Corporate governance

Implement corporate governance

In OSE, the core value of corporate philosophy is “INTEGRITY, INNOVATION, PROACTIVENESS and EMPATHY”. Implementing corporate integrity and corporate ethics is the key to sustainable corporate governance. It is strengthened through effective corporate governance and board functions. The corporate governance is to continuously create the value of the company; except for the company’s compensation committee to protect employee welfare and maintain the company’s competitiveness, the internal control system to ensure the correctness of the relevant procedures is also an important basis for operational transparency.

Risk management

Risk management policies, procedures and organization

In order to strengthen the effectiveness of corporate governance and improve the company's risk management system, reduce the impact and impact that may have on operations when risks occur, and enhance the company's own resilience in facing risks, the company has formulated "Risk Management Policies and Procedures", which have been approved by the Board of Directors. . A "Risk Management and Sustainability Development Group" has been established under the Corporate Governance and Sustainability Committee to be responsible for the promotion and implementation of the risk management system.

Risk management operations

The company's risk assessment is based on the materiality principle of the sustainability report. Through relevant domestic and foreign laws and regulations, research report reviews, and communication with internal and external stakeholders, we evaluate the risk management of ESG sustainability issues that are significant and require risk management. Projects, the scope of the company's risk management has been assessed to include: "Strategic Risk", "Operational Risk", "Financial Risk", "Information Security Risk", "Legal Compliance Risk", "Integrity Risk" and "Climate Change Risk" .

The management process consists of risk identification and assessment by each risk management order, and the assessment results are submitted to the Risk Management and Sustainable Development Team of the Corporate Governance and Sustainability Committee for summary, and countermeasures are formulated to continuously track and control projects that may cause operational impact. , to control risks within an acceptable range; the Corporate Governance and Sustainability Committee reports the risk management operations to the Board of Directors at least once a year, with the latest report date being October 25, 2023.

Intellectual property management

In an era of rapid development of emerging technologies and high-tech industries, a sound management mechanism can strengthen the protection of intellectual property rights for companies and customers. In addition to managing and protecting its own intellectual property, the Company also prevents infringement of the intellectual property rights of others, in order to achieve transparent and effective corporate governance and reduce the possibility of infringement or disputes. In order to reasonably manage intellectual property risks, an intellectual property management plan linked to operational goals is formulated based on existing intellectual property management.

Implementation of intellectual property management

• Continuously update and strengthen the patent database system to manage patent cases and control processes.

• Strengthen access management and authority control to prevent the leakage of confidential information.

• Conduct business secret protection and information security promotion training for all colleagues in the company to deepen their understanding of the importance of business secrets.

• Organize education and training on basic patent knowledge and patent infringement avoidance to build colleagues’ intellectual property concepts and protection awareness.

Intellectual property management plan

FILENAME LINK
Intellectual Property Management Plan (2021)
Intellectual Property Management Plan (2022)
Intellectual Property Management Plan (2023)

Board of Directors

  • Update Date:2024/06/07

The business philosophy is honesty, integrity, trust and truth. In order to implement this concept and ensure shareholders’ rights, increase the transparency of the company, and abide by the relevant laws and regulations of corporate governance, faithfully implement the business and do its duty to be a good manager.

The board of directors of the company is held at least once a quarter, and the company’s management class reports the operating performance to the board of directors, and the board of directors decides on future operations and major policies.

There are two functional committees under the board of directors, namely the “Remuneration Committee” and the “Audit Committee”. The two functional committees report the resolutions to the board of directors for discussion. Through the review of the functional committee, the board of directors performs its duties and promotes Shareholders’ interests.

Title Name Education/EXPERIENCE
Chairman
Mr. Yueh-Ming Tung
Education: EMBA, National Sun Yat-sen University

Experience: President, Orient Semiconductor Electronics, Ltd.
Director
Chipbond Technology Corporation

Representative: Huoo-wen Gau
Education: Master, Applied Chemistry, National Tsing Hua University

Experience: President, Chipbond Technology Corporation
Director
Mr. Shyh-wey Lo
Education:Accounting, Chung Yuan Christian University

Experience:Senior Vice President of Management Center, Chipbond Technology Corp Ltd.
Independent Director
Mr. Chia-Hua Hsu
Education: Bachelor, Business Management, Tunghai University

Experience: Chairman, Chilin Optoelectronics Co., Ltd.
Independent Director
Mr. Philip Wei
Education: Master of Tax Law Institute, Northrop University, USA

Experience: Chairperson, Fortune Information Systems Corp.
Independent Director
Mr. Chi-Cheng Wu
Education: Doctor of Business (Marketing), National Taiwan University

Experience:Professor, Department of Business Administration, National Sun Yat-sen University
Independent Director
Ms. Fang-Yu Wen
Education: Master of Accounting, College of Management, National Taiwan University

Experience: Accountant, Fang-Yu Wen CPA Firm
Independent Director
Ms. Chien-Hui Hung
Education: Department of Applied Commerce, Taichung Institute of Technology

Experience: Assistant Vice President, Central District Channel Administrative Center, Hua Nan Bank(Retired)

The information of board of directors

Name LINK
Succession planning for board members and important management
Members of Board of Directors and its diversification
Assessment of independence and suitability of external auditors_2023

Annual performance of the Board

The status of Performance Evaluation on the Board of Directors:
On March 27, 2020, the Company adopted the “Procedures for the Board of Director’s Performance Evaluation” in order to implement corporate governance and enhance the functions of the Board of Directors and functional committees, the performance of the Board of Directors is evaluated annually in accordance with the Procedures for the Board of Director’s Performance Evaluation, and the results are reported to the Board Meeting.

Methods and contents of evaluation

(1)The“Questionnaire of Self-Evaluation of Performance of the Board” of the board of directors, which includes the following five aspects:

1. Participation in the operation of the company.

2. Improvement of the quality of the board of directors’ decision making.

3. Composition and structure of the board of directors.

4. Election and continuing education of the directors.

5. Internal Control.

(2)The“Questionnaire of Self-Evaluation of Performance of the Board Members” of the board of directors, which includes the following six aspects:

1.Mastery of company goals and tasks.

2. Awareness of the duties of a director.

3. Participation in the operation of the company.

4. Internal relationship management and communication.

5. The director’s professionalism and continuing education.

6. Internal Control.

(3)The“Questionnaire of Self-Evaluation of Performance of the Functional Committees” of the board of directors, which includes the following five aspects:

1. Participation in the operation of the company.

2. Awareness of the duties of the functional committee.

3. Improvement of quality of decisions made by the functional committee.

4. Makeup of the functional committee and election of its members.

5. Internal Control.

Please refer to【Major Internal Policies – Procedures for the Board of Director’s Performance Evaluation】

Board of Director's Performance Evaluation

YEAR LINK
2023Y
2022Y
2021Y
2020Y

Remuneration Committee

Purpose

To ensure a sound system for compensation of the directors and managerial officers of this Corporation, this Remuneration Committee Charter is adopted pursuant of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter.

Members

There are 3 members in OSE Remuneration Committee, the members composed with professional and independent qualification, the term of 2021/7/29 to 2024/07/14, the attendance record of the Remuneration Committee members was as follows:

Title Name Background

Chairperson

Ching-Tien Tsai

Education:Bachelor, Accounting, National Cheng Kung University
Experience:Certified Public Accountant of Ernst & Young

Member of Committee

Jeng-Ren Chiou

Education:Ph. D., Finance, The City University of New York
Experience:Professor, Department of Accountanc, NCKU

Member of Committee

Cha-Hwa, Hsui

Education:Bachelor of Business Management, Tunghai University
Experience:Chairman, Chilin Optoelectronics Co., LTD.

Operations and Duties:

The Committee shall exercise the care of a good administrator to faithfully perform the following duties and present its recommendations to the board of directors for discussion.

The information of Remuneration Committee

NAME LINK
Organizational Rules of the Salary and Remuneration Committee
Annual work priorities and operations of the Salary and Remuneration Committee in 2022
Annual work priorities and operations of the Salary and Remuneration Committee in 2021

Audit Committee

Purpose

The Audit Committee assists the Board of Directors in performing supervisory duties and is responsible for enforcing the Company Act,the Securities and Exchange Act, the Articles of Association and related laws and regulations.

Members

The Audit committee of the Company consists of three independent directors, all of which meet the qualifications of professional, work experience, independence and the number of independent directors as stipulated in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.

Title Name Background

Chairperson

Cha-Hwa, Hsu

Education:Bachelor of Business Management, Tunghai University
Experience:Chairman, Chilin Optoelectronics Co., LTD.

Member of Committee

Ching-Tien Tsai

Education:Bachelor, Accounting, National Cheng Kung University
Experience:Certified Public Accountant of Ernst & Young

Member of Committee

Jeng-Ren Chiou

Education:Ph. D., Finance, The City University of New York
Experience:-Professor, Department of Accountanc, NCKU

Operations and Duties:

The main function of the Audit Committee is to supervise the following matters:
1.Fair presentation of the financial reports of the Company.
2.The hiring (and dismissal), independence, and performance of certificated public accountants of the Company.
3.The effective implementation of the internal control system of the Company.
4.Compliance with relevant laws and regulations by the Company.
5.Management of the existing or potential risks of the Company.

The Committee meets at least once every quarter . The internal auditors, the independent auditors can contact each other as needed.

The information of Audit Committee

YEAR LINK
2023Y
2022Y
2021Y

Internal Auditor

Internal Auditing Organization & Operation:

OSE’s Internal Audit function is an independent unit that reports directly to the Board of Directors. Besides informing the Board during its ordinary meetings, it briefs the Chairman, and the Board Audit Committee on a quarterly and on as needed basis.

The Internal Auditing Rules and the management of the internal control system should be assist the board of directors and mangers in inspecting and reviewing defects in the internal control systems as well as measuring operational effectiveness and efficiency, and shall make timely recommendations for improvements to ensure the sustained operating effectiveness of the systems and to provide a basis for review and correction. Its scope covers all operational activities and control operations of the company and its subsidiaries.

The majority of the audit work is executed according to an annual plan, which needs to be approved by the Board of Directors. Such plan will take into account risks that have been identified. Special audits or reviews are conducted as needed. The internal audit is based on the company’s established policies, systems, rules and regulations, etc., and the audit and improvement recommendations of the audit plan are implemented, and the audit report and tracking report are prepared.

The company supplements the review activities by Internal Audit with documented self-assessments by the divisions, and improvement of internal deficiency or abnormal matters from every unit; it consolidates the results of the self-assessments for the Board Audit Committee and the Board of Directors.

There are four full time employees dedicated to Internal Audit, including one audit supervisor and three staff members.

The appointment and dismissal of internal auditors:

The appointment or dismissal of Head of Internal Audit shall be approved by Audit Committee and further submitted to the BOD’s Meeting for a resolution. The appointment, dismissal, evaluation and review, salary and compensation of internal auditors were handled according to OSE “Recruiting and Hiring Procedure”, “Employee Promotion Procedure”, “Payroll, Allowance, and Bonus Procedure” and ” Separation and Leave of Absence Procedure”. The evaluation and review of internal auditors are conducted twice a year. Head of Internal Audit report the appointment, dismissal, evaluation and review, salary and compensation of internal auditors for Chairman’s consent.

The Communication between Independent Directors, Internal auditor supervisor and CPAs:

YEAR Link
2023Y
2022Y
2021Y
2020Y
2019Y
2018Y
2017Y

Corporate Governance Officer (CGO)

Pursuant to “Taipei Exchange Directions for Compliance Requirements for the Appointment and Exercise of Powers of the Boards of Directors of TPEx Listed Companies”, OSE has approved the appointment of Shu-Yung, Chu, the Head of Accounting, as Corporate Governance Officer on May 14, 2021 by the Board. Ms. Chu possesses many years of experience at public offering companies engaged in stock affairs, financial, or deliberations management. The main duties include handling of board and shareholders’ meetings in accordance with laws, producing minutes of the board of board and shareholders’ meetings, assistance in onboarding and continuing education of directors, provision of information required for performance of duties by directors, assistance in directors’ compliance of law, etc.

The execution and training:

YEAR LINK
2024Y
2023Y
2022Y
2021Y

Ethical Management

Policies and Norms

(1) Integrity and trustworthiness are the company's most important core values, and we conduct all business activities upholding ethical standards.

(2) The company follows the "Code of Practice for Corporate Governance of Listed Companies" and the "Corporate Governance Assessment Self-Assessment Indicators" of the Taiwan Stock Exchange Corporate Governance Center to implement corporate governance and formulate the "Code of Integrity Business Operations" and "Integrity Business Operation Procedures and Behaviors Guide", "Integrity management procedures" and "Code of Business Ethics" and other important internal norms, from the board of directors to the management, actively implement the commitment to the integrity management policy, truly implement the integrity management policy in internal management and business activities, and require all colleagues to fully participate and compliance.

(3) In order to implement the ethical code of conduct and operate with integrity, the company has formulated "Complaint and Report Handling Procedures" to ensure smooth reporting channels and protect the privacy of the reporter.

(4) The company's Legal Department, Human Resources Department and Accounting Department jointly form the "Dedicated Unit for Integrity Management", which is responsible for promoting the company's corporate governance such as honest operation, anti-corruption, anti-bribery and legal compliance based on the work responsibilities and scope of each unit. Ethics-related matters shall be reported to the board of directors at least once a year, with the latest report to the board of directors being October 25, 2023.

Precautions

1. Prevent insider trading:

(1) The company has "Internal Material Information Processing Operation Procedures" and "Internal Material Information Processing and Insider Trading Prevention Management Operations" to prohibit company insiders from using undisclosed information in the market to buy and sell securities and regard it as material information of the company. The basis for the handling and disclosure mechanism is to provide education and propaganda on insider trading prevention management to new directors and managers before taking office to ensure that they understand the relevant provisions and requirements of the law.

(2) The company’s board of directors approved the addition of Article 10 of the “Corporate Governance Code of Practice” in July 2023: The company’s stock trading control measures for insiders from the date they learn about the company’s financial reports or related performance contents, including (but not (Limited) Directors are not allowed to trade their stocks during the closed period of 30 days before the announcement of the annual financial report and the 15 days before the announcement of the quarterly financial report. Therefore, at the beginning of the month of the board meeting, the company notifies insiders of the closed period of prohibition of trading before the announcement of each quarter's financial report, and strengthens reminders before the board of directors approving the financial report to prevent directors from accidentally violating this norm.

(3) At least once a year, the company conducts education and publicity on "Internal Major Information Processing Operation Procedures", "Internal Major Information Processing and Prevention of Insider Trading Management Operations" and related laws to insiders and supervisors and colleagues with specific positions. To concretely implement the prevention of insider trading.

2. Prevent conflicts of interest:

The company stipulates in the "Integrity Business Operation Procedures and Conduct Guidelines" that directors, managers, and interested parties attending or attending the board of directors who have an interest in the resolutions listed by the board of directors, or the legal persons they represent, shall When the board of directors explains important aspects of its interests that may be harmful to the interests of the company, it is not allowed to participate in discussions and voting, and it should recuse itself from discussions and voting, and it is not allowed to exercise its voting rights on behalf of other directors.

3. Sign the integrity clause

In order to let company members understand that Huatai attaches great importance to honest management and professional ethics, an integrity commitment clause has been added to the internal "Employee Work Commitment Letter" to let colleagues understand the code of conduct that should be followed on issues of integrity and professional ethics; externally disclosed on the company website Code of Integrity Business and other relevant documents, and suppliers are required to sign the "Supplier Integrity Commitment Letter".

4. Regular education and training:

The company regularly holds education and training on integrity management, and the content of integrity management promotional materials is sent to company colleagues by letter, and the company's ethics policy is publicized on the company's internal bulletin board.

Violation of ethics and integrity reporting mechanism

In order to ensure the implementation of honest management and provide a basis for handling complaints and reports when employees, suppliers and contractors suffer unreasonable treatment and circumstances at work, Huatai has established a "Complaint and Report Handling Procedure" and set up internal and external The complaint hotline and mailbox have been set up, and the reporting system and channels have been disclosed on the company’s website to encourage Huatai’s internal employees and other external stakeholders to report dishonesty and inappropriate behavior.

Implementation of Ethical Management:

(1) 2023 Integrity Management Implementation Report

(2) In 2023, the number of participants in the internal education and training organized by the company on related topics such as integrity management, business ethics and insider trading prevention was 4,991, totaling 4,991 hours.

(3) The company will notify insiders by email on July 7, 2023 and October 3, 2023 respectively of the closed period before the announcement of each quarterly financial report to prevent insiders from accidentally violating this standard.

The Info of Ethical Management:

FILENAME LINK
Ethical Corporate Management Best Practice Principles.PDF
Code of Ethical Conduct.PDF
Integrity Management Operating Procedures and Conduct Guidelines
Corporate Conduct and Ethics Implementation in 2020
Corporate Conduct and Ethics Implementation in 2021
Corporate Conduct and Ethics Implementation in 2022

Major Internal Policies

Policies Date Link
Article of Incorporation
2023.06.09
Rules of Procedure for Shareholders' Meetings
2013.06.11
Rules for Election of Directors
2019.06.18
Remuneration Committee Charter
2021.03.10
Procedures for Acquisition or Disposal of Assets
2022.06.10
Procedures for Financial Derivatives Transactions
2022.06.10
Procedures for Lending Funds to Others
2019.06.18
Procedures for Endorsement and Guaranteess
2019.06.18
Code of Ethical Conduct
2019.08.13
Procedures for Handling Material Inside Information
2022.10.27
Operation Procedures for Application of Transaction Suspension and Resumption
2019.08.13
Audit Committee Charter
2020.03.27
Ethical Corporate Management Best Practice Principles
2020.05.07
Procedures for the Board of Director's Performance Evaluation
2020.03.27
Internal major information processing and insider trading prevention management operations
2023.07.26
Handling Procedures for Complaints and Reports
2024.05.14
Corporate Governance Best Practice Principles
2023.07.26
Risk management policies and procedures
2023.07.26
Related Party Transaction Management Measures
2023.07.26
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