Diversification of the Board of Directors and Succession Planning Operations

In the "Election Methods of Directors", it clearly stated that the composition of the board of directors should consider diversification, and formulate appropriate diversification policies in accordance with its own operation, operation type and development needs, including but not limited to the following two major standards :
1. Basic conditions and values: gender, age, nationality and culture, etc.
2. Professional knowledge and skills: professional background (such as law, accounting, industry, finance, marketing or technology), professional skills and industry experience, etc.

The members of the board of directors should generally have the knowledge, skills and literacy necessary to perform their duties, and their overall capabilities are as follows:
1. Operational judgment ability.
2. Accounting and financial analysis capabilities.
3. Operation and management capabilities.
4. Crisis handling capabilities.
5. Industrial knowledge.
6. International market outlook.
7. Leadership ability.
8. Decision-making ability.
9.Knowledge and Skills in Risk Management.

The Company’s 10th Board of Directors currently consists of six directors, including three independent directors, representing 50% of the Board. All directors are serving consecutive terms, with tenures ranging from 3 to 4.5 years.

Among the current Board members, two are female directors, accounting for 33.3% of the Board. In terms of age distribution, one director is aged 61–70, two are aged 51–60, two are aged 41–50, and one is aged 31–40.

The industry experience and professional expertise of each director are as follows:

·        Director Shih-Fang Liao: Technology, Construction Engineering, Business Management

·        Director Hung-Chun Lin: Technology, Business Management

·        Director Yu-Chun Shen: Finance and Accounting

·        Independent Director Shih-Tung Lu: Education, Economics, Civil Engineering, Business Management

·        Independent Director Chun-Yi Chou: Finance and Accounting

·        Independent Director Chin-Han Chen: Law

The Board members possess diverse professional backgrounds, enabling them to contribute to Board decision-making from different professional perspectives. The composition of the Board also meets the Company’s governance objective that more than 50% of directors possess practical business management experience.

In response to global trends in gender equality and to promote gender diversity, the Company places emphasis on balanced gender representation in the composition of the Board. In the current Board, male directors account for 66.7% (four members) and female directors account for 33.3% (two members). The Company plans to further increase the proportion of female directors in the future in order to enhance gender equality and strengthen the diversity of decision-making.

Regarding succession planning for the Board of Directors, all directors of the company possess expertise in enterprise management and operations. The future structure of the Board of Directors and the background of its members will largely continue the current framework. Furthermore, the board already includes directors from the younger generation, and the transfer of decision-making experience is underway. For director training, the company arranges at least six to twelve hours of advanced courses annually for each director, enabling board members to acquire new knowledge. Additionally, board members undergo performance evaluations annually, and the results serve as a reference for selecting or nominating directors and for determining their individual compensation. As for independent directors, by law, they must possess work experience required in business, legal, financial, accounting, or company operations. There is no shortage of relevant professionals domestically, so the succession of independent directors will be planned with professionals from various fields as the guiding direction.

In terms of succession for important management levels, the company simultaneously focuses on talent acquisition, retention, and development. Through various project assignments, management skills are cultivated to develop well-rounded management talent. Management is also encouraged to participate in professional training courses to continuously absorb new knowledge and enhance their professional capabilities. The Compensation Committee regularly evaluates the compensation of management personnel and continuously cultivates successors for important management positions.