Corporate Governance Structure
The Company has passed a resolution on 2020/05/11 board meeting and has appointed competent and appropriate corporate governance personnel. The Company has established full-time financial officer, Huang, Je-Wen as responsible for corporate governance related matters. Huang has accumulated over three years of financial manager expertise and experience.
The company has established a Chief Corporate Governance Officer who meets the eligibility requirements before the release of “Taipei Exchange Directions for Compliance Requirements for the Appointment and Exercise of Powers of the Boards of Directors of TPEx Listed Companies”and completed 12 hours of training hours in 2021.
Continuing education taken by the Director of Corporate Governance in 2021 is as follows:
Corporate Governance Officer: Huang Che-Wen
|Continuing Education Date||Organizer||Class Title||Continuing Education Hours|
|2021.09.01||Financial Supervisory Commission R.O.C.(Taiwan)||The 13th Taipei Corporate Governance Forum- Morning session||3|
|2021.09.01||Financial Supervisory Commission R.O.C.(Taiwan)||The 13th Taipei Corporate Governance Forum- Afternoon sessions||3|
|2021.10.15||Securities and Futures Institute||The transaction analysis and case discussion of the relationship between the supervisor and the supervisor.||3|
|2021.10.15||Securities and Futures Institute||Early warning and type analysis of financial crisis in enterprises||3|
Preventing insider trading education promotion
The Company hosts educational awareness training pertaining to “Prevention of Insider Trading” and relevant regulations at least once a year. Newly appointed directors and managers will be scheduled for these courses respectively. The Company’s current directors and management has undertaken the aforementioned education training on July 22th, 2021. The course includes non-disclosure related issues regarding material information, the definition of insider trading, and case studies.
PSC’ 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 General Manager on a monthly and on as needed basis. There are four full time employees dedicated to Internal Audit, including the Internal Auditing Officer and audit representative.
PSC has established and carries out “internal control systems” according to the Regulations Governing Establishment of Internal Control Systems promulgated by the Securities and Exchange Act.
The majority of the audit work is executed according to an annual plan. Special audits or reviews are conducted as needed. The combination of the regular audits and the special projects provide management with feedback on the functioning of the internal control system.
The Company has 5 to 9 directors, adopting a nomination system for candidates, which will be selected by the shareholders’ meeting for the list of candidates for a three-year term and the same person may be re-elected upon expiry of the term, however, according to Article 14-2 of the Securities and Exchange Act. The above number of board of directors shall include at least 3 independent directors and no less than one-fifth of the numbers of board of directors.
Member of Board of Directors
|Title||Name||Date appointed Date||Term||Education/work experience||Other positions at the Company or elsewhere|
|Chairperson||Promate Electronic Co., Ltd. (Representative：Cheer Du)||2018.6.11||3 Year||Department of Economics, National Taiwan University||Chairperson, Guang Mai industrial Ltd.|
|Director, Chuang Feng investment Co., Ltd.|
|Chairperson, Promate Solutions Co., Ltd.|
|Chief Operating Officer, Promate Electronic Co., Ltd.|
|Directors||Promate Electronic Co., Ltd. (Representative：Eric Chen)||2018.6.11||3 Year||Bachelor of Science in Electrophysics, National Chiao Tung University, Taiwan||Chairperson, Chuang Feng investment Co., Ltd.|
|Director, Promate Solutions Co., Ltd.|
|Engineer, Texas Instruments Inc||Chairperson, Promate Electronic Co., Ltd.|
|Director, Weikeng Industrial Co., Ltd.|
|Directors||Promate Electronic Co., Ltd. (Representative：Ciou-Jiang HU)||2018.6.11||3 Year||Master of Business Administration, Da-Yeh University, Taiwan||President, Weikeng Industrial Co., Ltd.|
|Bachelor of Science in Communications Engineer, National Chiao Tung University, Taiwan||Chairman, Weiji Investment Co., Ltd.|
|Chairman, Weikeng International Co., Ltd.|
|Chairman, Weikeng Technology Pte Ltd.|
|Executives Program, Graduate School of Business Administration, National Cheng-Chi University||Chairman, Weikeng Technology Co., Ltd.|
|Independent Director & Remuneration Committee, V-TAC Technology Co., Ltd.|
|Independent Director, Remuneration Committee, and Audit Committee, CIPHERLAB Co., Ltd.|
|Director, Promate Electronic Co., Ltd.|
|Ph.D. of Institute of Management of Technology, National Chiao Tung University, Taiwan||Director（Representative of Juristic Person/ Promate Electronic Co., Ltd.）, Promate Solutions Co., Ltd.|
|Director, Amazing Microelectronic CO., Ltd.|
|Supervisor, LEADTEL Co., Ltd.|
|Supervisor, EVGA Technology Incorporated|
|Directors||Liu-Ping Chen||2018.6.11||3 Year||Department of Management Information System,Chung Yu University of Film and Arts||–|
|Financial Manager , Wellmark Investment Co., Ltd.||–|
|Independent Director||Ying-Min Zhong||2018.6.11||3 Year||Department of Economics,Soochow University,Taiwan||–|
|Financial Manager, Applied Materials Taiwan||–|
|Independent Director||Mau-Shiung Chen||2018.6.11||3 Year||Department of Economics, National Taiwan University||–|
|Executive Master of Business Administration, University of Houston||–|
|General Manager of IBM’s Greater China Telecom and Media Business Group.||–|
|Deputy General Manager, International Integrated Systems Inc.||–|
|Independent Director||Yue-Xiu Liu||2018.6.11||3 Year||Master of Electrical Engineering, National Taiwan University||–|
|Electrical Engineering, Tamkang University,Taiwan||–|
|Technical Manager, Novatek Microelectronics Corp.||–|
Diversity of Board Members
Pursuant to the Company’s “Corporate Governance Principles,” the composition of the Board of Directors should take into consideration the policy of diversity. Directors who serve concurrently as the Company’s managers should not exceed one third of all Directors and appropriate diversification guidelines have been established based on Company operations, its business model, and development requirements. These guidelines stipulate that Directors should be assessed by standards including but not limited to the following two aspects:
A. basic qualifications and value: gender and age;
B. Professional knowledge and skills: professional background, competencies, and industry experiences etc as follows：
1. Ability to make sound business judgments.
2. Accounting and financial analysis capability.
3. Ability to manage a business.
4. Ability to respond to a crisis./font>
5. Industry knowledge.
6. An understanding of international markets.
8. Decision-making capability
|Title||Name||Gender||Age||Ability to make sound business judgments||Accounting and financial analysis capability||Ability to manage a business||Ability to respond to a crisis||Industry knowledge||An understanding of international markets||Leadership||Decision-making capability|
|Chairman and CEO||Promate Electronic Co., Ltd. (Representative : Cheer Du)||Female||66||V||V||V||V||V||V||V||V|
|Director||Promate Electronic Co., Ltd. (Representative : Eric Chen)||Male||69||V||V||V||V||V||V||V|
|Director||Promate Electronic Co., Ltd. (Representative : Ciou-Jiang HU)||Male||68||V||V||V||V||V||V||V||V|
|Independent Director||Ying-Min Zhong||Female||66||V||V||V||V||V||V||V||V|
|Independent Director||Mau-Shiung Chen||Male||61||V||V||V||V||V||V||V|
|Independent Director||Yue-Xiu Liu||Male||45||V||V||V||V||V||V||V|
Independent Directors’ Communication with Internal Auditor and Certified Public Accountant (CPA)
I. Communication methods
1. The head of internal auditor and independent directors meet at least once a quarterly regular meeting to report on the company’s internal audit execution status, internal control operations and the execution of Audit Committee Letter; meetings can be convened at any time if there are major events.
2. Independent directors and accountants meet at least twice a year regular meeting. Accountants report on the results of quarterly financial statement reviews or verifications and other communication requirements required by relevant laws and regulations. Communications will be made on whether there are any significant adjustment entries or legal amendments affecting the accounting situation and they also regularly update laws and ordinances to independent directors every year. Independent directors also conduct independent assessments of the services provided by accountants. If there are major events, a meeting can be convened at any time.
II. The communication situation is as the attached:
1. Supervisor of internal auditor attended the Audit Committee and Board Meeting
|2021.12.13||Discussion on the Company’s internal audit plan for 2022||No major lack of internal control and abnormal events.|
|2021.11.09||2021Q4 Presentation of audit report.||No major lack of internal control and abnormal events.|
|2021.10.13||Explaining the findings and results of the internal control system test for the company’s fraud risk.||No major lack of internal control and abnormal events.|
|2021.08.05||2021Q3 Presentation of audit report.||No major lack of internal control and abnormal events.|
|2021.06.22||2021Q2 Presentation of audit report.||No major lack of internal control and abnormal events.|
|2021.03.23||1. Internal Control System Statement for 2020.||No major lack of internal control and abnormal events.|
|2. 2021Q1 Presentation of audit report.|
|2020.12.28||․2020Q4 Presentation of audit report||No major lack of internal control and abnormal events.|
|․Discussion on the Company’s internal audit plan for 2021|
|2020.08.11||2020Q3 Presentation of audit report||No major lack of internal control and abnormal events.|
|2020.06.09||2020Q2 Presentation of audit report||No major lack of internal control and abnormal events.|
|2020.03.16||․2020Q1 Presentation of audit report||No major lack of internal control and abnormal events.|
|․Internal Control System Statement for 2019|
2. Communication meeting between CPA and Audit Committee( Independent Directors)
|2021.12.13||Review and communication with the CPA regarding proposed 2021 audit and key audit items.||All of above matters were reviewed and approved by the Audit Committee whereupon independent directors raised no objection.|
|2021.10.13||Explaining the findings and results of the internal control system test for the company’s fraud risk.||All of above matters were reviewed and approved by the Audit Committee whereupon independent directors raised no objection.|
|2021.03.23||Major findings from the CPA’s audit of the Company’s 2020 consolidated financial reports(including journal entry adjustment and material weaknesses in internal control), the subsequent audit report was submitted to the meeting for discussion.||All of above matters were reviewed and approved by the Audit Committee whereupon independent directors raised no objection.|
|2020.12.28||Explaining the findings and results of the review of the 2020 consolidated and standalone financial reports and communicating key review matters.|
|2020.06.09||The 2020Q2 consolidated financial statements and audit plan.|
|2020.03.16||Major findings from the CPA’s audit of the Company’s 2019 consolidated financial reports(including journal entry adjustment and material weaknesses in internal control), the subsequent audit report was submitted to the meeting for discussion.|
I.Organizational structure of information security
II.Information Security Management Policy
Purpose: To strengthen information security management, Promate Electronic Co., Ltd. establishes safe and reliable electronic communications that ensure data confidentiality, system integrity and process management, in addition to equipment and network security. This avoids unnecessary operational losses caused by information security failures so as to ensure the purpose of continuous business operations.
III.Information Security Management Measures
|Access Management||1. Review of personnel account access management|
|2. Regular inventory of personnel accounts|
|3. Strengthen employees’ awareness of information security and information security education and training|
|Control and Management on System Access||1. Management measures of personnel access to internal/external systems and data transmission|
|2. Separating the internal/external network with a firewall|
|3. Remote access management measures|
|External Threats||1. Program for computer virus protection and regular virus pattern updates|
|2. Regular vulnerability scans|
|3. If the information system is infected by a virus, security vulnerabilities and exploits shall be protected|
|4. E-Mail security, Spam mail filtering mechanism|
|Availability||1. Network and system usage status monitoring and reporting mechanism|
|2. Contingency measures when information services are interrupted|
|3. Ensure the implementation of daily backup/remote backup mechanisms and store them in a secure location|
|4. Data leakage prevention mechanism to ensure data confidentiality|
|5. Regular disaster recovery drills so that the computer systems and business can quickly resume to normal operations after a disaster occurs|
The Audit Committee
The Audit Committee of the Company (the Audit Committee), composed of all three of the independent directors, has been established in order to enhance the corporate governance, to refine the internal audit and to strengthen the management. The purpose of the Audit Committee is to help the Board of Directors execute its responsibility in supervision on such categories as the financial statements, the audit and accounting policy and procedure, the internal control code and other major items as stipulated by related companies or the regulatory authorities.
The Company’s Audit Committee was set up in July 2016. The Audit Committee shall faithfully carry out the following duties and submit any proposals to Board of Directors meeting for discussions.
1. The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
2. Assessment of the effectiveness of the internal control system.
3. The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees for others.
4. Matters in which a director is an interested party.
5. Asset transactions or derivatives trading of a material nature.
6. Loans of funds, endorsements, or provision of guarantees of a material nature.
7. The offering, issuance, or private placement of equity-type securities.
8. The hiring or dismissal of a certified public accountant, or their compensation.
9. The appointment or discharge of a financial, accounting, or internal audit officer.
10.Annual and semi-annual financial reports.
11.Other material matters as may be required by this Corporation or by the competent authority.
12.The Audit Committee performance evaluation.
Members of the Audit Committee
|Independent Director||Ying-Min Zhong||Convener|
|Independent Director||Mau-Shiung Chen||–|
|Independent Director||Yue-Xiu Liu||–|
• Periodically review these procedures and propose any amendments.
• Set and regularly review annual and long-term performance goals and salary compensation policies, systems, standards and structure of the Company’s directors, supervisors, and managers.
• Assess the performance objectives of the Company’s directors, supervisors and managers on a regular basis to determine the items and amount of compensation for them.
The Committee shall perform the duties under the preceding paragraph in accordance with the following principles:
1. Ensuring that the compensation arrangements of this Corporation comply with applicable laws and regulations and are sufficient to recruit outstanding talent.
2. Performance assessments and compensation levels of directors, supervisors, and managerial officers shall take into account the general pay levels in the industry, individual performance assessment results, the time spent by the individual and their responsibilities, the extent of goal achievement, their performance in other positions, and the compensation paid to employees holding equivalent positions in recent years. Also to be evaluated are the reasonableness of the correlation between the individual’s performance and this Corporation’s operational performance and future risk exposure, with respect to the achievement of short-term and long-term business goals and the financial position of this Corporation.
3. There shall be no incentive for the directors or managerial officers to pursue compensation by engaging in activities that exceed the tolerable risk level of this Corporation.
4. For directors and senior managerial officers, the percentage of remuneration to be distributed based on their short-term performance and the time for payment of any variable compensation shall be decided with regard to the characteristics of the industry and the nature of this Corporation’s business.
5. No member of the Committee may participate in discussion and voting when the Committee is deciding on that member’s individual compensation.
Members of the Remuneration Committee
|Independent Director||Mau-Shiung Chen||Convener|
|Independent Director||Ying-Min Zhong||–|
|Independent Director||Yue-Xiu Liu||–|
Ethical Management Practices
Implementation of Ethical Corporate Management and Deviations from the “Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
2021.12.13 Resolution by the board of directors
|aluation Item||Implementation status||Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons|
|I. Establishment of ethical corporate management policy and approaches|
|(I) Did the company establish an ethical corporate management policy that was approved by the Board of Directors, and declare its ethical corporate management policy and methods in its regulations and external documents, as well as the commitment of its Board and management to implementing the management policies?||(I) The Company has a “Code of Ethical Operation” established by the Board of Directors, which applies to the companies and organizations in our group. It is strictly implemented in our internal management and external business activities.||No difference|
|(II) Does the company establish mechanisms for assessing the risk of unethical conduct, periodically analyze and assess operating activities within the scope of business with relatively high risk of unethical conduct, and formulate an unethical conduct prevention plan on this basis, which at least includes (II) Does the company establish mechanisms for assessing the risk of unethical conduct, periodically analyze and assess operating activities within the scope of business with relatively high risk of unethical conduct, and formulate an unethical conduct prevention plan on this basis, which at least includes？||(II) The companies and organizations in our group conduct the mentioned matters following the relevant provisions and operating procedures stipulated in the corporation’s “Code of Ethical Operation.”||No difference|
|(III) Did the company specify operating procedures, guidelines for conduct, punishments for violation, rules of appeal in the unethical conduct prevention plan, and does it implement and periodically review and revise the plan?||(III) To enhance the management of ethical operations, the Company has set up a dedicated unit under the Board of Directors, allocating sufficient resources and qualified personnel to it. It is responsible for the formulation and supervision of ethical management policies and precautionary measures. It primarily administers the following affairs and regularly reports to the Board of Directors (at least once a year):||No difference|
|II. Implementation of ethical corporate management|
|(I) Does the company evaluate the ethical records of parties it does business with and stipulate ethical conduct clauses in business contracts?||(I) Contracts signed between the Company and suppliers or manufacturers are performed in good faith. Generally, there are provisions in place that prohibit the receiving of kickbacks.||No difference|
|(II) Did the company establish a dedicated unit under the Board of Directors to promote ethical corporate management, and periodically (at least once a year) report to the Board of Directors and supervise the implementation of the ethical corporate management policy and unethical conduct prevention plan?||(II) The Company has set up a dedicated (part-time) unit under the Board of Directors to implement ethical corporate management. It regularly reports to the Board of Directors regarding its operation. The primary focus when it comes to the promotion of company managers and the appointment of employees is their integrity records, and these are one of the focal points in the consideration for promotions. On December 13, 2021, the Board of Directors completed the 2021 annual reporting on the implementation of ethical management.||No difference|
|(III) Does the company establish policies to prevent conflict of interests, provide appropriate channels for filing related complaints and implement the policies accordingly?||(III) The Company has a “Code of Ethical Operation” and “Code of Moral Conduct” to prevent conflicts of interest and avoid personal gain.||No difference|
|If the directors or their legal representatives have a stake in the motions set forth by the Board of Directors, the shall disclose the nature of their interest and not be included in the related discussion or vote on the said motion, or represent other directors in exercising their voting rights.|
|(IV) Does the company have effective accounting system and internal control systems set up to facilitate ethical corporate management, does the internal auditing unit formulate audit plans based on unethical conduct risk assessment results, and does it audit compliance with the unethical conduct prevention plan or commission a CPA to perform the audit?||(IV) The accounting system of the Company is based on the Securities and Exchange Act, the Company Act, the Business Entity Accounting Act, the Regulations Governing the Filing of Financial Reports by Public Companies, and other relevant legislation, then devised according to the actual situation of the company’s business; the internal control system is based on the “Regulations Governing the Establishment of Internal Control Systems by Public Companies” and other relevant regulations, which are all thoroughly implemented. The audit department also regularly examines the status of the accounting system and internal control system and reports to the Board of Directors.||No difference|
|(V) Does the company regularly hold internal and external educational trainings on ethical corporate management?||(V) The Company periodically organizes promotions and training on ethical management at appropriate times.||No difference|
|III. Operation of whistleblowing system|
|(I) Does the company establish concrete whistleblowing and reward system and have a convenient reporting channel in place, and assign an appropriate person to communicate with the accused?||(I) The Company has “Employee Work Rules” and “Reporting System Management Measures,” which clearly stipulates the relevant content, and will assign designated personnel to handle each of the reported cases.||No difference|
|(II) Does the company establish standard operating procedures for investigating reported cases, and does it take subsequent measures and implement a confidentiality mechanism after completing investigation?||(II) The Company has relevant employee reporting procedures in place, along with confidentiality mechanisms.||No difference|
|(III) Does the company provide proper whistleblower protection?||(III) Designated personnel will be appointed to handle each of the reported cases. During the appeal process, the informant will be protected from improper punishment due to the reporting.||No difference|
|IV. Enhancing information disclosure|
|Does the company disclose information regarding the company’s ethical corporate management principles and implementation status on its website and the Market Observation Post System?||The Company has established the “Code of Ethical Operation” to enhance the management of ethical operations and placed it on our company website. With the chairman’s office as a designated unit, we allocate sufficient resources and qualified personnel to it. It is responsible for the formulation and supervision of ethical management policies and precautionary measures and regularly reports to the Board of Directors (at least once a year). At the same time, we set up a designated area for stakeholders on our website, establishing a communication platform. In 2021, no illegal, unethical, or untrustworthy conduct has been reported.||No difference|
|V. If the company has established Ethical Corporate Management Principles in accordance with “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies,” describe difference with the principles and implementation status:|
|The Company established the “Ethical Corporate Management Best Practice Principles” to establish a corporate culture of ethical management and to achieve sound development. There is no deviation between actual operations and the Company’s Best Practice Principles.|
|VI. Other important information to facilitate a better understanding of the company’s implementation of ethical corporate management:In addition to the “Code of Ethical Operation,” the Company also establishes relevant regulations of ethical management in the contracts with manufacturers. Employees are also required to adhere to the code of ethical conduct when they take up their posts. In 2021, the Company held internal and external education training with a collective attendance of 12 people for a total of 105 hours (the scope covers compliance with ethical management, the accounting system, and the internal control system).|