8.1.1 Structure and Operations of the Board of Directors
The Company's Board of Director is the highest-ranking governance unit of the Company. It directs company strategies, supervises the management, and bears responsibility to the Company and shareholders.
The procedures and arrangements of its corporate governance system shall ensure that, in exercising its authority, the Board of Directors complies with laws, regulations, the Articles of Incorporation, and the resolutions of the shareholders' meetings. According to the "VisEra Technologies Company Ltd. Articles of Incorporation", the Company shall have five to seven directors, who shall be elected by the shareholders'meeting from persons of adequate capacity to serve a term of three years. Their terms of service may be renewed if they are re-elected in the following election.
The Company currently has 7 Directors (one Independent Directors was elected by the shareholders'meeting in 2023). To maintain the independence of the Board of Directors, the Company has 4 Independent Directors who account for over one half of all Directors. Each Independent Director meets the requirements in the "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies" and there are no relations of spouses or relatives within the second degree of kinship between Directors, which meet requirements in Article 26-3, Paragraphs 3 and 4 of the Securities and Exchange Act. The Company set up the Audit Committee and Compensation Committee under the management of the Board of Directors and set up bylaws for them to implement official business.
The Company's 8th Board of Directors convened 4 meetings in 2023 and the average attendance rate of Directors was 100%.
The Company's Chairman is responsible for business judgments, business management, crisis management, international market perspectives, and demonstrating leadership and decision-making abilities to continuously adjust the Company's business strategies based on market changes. The Chairman determines the company's annual budget, final accounts, profit distribution plan, and loss make-up plan to ensure the Company's sustainable and healthy development and implementation of other plans. He is also accountable to the Board of Directors and organizes the implementation of the Board's resolutions and regulations to meet the targets set by the board and report the progress to the board.
The Company also created the position of the President to take charge of the Company's business, marketing, R&D, production, and other operation management tasks. The President organizes and implements the Company's annual business plan and investment plan to supervise operations. The two roles support each other to implement tiered management and increase overall business efficiency
Although the Company's Chairman Kuan Hsin has served concurrently as the President after the former President retired on August 31, 2022, since the Company already specified the authorization and duties of the Chairman and the President in the Articles of Incorporation and except for the Chairman, the other six Directors are not employed by the Company, which means that more than half of the Directors are not employees or managers of the Company and more than half of the Directors are Independent Directors who can supervise the management of the Company in an independent and impartial manner with real independence, what is more, Independent Directors also serve as the members of the functional committees and they fully discuss important issues before proposing recommendations to the Board of Directors to implement corporate governance and demonstrate overall business performance, The Board of Directors and the management retain complete independence from each other.
To purpose of organizing the Audit Committee is to assist The Board of Directors to increase the performance of corporate governance, four Independent Directors serve as the member of such committee, their main duty includes: appointing and the dismissal of Certified Public Account (CPA) and its independence and performance, the appropriate presentation of financial statements, the control of existing or potential company risks, the supervision of the effective implementation of internal control, etc. The Audit Committee convenes quarterly and within its authority, it may invite the management, the internal auditor, the CPA appointed by the Company or others to sit in the meeting and provide relevant information. The head of the internal auditor reports to the Audit Committee periodically about annual internal audit plans and the review of defects of internal control systems. The report is make into records to keep track, to make improvements and are reported to The Bord of Directors. The CPA also reports in the Audit Committee about the audit and review findings of quarterly financial statements and other communication topics requested by law. It also reports to the Audit Committee under extraordinary circumstances. In 2023, the Audit Committee convened 4 times with the head of the internal auditor, 4 times with the CPA. Overall, the communications among Independent Directors, the head of the internal auditor and the CPA are well.
Liability insurance is taken out by VisEra to cover the liability of its Directors and managers and to give them courage and make them have nothing to worry about when carrying out their tasks.
8.1.2 Diversity of the Board of Directors
According to the regulations in the "Corporate Governance Best Practice Principles" and the "Regulations for Election of Directors", board members must retain as a whole the knowledge, skills, and literacy required for executing their duties. The Company seeks to fulfill the ideals of corporate governance and requires members of the Board of Directors as a whole to possess eight major skills including business judgments, accounting and financial analysis, business management, crisis management, industry knowledge, international market perspective, leadership, and decisionmaking.
註：董事會多元化情形說明，請參閱112 年股東會年報 / 參、公司治理報告 / 二、董事、監察人、總經理、副總經理、協理各部門及分支機構主管資料。
All Directors of VisEra are Taiwanese nationals and only one Director is an employee. The Company also supports gender equality. Of the 7 Directors, 3 are female and they account for 43% of the Directors. In terms of the age distribution, 3 Directors are aged 51-60, 3 Directors are aged 61-70, and 1 Director is aged over 71. The gender and age distribution remained balanced. The diversification of the Company's board members is shown in the table below:
Note: The percentage of female Directors=(The number of Female Directors at the end of the year/ The number of Directors at the end of the year) *100％; The percentage of male Directors=(The number of male Directors at the end of the year/ The number of Directors at the end of the year) *100％, using rounding method to calculate.
The Percentage Distribution of the Gender of Directors
The Percentage Distribution of the Age of Directors
8.1.3 Board Performance and Performance Evaluation
The Company established the performance evaluation system for the Board of Directors and passed the "Board of Directors Performance Evaluation Guidelines" on June 22, 2021 to increase the functions of the Company's Board of Directors and enhance the efficiency of operations. The scope of the evaluation covers the performance evaluation of the board as a whole, individual director, and functional committees. The performance evaluation methods include self-evaluation of the Board of Directors, self-evaluation of the Directors, peer evaluation, appointment of external professional institutions or experts, or other appropriate methods. The internal performance evaluation of the Board of Directors shall be conducted once every year. The Company shall appoint an external professional independent institution or a team of external experts and scholars to conduct an external performance evaluation of the Board of Directors at least once every three years. The performance evaluations of the Board of Directors shall be completed before the end of the first quarter in the following year. The implementation and results of the performance evaluation of the Board of Directors shall be reported to a board meeting in the first quarter of each year and used as the basis for determining the salary and remuneration or the selection or nomination of Directors.
The Company completed the self-evaluation of all Directors for the 2023 board performance evaluation in January 2024 in accordance with the "Board of Directors Performance Evaluation Guidelines" and received 18 valid responses. The results included the board performance evaluation, performance evaluation of the members of the Board of Directors, and the performance evaluation of the functional committees. The evaluation results are as follows:
Overall board performance evaluation
Note: For the exact scores of the overall board performance evaluation, please refer to VisEra’s official website/Coporate Governance/ Performance Evaluation of Boards and Directors.
All Directors evaluated the “overall performance of the board” in five evaluation categories. The average scores for all categories was 4.86 to 4.93 and the overall average score was 4.88, the score is higher thanthe score of last year in every aspect, which demonstrated that the overall board operations remained sound. This year, with regard to the newly added indicator “the board’s involvement in and enforcement of ESG, the average scores was 4.71. We will continue to improve the board’s involvement in the Compnay’s sustainability related issues.
Performance Evaluation of Directors
Individual Directors conducted self-review and evaluations in six evaluation categories. The average score was 4.93 to 5 and the total average score was 4.96, which demonstrated that individual Directors have a firm grasp on their duties and participated in the board meetings.
Note: For the exact scores of each Individual Director, please refer to Annual Report of 2023, Chapter 4 Coporate Governance Reports.
Performance Evaluation of Functional Committees
Independent Directors conducted self-review and evaluations in five evaluation categories. The average score for all categories was 4.88 to 5 and the total average score was 4.97, which demonstrated that the Independent Directors have performed well in terms of the recognition of their duties and the quality of their decisions in both the Audit Committee and the Compensation Committee.
Note: For the exact scores of each Functional Committee, please refer to Annual Report of 2023, Chapter 4 Coporate Governance Reports.
To strengthen the functions of Directors, enhance the quality of supervision, and keep up with key trends such as corporate governance and sustainable development, VisEra notifies Directors to attend professional knowledge development courses organized by relevant institutions from time to time. The content covers corporate sustainability, artificial intelligence, tax governance, information security, etc. In 2023, all Directors attended the legally required number of hours for continuing education and met the requirements in the "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies". The continuing education information is as follows:
8.1.4 Conflicts of Interest
VisEra implements numerous procedures to avoid conflicts of interest. When a Director or manager engages in acts within the scope of the Company's business for himself/herself or for others, he/she shall obtain prior approval from the shareholders' meeting or the Board of Directors, respectively, in accordance with the law. Each Director and manager must complete an annual related party transaction statement and report the results to the Audit Committee. In addition, the Company discloses related party transactions in the financial statements in accordance with the rigorous reporting requirements in the laws and regulations of the Republic of China.
8.1.5 Compensation Policy for Directors and Managers
The salary and compensation for the Company's Directors and managers are determined by the Compensation Committee in its regular evaluations based on the Compensation Committee Charter.The performance evaluation and the salary and remuneration of the Directors and managers are based on prevailing rates of the industry as well as their individual performance, the Company's overall performance, and reasonable assessments of future risks. In the future, in consideration of the Directors’annual performance evaluation related to ESG, we will introduce the system of the link between compensation and performance evaluation related to ESG into the compensation policy.
The managers' remuneration includes fixed salary and performance-based floating salary. The performance evaluation includes financial indicators as well as ESG indicators. They include environmental targets such as energy management (e.g., quantity of electricity saved), water resources (e.g., process water recycling rate), and waste management (e.g., waste chemical recycling rate); economic targets such as information security (e.g., information security accidents), innovation management (e.g., patents), and customer service and management (e.g., customer satisfaction); social targets such as talent attraction and retention (e.g., turnover rate) and environmental safety and health (e.g., number of occupational safety accidents).
According to the Company's Articles of Incorporation, before the Company distributes earnings, it shall set aside no more than 2% of the profit from the period of distribution as remuneration for Directors and no less than 1% as remuneration for employees. However, if the Company has accumulated losses, the Company shall set aside a part of the profit to make up for the losses. The distribution of employee remuneration shall be resolved by a majority vote at a board meeting attended by more than two thirds of the Directors and it shall be reported at the shareholders' meeting. After the allocation, the Board of Directors shall draft an earnings distribution proposal regarding the remainder of the earnings as well as accumulated undistributed earnings for the shareholders' meeting to approve the distribution of dividends and bonuses.
Please refer to the Company's annual report for the remuneration for the Directors, President, and Vice Presidents, the names of managers who received the employees' remuneration, and the distribution status.
All severance pay and pension were paid in accordance with laws and the conditions were the same as those of other employees. Currently, we do not link ESG performance evaluation to a manager’s compensation. However, we will continue to focus on this issue and refer to good examples of other companies and wait till the enformancement of ESG has ripened to further discuss on relevant evaluation methods.
8.1.6 Conrete Results of Corporate Governance
VisEra appointed the head of legal affairs at the board meeting in the third quarter of 2021 and organized the interdepartment coporate governenace task force to review if evaluation indicators were reached by department respectively. Year 2023 is our first year to attend the Corporate Governance Evaluation and we got to rank in the top 6%-20% of all listed companies.