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

We faces four major types of risks in its operational management risks. In the face of potential risks such as changes in the environment and consumer demand, the company has indeed started from the system and process to formulate various management strategies and implementation methods. Risk management. The main risks are divided into four categories: Human Risk, Financial Risk, Regulatory Risk and Information Risk. The following describes the relevant management strategies.

Management Strategy

Due to its industrial characteristics and trends, OSE is not easy to work with the labor market.
In order to ensure that the company and its employees follow the national laws and regulations when implementing the business, the company has formulated relevant policies and measures for Taiwan and other national laws, including personal data protection. , confidentiality, anti-bribery, anti-discrimination, environmental protection, intellectual property protection, anti-internal transactions, anti-unfair competition, and labor protection and other norms.
This year, the international exchange market volatility and information leakage issues will change, we will also control the four risks identified.

Risk Type Management Strategy
Human Resource Risk

• Employer brand building, Improve salary competitiveness, absorb more talent
• For the newcomers in the service, care for their adaptation, give professional and general training; the promotion of multiple welfare activities
• Establish and improve the production mechanism

Regulatory Risk

• Ensure the internal regulations follow the policy promotion categories; conduct regular reviews and risk assessments, analyze the risks and their response management measures, and designing emergency response and notification mechanisms for specific situations
• Protection of contract rights and protection against damage to company rights, intellectual property management and infringement prevention
•Implement internal compliance education training

Financial Risk

• Monitor the interest rate trend and choose to borrow at a fixed rate or a floating rate
• Keep an eye on market price fluctuations and maintain good interaction with suppliers and customers.

Information Risk

•Establish network firewalls, anti-virus software, email security architecture, servers and PC backup. Regularly perform operations such as system updates to ensure the safety of relevant information equipment within the company
• Develop document and confidential information management policies, implement the company's overall information security management, and ensure related security of data, systems, equipment and networks
• The system establishes a permission mechanism

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.

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.

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 Communication between Independent Directors, Internal auditor supervisor and CPAs:

YEAR Link
2020Y
2019Y
2018Y
2017Y

Major Internal Policies

Policies Date Link
Article of Incorporation
2021.07.15
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
2021.07.15
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
2019.08.13
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
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