Rules for Performance Evaluation of Board of Directors
The company has set up "Rules for Performance Evaluation of Board of Directors " to conduct internal performance evaluations for the Board of Directors (including functional committees) periodically (at least once a year). The performance evaluation shall be conducted by an external independent professional institution or external experts and scholars at least once every three years.
Internal Performance Evaluation
The company conducts internal performance evaluations annually for the Board of Directors. The evaluations are carried out by members of the Board of Directors, members of the functional committees, and the executing units. Performance evaluation items:
I- Performance evaluation of board of directors
(1) Level of participation in company operations
(2) Quality of Board decisions
(3) Board composition and structure
(4) Appointment of directors and their continuing education
(5) Internal controls
II- Individual evaluation of Board members
(1) Understanding of company targets and missions
(2) Understanding of the director's role and responsibilities
(3) Level of participation in company operations
(4) Internal relationship management and communication
(5) Director's specialty and continued development
(6) Internal controls
In 2023, the self-assessment of Board of Directors, functional committees (including Audit Committee and Remuneration Committee) has"fair" level. The result was reported to the Board of Directors on March 12, 2024.
External Performance Evaluation
In 2023, the company commissioned the Taiwan Institute of Ethical Business and Forensics (TIEBF) to conduct the performance evaluation of the board of directors for the year 2023. The agency appointed three evaluation experts to evaluate four major aspects, including the professional competence, decision-making effectiveness, internal controls, and sustainable operation of the Board of Directors. The evaluation was performed using questionnaires and on-site inspections to assess the effectiveness of the board of directors. The organization and the executive experts are independent of the company, and have no business relationship with the company. The evaluation result was reported to the board of directors on March 12, 2024.
The organization’s overall evaluation, recommendations, and Company’s Status of implementation:
I- Overall evaluation
(1) Board of Director’s Professional Competence and Decision-Making Effectiveness:
Many directors, including the chairman are founders. The backgrounds of independent directors include electrical engineering, finance and accounting, and law. Independent directors can provide different suggestions from different perspectives.
(2) Decision-Making Effectiveness:
Board members all stated that there are opportunities for discussion at board meetings, and if there were major issues, the chairman and chief financial officer will personally communicate. For directors who are not involved in the company's operations, the management team will present reports at the board meeting to confirm that each member understanding of the company's operation and industry situation.
(3) Internal Controls
The Board of Directors has established the "Risk Management Committee" to be the organization for risk management. Each department carries out the identification and assessment of risks in all aspects and then reports to the Risk Management Committee. The internal auditor regularly reports to the independent directors to ensure that the Board of Directors can effectively receive the company's overall operational information and risks, and supervise the implementation of the company's internal controls.
(4) Attitude towards social responsibility
Except complying with legal requirements, the company is also actively participating in community activities. By establishing the sustainable development team, the company set up different goals and implement them, hoping to deepen the implementation of social responsibility and pursue sustainable business goals.
II- Recommendations
(1) Pay attention to the tenure of independent directors and issues related to diversity:
According to the requirements of the Financial Supervisory Commission, from 2024, the tenure of half of the independent directors of listed companies must not exceed three terms. There are three independent directors among the four independent directors have served more than three terms. TIEBF recommendated the company to elect new independent directors in next election run.
Reply: The company has took the recommendations into consideration.
(2) Enhance the recording of board meeting minutes
(2.1) In order to review past decision-making experiences, TIEBF recommended that the summary of opinions and responses from meetings (including pre-meetings discussions between the Principal Accounting Officer and Principal Internal Auditor) be recorded in formal meetings. it is helpful to use past decision-making experiences for future decision-making.
(2.2) TIEBF recommended to report the implementation status of past major proposals in the board meetings. By taking the actions, the directors can be kept up and trace.
Reply: The company will gradually implement the suggestions in the future.
(3) Continously Review the Employee Reward Mechanism. Cultivation and Development for manpower are an indispensable part and important value of sustainable operation of enterprises. When interviewing, directors said that the company has set up the standards for measuring employee's performance. But the company still facing challenges in recruiting and retaining employees with external environment. TIEBF recommended that the company regularly reviewed the performance evaluation standards to make the standards closer to the actual needs of the company, and seek advice from consultants appropriately to formulate more detailed and clear operating standards.
Reply: The company has took the recommendations into consideration.
(4) Increase the discussion of sustainable development issues
(4.1) Based on the responses to the directors' questionnaires and interviews, all directors have recognized the importance of sustainable development issues. The company has the need to promote and develop about this aspect. In addition, the solar business of the company is related to environmental and energy issues. the company has reviewed all issues and identified potential risks. Meanwhile, the company has found out 16 implementation goals relating to the environment, corporate governance, suppliers, and employees.TIEBF recommended the boards of directors can conduct more in-depth discussions.
(4.2)考量近年企業社會責任內涵愈趨深化與多元，受評企業在思考推行其企業社會責任之相關政策上，除了現有已落實的政策，可持續朝向更多元發展。受評企業除可增加環境、人權，與利害關係人等有關之永續發展議題在董事會會議中之討論外，未來可持續參考外部顧問所提供之建議，以利受評企業針對環境、永續以及公司治理等議題能有更多元化的創新思考。此外，除了遵循主管機關命令及客戶要求外，受評企業亦可考慮提早配合主管機關政策要求，編製中、英文版永續報告書，以利投資人掌握相關資訊。
公司回應：已著手編制永續報告書。
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