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Taiflex approved the amended "Guidelines for Performance Evaluation of the Board of Directors" in the Board meeting on October 27, 2021 for corporate governance purpose. An internal performance assessment on the Board would be carried out at least once every year to enhance the Board functions as well as its operation efficiency by clearly defining the performance targets.

Formulation and execution of the performance evaluations cover evaluations on the Board as a whole, individual Board members and functional committees. At the end of each year, the designated unit responsible for Board meetings would gather information pertaining to Board activities, distribute the "Self-assessment Questionnaire for Board Members" and the "Self-assessment Questionnaire for Performance of Functional Committee" to Directors and Committee members, and assign scores to assessment items based on the actual operation of the Board. The outcomes would then be summarized and reported to the Board.

Details of the 2024 Board performance evaluation are as follows:

Evaluation Type Evaluation Method Grading Standard Outcome
Performance evaluation of the Board as a whole Evaluation by the designated unit based on the actual operation of the Board The evaluation covered the following five aspects:
  • Level of participation in corporate operation
  • Enhancement on the quality of Board decisions
  • Composition and structure of the Board
  • Election and continuing education of Directors
  • Internal control
 The overall result achieved high distinction, scoring 91.21. The outcome demonstrated that the operation of the Board as a whole was sound and in compliance with the spirit of corporate governance.
Performance evaluation of individual Board members Self-evaluation by Board members The evaluation covered the following six aspects:
  • Command over corporate goals and missions
  • Understanding of Directors’ duties
  • Level of participation in corporate operation
  • Internal relationship management and communication
  • Professional competence and continuing education of Directors
  • Internal control
 The overall result achieved high distinction, scoring 98.24 on average. The outcome demonstrated that Directors gave positive reviews on the efficiency and effectiveness of operation under each indicator.
Performance evaluation of functional committees Self-evaluation by functional committee members The evaluation covered the following five aspects:
  • Level of participation in corporate operation
  • Understanding of functional committees’ duties
  • Enhancement on the quality of functional committees’ decisions
  • Composition of the functional committees and election of members
  • Internal control
 The overall results achieved high distinction, scoring 97.31, 96.96 and 94.27 on average for the Compensation Committee, the Audit Committee and the Sustainable Development Committee, respectively. The outcome demonstrated that functional committee members gave positive reviews on the efficiency and effectiveness of operation under each indicator.

Details and recommendations of the aforementioned evaluation were reported in the Board meeting in January 2025.

External Board performance evaluation

In November 2022, Taiflex engaged Taiwan Corporate Governance Association (TCGA) to conduct the 2022 Board efficiency (including performance) evaluation for the period of October 1, 2021 to September 30, 2022. The evaluation covered eight aspects including the composition, guidance, authorization, supervision, communication, internal control and risk management, self-discipline and others of the Board. The Chairperson, Vice Chairperson, three Independent Directors, President, Corporate Governance Officer and Audit Officer were to answer ten open-ended questions in the form of a questionnaire and be interviewed by video conference. TCGA had issued the performance evaluation report on November 29, 2022. The organization has no business relationship with Taiflex; thus, its independence is assured. Recommendations from TCGA would serve as reference for continuous enhancement of Board functions and were reported along with action plans in the Board meeting on January 11, 2023. General comments and action plans are as follows:

General comments in the evaluation report
  • The Chairperson adopts open leadership, values strategic decision-making as well as business supervision, and welcomes suggestions and active communications to effectively fulfill his leadership functions, allowing Board members to fully express their opinions. Independent Directors possess the professional competence required and actively carry out their duties. They take part in and promote the formation of strategic targets, fulfilling their functions of guidance and supervision.
  • Taiflex attaches great importance to corporate sustainability. The Company has compiled sustainability reports and created an ESG section on the corporate website, disclosing information pertaining to sustainable developments. In October 2022, its Sustainable Development Center stepped up to become a functional committee, i.e., the Sustainable Development Committee. This demonstration of the Company's resolution in fulfilling its sustainable responsibilities shall be recognized.
  • Taiflex cares about talent cultivation and succession plans. It has introduced Mckinsey's Health of Organization mechanism for talent review and successor selection.
  • Taiflex has created the position of Corporate Governance Officer. It also provides Board members with diverse lectures and continuing education to assist Directors in performing their duties and regulatory compliance, thereby enhancing their functions. In addition to completing the internal self-assessment on Board performance every year, the Company has twice engaged an independent professional institution to conduct external evaluations, aggressively improving its overall corporate governance system and culture. As a result, the Company's ranking surges from top 21% - 35% in the previous Corporate Governance Evaluation to 6% - 20% in the 8th Corporate Governance Evaluation.
Recommendations from the evaluation report and action plans
Item Recommendation Action Plan
1 Your company attaches great importance to communications with stakeholders and has created several email accounts (including for investor relations) to serve the purpose. TCGA recommends a strengthening of the whistleblowing mechanism by increasing direct involvement of Independent Directors (e.g., set up channels designated for direct communications with Independent Directors at the corporate website or adjust the existing channels so that Independent Directors can receive the reporting of misconducts simultaneously). Furthermore, TCGA recommends the Corporate Governance Officer to summarize stakeholder opinions and report to the Board periodically.
  • The Company will formulate whistleblowing rules and create email accounts for external reporting of misconduct. Where the incidence involves Directors or senior executives, Independent Directors would be assigned to receive the emails. The whistleblowing categories and corresponding standard investigation procedures would also be established.
  • At present, opinions of stakeholders are reported to the Board on a yearly basis. The reporting frequency will be increased in the future.
2 The Board has recently approved the “Risk Management Policies and Procedures”. TCGA recommends the creation of a dedicated risk management manager in charge of establishing an integrated enterprise risk management framework. The manager shall formulate management policies covering mechanisms such as organizational structure, risk ownership and management objectives and procedures for each risk besides implementing controls over business, strategic, financial, information security and climate change risks. He/she shall then report the implementation status to the Audit Committee and the Board for the latter to supervise the Company's risk controls more efficiently. The “Corporate Governance and Risk Management” Task Force under the Sustainable Development Committee is scheduled to convene regular meetings while management in different levels of organization assist with risk factor identification and risk response strategies as well as propose relevant risk assessments, draft countermeasures and perform reviews in the meetings. The implementation status of risk management is then reported to the Sustainable Development Committee which supervises the execution of improvement mechanisms and regularly reports the implementation status of risk management to the Board.