The three Independent Directors account for one-third of the total number of Directors in the Board, which is in compliance with the law. Upon assessment, all Directors have met the independence criteria. Circumstances set forth in Paragraphs 3 and 4, Article 26-3 of the Securities and Exchange Act do not exist, including situations where Directors are spouses or within seconddegree of kinship to each other.
The Company also assesses the independence of directors, including whether they can consistently raise constructive issues to the management and other directors, whether their views are independent of other directors or management, and whether their actions and behaviors inside and outside the Board are appropriate.
In accordance with the Company's “Rules of Procedure for the Board of Directors’ Meetings,” for agenda items of which the Director or the juridical person the Director represents has a personal interest, the Director shall disclose the major aspects of such personal interest at the current board meeting. If the interest may impair the interest of the Company, the Director shall not participate and shall recuse himself/herself from the discussion and voting of the agenda items. Such Director shall not exercise voting right on behalf of another Director. Directors and managers shall secure approvals from the shareholders’ meeting and the Board in accordance with applicable laws and regulations when they take actions that are within Taiflex's business scope for themselves or on behalf of others and shall fully disclose all transactions with related parties in accordance with the reporting requirements of relevant securities laws. We have verified that there were no incidents of insider trading or corruption involving Board members and senior management of the Company in 2023.
To effectively leverage the functions of the Board and to improve the quality of the Board decisions, the Company has established the Compensation Committee, the Audit Committee and the Sustainable Development Committee under the Board of Directors by duties and functions to address important corporate governance, economic, environmental and social issues. There is also the Internal Auditing Office, an administrative audit unit, which audits and evaluates the reliability and effectiveness of the Company's internal control system, and regularly reports audit findings and makes improvement recommendations to the Audit Committee to facilitate effective operations within the Company.
In 2017, the Company has established the Audit Committee in place of the Supervisors. By leveraging the professional competence and independence of the three Independent Directors, the Company has implemented corporate governance, improved the oversight function and strengthened the management mechanism. The Audit Committee held six meetings.
As for the Compensation Committee, it is composed of three Directors appointed by the Board, including at least two Independent Directors. Its main responsibility is to assess the overall compensation and benefits policies of the Company, as well as the compensation policies and systems of Directors and managers, in a professional and objective manner, and make recommendations to the Board as reference in making decisions.
The Board of Directors is responsible for the appointment, nomination and performance evaluation of senior management. It also delegates authority to senior management to handle economic, environmental and social issues arising from operations. To ensure an effective implementation of strategies, the Board not only receives regular reports from the management team, but also frequently communicates and discusses with the management, urging the management team to make appropriate adjustments. Good communications between the Board and management team are the cornerstone of Taiflex's sustainable operation.
The Board of Directors convenes regular quarterly meetings to review matters reported by functional committees and development strategies proposed by the management team. For all agenda items to be fully understood and discussed, relevant personnel are invited accordingly to attend and report at the Board meetings. The feasibility of each item is properly evaluated by the Board before it can be implemented.
To continuously enhance the Board's professionalism and skills, the Company regularly schedules diverse training courses related to business operations and sustainable development for Directors. Through external education for Directors to understand global trends and diversify their perspectives, we aim to strengthen the Board's leadership and decisionmaking abilities for it to exercise due care of a good administrator when engaging in business operations, and ultimately maximizing shareholder returns and boosting the competitiveness of the Company in the face of the ever-changing business environment.
To implement corporate governance, an internal Board performance evaluation shall be conducted at least once a year pursuant to the “Methods for Evaluating Board of Directors’ Performance.” At the end of each year, the Board agenda unit collects information on Board activities, distributes the “Self-Assessment Questionnaire for Board Members” and the “Self-Assessment Questionnaire for Functional Committees” to each Director and committee members, and reports the evaluation results at the next Board meeting. By clearly defining performance objectives, we aim to enhance the functionality of the Board and strengthen its operational efficiency.
The Company conducts a Board effectiveness evaluation (including performance) once every three years. In 2022, the Company commissioned the professional and independent Taiwan Corporate Governance Association to carry out the evaluation, which encompassed eight aspects of the Board (composition, guidance, authorization, supervision, communication, internal control and risk management, discipline and others), questionnaires with 10 open-ended questions, and online interviews with Board members and senior executives.
