Information of Functional Committees
Audit Committee
The Audit Committee has been established since June 2007 to oversee the financial affairs of the Company, the appointment (discharge) of certified accountants, and the control of independence, internal control, relevant legislation, and potential risks to assist the board of directors in its functions.
The Audit Committee shall hold a regular meeting at least once a quarter. Please refer to the Company’s annual report for the actual meeting of the Committee.
The matters discussed by the Audit Committee mainly include:
- 1. Establishment or amendment of the internal control system in accordance with Article 14(1) of the Securities and Exchange Act.
- 2. Effectiveness assessment of the internal control system.
- 3. Stipulation or amendment of the procedures for the disposal of major financial business activities of acquiring or disposing of assets, engaging in derivatives trading, lending funds to others, endorsing or providing guarantees for others in accordance with Article 36(1) of the Securities and Exchange Act.
- 4. Matters involving the interests of the directors.
- 5. Major transactions in assets or derivatives.
- 6. To lend, endorse, or provide a guarantee of major funds.
- 7. To raise, issue, or place private equity securities.
- 8. Appointment, discharge, or remuneration of certified accountants.
- 9. Appointment and discharge of finance, accounting, or internal audit directors.
- 10. Annual and semi-annual financial statements.
- 11. Other important matters stipulated by the Company or the competent authority.
Remuneration Committee
The function of the Remuneration Committee is to evaluate, in a professional and objective manner, the remuneration policies and system of the Company’s directors, supervisors, and managers, and to make recommendations to the board for its policy reference. The Remuneration Committee shall hold at least two regular meetings a year. Please refer to the Company’s annual report for the actual meeting of the Committee.
The matters discussed by the Remuneration Committee mainly include:
- 1. To review the organizational procedures of the Remuneration Committee on a regular basis and make recommendations for amendments
- 2. To stipulate and review annual and long-term performance goals and remuneration policies, system, standards, and structures of the Company’s directors, supervisors, and managers
- 3. To evaluate regularly the achievement of performance goals of the Company’s directors, supervisors, and managers, and determine the content and amount of individual remuneration.
Board and Functional Committee Performance Evaluation
In order to implement corporate governance, enhance the function of the board of directors of the Company, and establish performance goals to strengthen the operational efficiency of the board of directors, the board of directors of the Company adopted the Directions for Performance Evaluation of the Board of Directors on December 26, 2019, and implemented it since 2009. The main evaluation period, evaluation scope and method, evaluation execution unit, evaluation procedure and other matters to be followed shall be handled in accordance with the provisions of the Directions.
The latest evaluation interval is January 1, 2020 to December 31, 2020. The relevant work has been started since January 2021, and the secretarial unit is in charge by the finance department. The evaluation results of 2020 will be disclosed on the official website and annual report after being reported to the board of directors in the first quarter.
The Company takes into account the situation and needs of the Company and sets up the measurement items of the board of directors performance evaluation, including the following five aspects:
- 1. Involvement in the operation of the Company.
- 2. Improvement of the quality of the board decisions.
- 3. Board composition and structure.
- 4. Appointment of directors and continuing education.
- 5. Internal control.
The measurement items of the board members (self or peer) performance evaluation include the following six aspects:
- 1. Knowledge of the Company’s goals and tasks.
- 2. Cognition of director responsibility.
- 3. Involvement in the operation of the Company.
- 4. Internal relationship management and communication.
- 5. Professional and continuing education of directors.
- 6. Internal control.
The measurement items of the Functional Committee performance evaluation include the following five aspects:
- 1. Involvement in the operation of the Company.
- 2. Cognition of the Functional Committee responsibility.
- 3. Improvement of the quality of the Functional Committee decisions.
- 4. Composition and appointment of the Functional Committee.
- 5. Internal control.
External Evaluation of Board Performance: Taiwan Corporate Governance Association
In 2020, the Company entrusted Taiwan Corporate Governance Association for the first time to conduct the external evaluation of board performance and to evaluate the composition of the board of directors. The eight aspects of board guidance, authorization, supervision, communication, internal control and risk management, self-discipline, and other support systems were investigated by online self-assessment questionnaire and field visit. Taiwan Corporate Governance Association and its evaluation experts have no business relationship with the Company and are independent. The evaluation report issued by them will be disclosed on the official website and annual report after being reported to the board of directors in the first quarter of 2021.
The planning, execution, supervision, and assessment cycle of business operation, and the cooperation between the board of directors and the management team define the scope of the “Board Performance Evaluation Service” of the Association, including the following eight aspects:
- 1. Composition of the board of directors.
- 2. Guidance of the board of directors
- 3. Authorization of the board of directors.
- 4. Supervision of the board of directors.
- 5. Communication of the board of directors.
- 6. Internal control and risk management.
- 7. Self-discipline of the board of directors.
- 8. Others including board meetings, support systems, etc.
General Comments and Suggestions
General Comments:
- 1. When the Company holds strategy meetings every year, apart from the management team, it also invites the independent directors to review the domestic and foreign operations and analyze the current market conditions, so as to adjust product strategy and operational direction. The board of directors interacts closely with the management team, grasps the Company’s strategy and operation implementation, and gives full play to the guidance and supervision functions of the board of directors.
- 2. Due to the fierce competition in the industry, the Company pays special attention to talent training. In addition to the systematic development, training and succession planning of mid-level managers and executives, the Company also cooperated with National Taiwan University to launch the “Everlight Elite MBA Program, National Taiwan University” in 2018. At the same time, the Company conducts a talent review to classify talents into successors, key experts and high-potential employees, and it uses the MAP evaluation tool to identify talent gaps and plans training for future successors to meet the Company’s long-term growth needs.
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3. The independent directors of the Company are actively responsible and interact frequently with the management team outside the meetings of the board of directors and committees to provide adequate advice and guidance. On important functional committee issues, the independent directors will first exchange views with each other to reach a consensus, and then the convener will communicate with the chairman.
[Everlight Electronics Co., Ltd.] Board Performance Evaluation - 4. The chairman of the Company has an open leadership style and is willing to take ideas and suggestions from employees so that all members of the board of directors can fully express their opinions and effectively play their leadership functions. When the board of directors made reports and discussed proposals, the directors had the courage to make suggestions, and their statements were recorded in detail in the minutes.
- 5. The employees’ reward policy, in addition to the various cash bonuses, is also accompanied by the employee stock warrants with an equity nature. The employees receiving the stock warrants may exercise the right to subscribe common shares for three years after the expiration of two years from the date of issue. This policy serves as a long-term incentive tool to encourage employees to grow together with the Company and achieve the effect of retaining talents.
Suggestions:
- 1. The Company’s current risk management is under the control of each department according to their own rights and responsibilities. If there is any risk, it will be reported on a case-by-case basis. It is suggested that the Company establish a risk management system and set up a risk management unit to uniformly inspect the implementation of all kinds of risk management in the Company’s operations, and report regularly to the Audit Committee and the board of directors so that the board of directors can effectively supervise the management of the Company’s operational risk.
- 2. At present, the Company has employee complaint hotline and mailbox, and the complaint will be dealt with by the audit supervisor and reported to the chairman of the board. However, the whistle-blower mechanism should be the first and direct communication channel between the independent director and the Company. It is suggested that the Company set up a complaint mailbox to be received simultaneously by the independent director (or the Audit Committee) and the audit supervisor to further strengthen the function of the whistle-blower mechanism.
- 3. The Company passed the Directions for Performance Evaluation of the Board of Directors in December 2019 and conducted the self-evaluation of the board of directors for the first time this year. It is suggested to set up specific scoring criteria for board performance evaluation indicators, and the Company should review the indicators regularly after setting them to confirm the effectiveness of the indicators and promote the continuous improvement of board effectiveness.
