Improved Corporate Governance

Strengthened risk control and self-monitoring to adapt to market conditions

2022 Corporate Governance Facts

  • WT was ranked in the top 5% in the listed companies category, and top 10% in the OTC/TWSE-listed companies in electronics sector with NT$10 billion plus market value category of the 9th Corporate Governance Evaluation
  • The independent directors received 8.7 hours of training on average, and the directors 8.9 hours.
  • The directors' attendance rate at regular shareholders' meeting was 100%.
  • The independent directors' in-person attendance rate at the 13 Board meetings was 100% on average, and the directors' was 98.9%.
  • On June 2, 2022, WT was included in the FTSE TWSE Taiwan Dividend+ Index.
  • On November 24, 2022, WT was listed in the Top 100 Carbon Competitiveness List by the Business Weekly Survey (the only company in the electronic distribution sector).
  • The individual and consolidated financial statements audited by public certified accountant were released 55 days after the end of the year (required by law within three months) ; the quarterly consolidated financial reports audited by public certified accountant were released 34 days after the end of each quarter on average (required by law within forty-five days).
  • A total of 23 in-person and online Investor Conferences were held.
  • Board Composition and Functions

    WT has established a corporate governance structure to manage the company’s business in accordance with the Company Act‭, ‬the Securities and Exchange Act and other relevant laws and regulations of the Republic of China‭. ‬We have been strengthening the company’s performance and responsibility‭, ‬and balancing the interests between stakeholders in pursuit of long-term interests of shareholders‭.Under the Board of Directors‭, ‬there are Audit Committee‭, ‬Remuneration Committee and Risk Management Committee‭. ‬The Risk Management Committee is composed of three Independent Directors‭, ‬the Chairman and the Chief Financial Officer‭. ‬Its role is to review risk management policies and management reports on major risk issues‭, ‬oversee corrective measures‭, ‬and routinely report the implementation of risk management to the Board of Directors‭.‬

    In May 2019‭, ‬the Board of Directors appointed Kerry Hsu‭, ‬senior vice president‭, ‬as the head of corporate governance‭, ‬responsible‭ ‬for organizing the meeting schedule and agenda of the Board of Directors and shareholder meetings‭, ‬assisting directors in their‭ ‬training plans‭, ‬providing directors with information needed to perform duties in compliance with laws and regulations‭, ‬and disseminating information to directors on a regular or occasional basis‭, ‬depending on the topic‭, ‬to strengthen corporate governance‭ ‬functions‭.‬

    Diverse Board with more than 40%‭ ‬of the directors being women

    The Board of Directors is WT’s highest governance body‭. ‬The tenth terms of Board was elected on May 20‭, ‬2022‭, ‬is composed of four Directors and three Indepentent Directors‭. ‬In order to strengthen the sound development of corporate governance‭, ‬the policy of‭ ‬diversity is implemented in accordance with the Corporate Governance Best Practice Principles formulated by WT‭. ‬Of the Board Members‭, ‬there are three Independent Directors‭ (‬43%‭), ‬three female Directors‭ (‬43%‭), ‬and two Directors are employees‭ (‬29%‭). ‬In addition‭, ‬four of the current directors are aged from 51‭ ‬to 60‭ ‬years old‭, ‬one‭ ‬from 61‭ ‬to 70‭ ‬years old‭, ‬and two from 71‭ ‬to 80‭ ‬years old‭. ‬For the implementation of the Board Member diversity policy‭, ‬please visit the corporate governance section of the WT official website‭.‬

    The Board of Directors meets at least once a quarter to monitor the achievement of the Company’s operational goals and performance‭, ‬provide strategic guidance to the management team‭, ‬and oversee the Company’s compliance with laws and regulations to ensure‭ ‬the best interests of shareholders‭. ‬In fiscal 2022‭, ‬the directors‭’ ‬in person attendance rate at the thirteen Board meetings was‭ ‬98.9%‭ ‬on average‭, ‬and the Independent Directors‭’ ‬was 100%‭. ‬Conflicts of interest with directors are avoided in accordance to the‭ ‬provisions of Article 15‭ ‬of WT’s Rules of Produre for Board of Directors‭’ ‬Meeting‭. ‬Meeting items involving a director’s interests are disclosed in the annual reports‭, ‬with the names of the director involved‭, ‬the content of the item‭, ‬and the reasons for avoiding conflicts of interest‭. ‬In addition‭, ‬information such as‭  ‬the existence of a controlling shareholder‭, ‬and related party transactions are all disclosed in the annual report to avoid or reduce the possibility of conflicts of interest‭.‬

    For information on the diversity of the Board of Directors‭, ‬the Audit Committee‭, ‬the Remuneration Committee and the Risk Management Committee‭, ‬including the members‭’ ‬age range‭, ‬experience‭, ‬tenure‭, ‬as well as information on their in-person attendance rate at the Board meetings‭, ‬status of continuing training and education‭, ‬and how conflicts of interest have been avoided or handled in‭ ‬2022‭, ‬please see Chapter Three Report on Corporate Governance in the Annual Report 2022‭.‬

    Dutiful Audit Committee members had‭ ‬100‭ ‬percent in-person attendance

    The Audit Committee was established on June 21‭, ‬2019‭. ‬Instead of being appointed by the Board of Directors‭, ‬the Audit Committee‭ ‬is required by law to be composed of all the Independent Directors‭. ‬As the current Board was re-elected by the shareholders‭’ ‬meeting on May 20‭, ‬2022‭, ‬the second term of Audit Committee is composed of all the three current Independent Directors‭. ‬Two of them‭ ‬have expertise in accounting or finance in order to assist the Board in supervising that the company’s financial reports are expressed properly‭, ‬the internal controls implemented effectively‭, ‬the compliance with laws and regulations maintained‭, ‬and the existing or potential risks kept under control‭. ‬The Audit Committee holds a meeting at least once every quarter‭. ‬During the year‭, ‬the accountant and the Independent Directors communicate and interact fully with each other on audit planning‭, ‬audit‭, ‬and audit‭ ‬results‭. ‬At each regular Board‭, ‬the‭ ‬chief-internal auditing officer‭ ‬reports to the Audit Committee meeting regarding the implementation status and other matters‭. ‬Both the‭ ‬chief-internal auditing officer‭ ‬and the accountant have a channel for direct communication with the Independent Directors‭. ‬In 2022‭, ‬a total of nine Audit Committee meetings were held with all members having a 100‭ ‬percent in-person attendance rate‭.‬

    The fourth term of Remuneration Committee is composed of two Independent Directors and one member fulfilling the requirement of‭ ‬independence‭. ‬As the Board was re-elected by the shareholders‭’ ‬meeting on May 20‭, ‬2022‭ ‬and all the previous members left the Board on the same day‭, ‬the Board reappointed the three Independent Directors to make up the fifth term of Remuneration Committee on‭ ‬May 31‭, ‬2022‭. ‬The purpose of the Committee is to make objective and professional recommendations to the Board‭, ‬taking into account the Company’s operational performance‭, ‬and to assist the Board of Directors in implementing and evaluating the Company’s overall compensation and welfare policies‭. ‬In addition‭, ‬the remuneration of directors and managers is determined and reviewed in accordance with the Director and Functional Committee Remuneration Payment Guidelines and the Regulations Governing Compensation Payment of Executive Officers as necessary to strike a balance between sustainable management and risk control‭. ‬In 2022‭, ‬a total‭ ‬of three Remuneration Committee meetings were held with all members having a 100‭ ‬percent in-person attendance rate‭.‬

    In 2022, the General Manager’s total annual pay (NTD 37.6 millions) was 30.4 times of the median (NTD 1,236 thousands) of that of the employees (excluding the General Manager) who have worked for more than six months in 2022 at the Taiwan headquarters and the four subsidiaries including Morrihan, Nuvision Technology, Maxtek Technology, and Techmosa. The General Manager’s pay increase from 2021 to 2022 was -3.4 times of the employees’ median pay increase at the Taiwan headquarters including the four mentioned subsidiaries. The ratio was negative as there was a negative increase in the General Manager’s total pay during the period. The total pay included the basic monthly salary and variable bonus and excluded the stock ownership trusts. Only the employees who have been employed throughout both 2021 and 2022 were taken into account for the median calculation to prevent discrepancies between the statistical median and the actual situation caused by issues such as incomparability of the pay increase of those who have not received a full year’s remuneration in both years (including new hires in 2021 or departures in 2022), and the absence of remuneration increase data for the new hires in 2022.

    Note: In 2022, the General Manager’s total annual pay was NT$ 37,600,000. The total pay included the basic monthly salary and variable bonus, and excluded the stock ownership trusts and employee stock options recognized as salary expenses under IFRS 2.

    Basis for effectiveness assessment of the Board of Directors and the functional committees

    In order to implement corporate governance‭, ‬improve the function of the Board of Directors‭, ‬and establish performance goals to strengthen the operational efficiency of the Board of Directors‭, ‬WT has formulated the Rules for Board of Directors Performance Assessments‭ ‬in 2016‭, ‬which clearly stipulates that the Board of Directors and the functional committees should routinely conduct internal self-assessment every year‭. ‬An assessment evaluation must also be preformed once every three years by an external professional independent organization or an external team of experts and scholars‭. ‬The assessment results must be reported to the Board of Directors‭, ‬and be used as a reference to determine individual directors‭’ ‬remuneration payment and nomination for the Board re-election‭.‬

    Internal Self-Assessment

    The internal self-assessment questionnaires for the entire Board of Directors‭, ‬individual members of the Board of Directors‭, ‬individual members of the Audit Committee and individual members of the Remuneration Committee for the year 2022‭ ‬were completed in‭ ‬January 2023‭. ‬The results indicated that the Board of Directors and the functional committees were functioning well‭.‬

    External Assessment

    In 2020‭, ‬an external professional organization‭, ‬the Taiwan Institute of Ethical Business‭, ‬was commissioned to conduct the effectiveness assessment of the Board of Directors for 2020‭. ‬The Institute and its executive experts have no business dealings with WT‭ ‬and thus are independent‭. ‬The assessment was conducted through document review‭, ‬questionnaires and on-site interviews in four major aspects‭, ‬including the Board’s professional functions‭, ‬decision-making effectiveness‭, ‬attention to and oversight of internal controls‭, ‬and attitude toward corporate social responsibility‭. ‬The assessment recommended that the communication improve between the Board and the management team and the Board pay more attention to corporate social responsibility issues‭ (‬known now as sustainability issues‭). ‬In response to the recommendations‭, ‬the corporate governance department took the initiative to collect questions raised by individual Directors and pass them on to the management team‭. ‬When necessary‭, ‬relevant managers were invited to‭ ‬attend the Board meeting to explain to the Directors‭.‬

    Rigorous internal audit to ensure fairness and impartiality

    In WT Microelectronics, the Internal Audit Department (referred to as the Department hereunder) is an independent unit under the Board of Directors. The appointment and dismissal of the company’s internal audit supervisor are approved by the Audit Committee and passed by the Board of Directors. The appointment/dismissal, evaluation/review, salary/compensation of internal auditors of the Company are handled in accordance with the Corporate Governance Best Practice Principles ,shall be submitted by the chief internal auditor to the Board Chairperson for approval and to evaluation and review at least once a year.

    The purpose of internal audits is to assist the Board of Directors and managers in inspecting and reviewing defects in the internal control systems, measure operational effectiveness and efficiency, and to make timely recommendations for improvements to ensure the sustained operating effectiveness of the systems and to provide a basis for review and correction.

    Implement self-monitoring to strengthen the system

    The Department shall implement regular auditing based on the annual audit plan, which is passed by the Board of Directors and based on the identified risks‭. ‬The Department shall also implement special audit plans separately based on actual needs‭. ‬After implementing each audit‭, ‬the Department shall present the audit reports and follow-up reports‭, ‬and submit them for review by the Audit Committee before the prescribed statutory date‭. ‬The officer of the Department shall attend and deliver a report on the situation of each audit plan to a regular board meeting‭.‬

    The Department shall supervise all internal departments and subsidiaries to conduct self-assessments‭  ‬once a year and implement‭ ‬the company’s self-monitoring mechanism‭. ‬The Department shall adjust the design and implementation of the internal control system in a timely manner in response to changes in the environment.The Departments shall review the self-inspection reports and evaluate the overall efficacy of all internal control systems to serve as the primary basis for the Board of Directors and General‭ ‬Manager to produce Internal Control System Statements‭.‬


    Environmental Management

    Carbon reduction standards were raised in line with the global trends. The Taiwan Financial Supervisory Commission‭ (‬FSC‭) ‬released the Roadmap for the Sustainable Development of Listed Companies in March 2022‭. ‬However‭, ‬WT has already begun GHG inventory development as early as 2018‭ ‬and voluntarily extended the boundaries‭. ‬In 2022‭, ‬the

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    Water Resource Management

    Active implementation and education have achieved remarkable results in water conservation. The water intake at WT’s operating bases in Taiwan are mainly used for circulated water of air conditioners and daily-life water‭ ‬consumed by employees in office areas‭. ‬The water is entirely sourced from the local water companies‭ (‬fresh water‭)

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    Workplace Safety

    Hazards are prevented to create a safe and safe workplace for employees. WT adheres to the occupational safety and health‭ (‬OSH‭) ‬policy of‭ “protecting employees and preventing hazards‭”. ‬It put in place‭ ‬an OSH system pursuant to the provisions of the Occupational Safety and Health Law‭, ‬and appoints OSH managers‭, ‬fire protection

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    Identification of Stakeholders

    The expectations of stakeholders are valued for effective corporate sustainability practices. WT continues to involve stakeholders to ensure a communication and response mechanism is in place for sustainability issues‭. ‬WT‭ ‬followed the principles of AA1000‭ ‬Stakeholder Engagement Standard‭, ‬which are‭  ‬impact‭, ‬materiality‭, ‬inclusivity‭, ‬and responsiveness‭, ‬to identified key stakeholder groups‭.

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