Item

Operating Status

1. Stockholding structure and shareholders’ equity

(1) Does the financial holding company institute a set of internal operational procedures for handling shareholder proposals, doubts, disputes, and suits, as well as act in accordance with the said procedures?

(2) Does the financial holding company have access to the identity of major shareholders who have actual control over it as well as that of their ultimate control persons?  

(3) Does the financial holding company establish and implement risk control and management as well as firewall mechanisms for its dealings with affiliated businesses?

  

 

(1) The Company makes itself accessible to shareholders either by phone or by email. Designated personnel are responsible for handling shareholders’ proposals or complaints, which will be passed on to management when necessary. 

(2) In addition to the list of shareholders after stock registration, the Company keeps close track of their stockholdings by drawing from their own reporting in accordance with the Financial Holding Company Act and insiders’ monthly reports of stockholding changes. A special section is set aside on the Company’s website for downloading of the needed application forms.

(3) The Company has laid down a set of guidelines over risk management. Of these is a package that regulates transactions between the Company or its subsidiaries and related parties, such as lending and endorsement, to avoid conflicts of interest. A firewall mechanism has also been installed to regulate joint operations or transactions involving the WFH Company and its subsidiaries. Also meant to avoid conflicts of interest, it applies to any collaboration in business endeavors and common use of information, equipment, business space or personnel, as well as cross-selling of financial products. A separate set of guidelines is enacted to preserve information security at the Company’s meetings attended by affiliated enterprises.

2. Composition and duties of the Board of Directors

(1) Besides setting up the Compensation Committee and Audit Committee according to law, does the financial holding company voluntarily set up other functional committees? 

(2) Does the financial holding company evaluate the independence of its CPA on a regular basis?

  

 

 

(1) The Company has established the Compensation Committee and Audit Committee according to law. In accordance with its Articles of Incorporation, however, the Company has set up the Management and Development Committee as a supportive unit to the board of directors.

 (2) In accordance with the Corporate Governance Best Practice Principles for Financial Holding Companies, the Company evaluates the independence of its CPA on a regular basis (at least once a year). The findings are then presented to the Audit Committee and Board of Directors. In the highlight are an evaluation form and a statement on CPA impartiality and independence drafted in accordance with the Bulletin of Norm of Professional Ethics for Certified Public Accountant (No. 10): Integrity, Objectivity and Independence. To date the Company has identified no compromise of independence that warrants penalties and thus there is no need for replacing its CPA. 

3. If the financial holding company is listed in the TWSE/TPEx, is there a designated person on a full-time (part-time) basis appointed to administer corporate governance (including but not limited to providing information for the directors and supervisors necessary for the performance of their duties, coordinating Board meetings and Shareholders’ Meetings and related matters, company registration and registration for making change, preparation of minutes of Board Meetings and Shareholders’ Meeting on record)?

 

(1)The Company has established Corporate Governance Best Practice Principles for Financial Holding Companies to build up an effective framework for corporate governance, vitalize the function of the Board and protect the rights of shareholders.

(2) The Company has set up Corporate Governance Department under President in March 2019, which coordinates Audit Committee meetings, Board meetings and Shareholders’ Meetings. It also performs the function of corporate governance and is responsible for assisting the continuing education and supply of information necessary for the directors in performing their duties and ensuring their immediate awareness of substantial events, coordinating meetings for the Board and Shareholders at regular intervals as required by law, making company registration and registration for making changes, and preparing minutes of Board Meetings and Shareholders’ Meetings on record. Legal advisors and Compliance & Legal Department also provide directors with all sorts of legal information that help them abide by related regulation.

4. Does the financial holding company have in place channels for communicating with related parties (including but not limited to shareholders, employees, and customers)?

 

(1) The Company makes public financial and operational information and announces other material information on its own website and the Taiwan Stock Exchange’s Market Observation Post System.

(2)The Company’s website includes a special related parties section that lists telephone and fax numbers and email addresses for use by business partners, shareholders, and other related parties.

(3)A spokesperson and an acting spokesperson are appointed to facilitate communication with interested parties.

(4) All the major subsidiaries have set up their respective customer service hotlines to respond to inquiries and questions.

5. Information disclosure

(1) Does the financial holding company build a website for disclosing information on finances, operations, and corporate governance? 

(2) Does the financial holding company resort to other means of information disclosure (such as building an English website, designating personnel to collect and disclose material information, appointing a spokesperson to communicate with the general public, and making public the recordings of investor briefings on its website)?

 

(1)The Company has built a website to disclose monthly revenue and earnings; consolidated quarterly results reviewed or audited by an attesting CPA; important internal regulations; and other information related to corporate governance. Designated personnel are charged with the website.

(2) The Company’s website is presented in both Chinese and English, and linked to Taiwan Stock Exchange’s Market Observation Post System for the release of unaudited monthly earnings or losses and other material information, of both the Company and its subsidiaries. In addition, a spokesperson and an acting spokesperson are responsible for relaying important messages of the Company to the general public. Designated personnel are given the duty of collecting and disclosing material information.

6. Is there other important information that can facilitate better understanding of the financial holding company’s corporate governance practices (including but not limited to employee rights and interests, employee welfare, investor relations, rights of interested parties, training records of directors and supervisors, implementation of risk management policy and risk evaluation criteria, implementation of customer relations policy, purchases of insurance for directors and supervisors, and donations to political parties, stakeholders, and public interest organizations)?

 

 

(1) Employee rights, employee welfare, investor relations, and rights of related parties:

As dictated by law, all employees of the Company and its subsidiaries are entitled to national health insurance and labor insurance. On top of employees`; compensation by their performance and corporate earnings, employees will receive a year-end compensation by their performance. Employee rights are spelled out in the Labor Standards Law. There are clearly defined internal regulations with regard to providing employees with incentives for pursuit of self-improvement and acquisition of certificates of specialized competence. Multiple channels are made available for employees to express themselves, thereby fostering a harmonious labor-management relationship.

Building on friendly relations with customers, all subsidiaries have set up their respective hotlines and email to better promote customer relations. Standardized contracts are drawn out by patterning after government models, and clients are always given a legally required period to scrutinize them. Likewise, the Company makes itself accessible to shareholders either by phone or by email. Designated personnel are responsible for handling shareholder proposals or complaints.

The Company has a frequent need to deal with banks and other financial institutions. Alongside various internally approved documents, detailed, truthful financial and other pertinent information is always provided as it is called upon to sign contracts on general lending or call loans. When necessary, collateral is also provided to better protect banks or other creditors.

The Company makes it a point to honor and protect the legitimate rights and interests of its investors. In order to maximize shareholder interests, it gives top priority to honesty and credibility in every aspect of business endeavors.

(2) Training records of directors:

The Company’s directors, who possess the expertise needed to perform their duties, make it a point to undertake self-enhancement programs from time to time. Upon learning of courses on corporate governance, the Company regularly holds training sessions, and passes related information on to directors and supervisors irregularly. In addition, the Company has reported the directors’s training records on the Market Observation Post System. For more information please refer to the P. 55~57.

(3)Implementation of risk management policy and risk measurement: Please refer to the P. 155~176.

(4)Implementation of customer relations policies:

In accordance with the Financial Holding Company Act and pertinent regulations, the Company and its subsidiaries have taken measures to protect the confidentiality of customer data and signed contracts intended to uphold customer rights and interests. The disclosure, transfer and common use of customer data are undertaken in tandem with the Regulations Governing Cross-selling Among Subsidiaries within Financial Holding Company and other directives from the regulatory authority. The Company also has in place a set of internal guidelines on cross-selling by its subsidiaries.

Furthermore, all subsidiaries have launched hotline and email services so that customer complaints, if any, can be dealt with in a timely fashion.

(5) Purchases of insurance for directors:

The Company has taken out liability insurance for directors and key staff members, providing them with a hedge against risks that may arise as they exercise their rights and perform their duties.

(6)Donations to political parties, interested parties and charitable groups:

WFH donations in 2018:

Recipient

Amount (NT$)

Waterland Charity Foundation – Donation for Hualien earthquake disaster relief

1,000,000

Cross-Strait CEO Summit

100,000

7. Explain the status of the improvements made in response to the most recent annual assessment results published by the Corporate Governance Center of the Taiwan Stock Exchange Corporate, and propose priority improvement items and measures for matters that have not yet been improved.

For the 4th Annual Evaluation of Corporate Governance (Year of assessment: 2017): The Company is evaluated between 6% to 20% of the total companies evaluated. In future, the Company will appoint the dedicated governance staff, improve the disclosure in English, and enhance the quality of disclosure for the non-financial information, for the purpose of improving the performance of the corporate governance. For the 5th Annual Evaluation of Corporate Governance (Year of assessment: 2018): The Company is evaluated between 21% to 35% of the total companies evaluated. The Company has set up Corporate Governance Department with Chief Governance Officer and staff on the first half of 2019. In the future, the Company will follow the governance trend of the competent authority, formulate relevant governance system, including a standard procedure to fulfill directors’ request, independent directors sitting over 50% in remuneration committee, and enhance English information disclosure, in order to comply with the requirement from competent authority, and elevate the Company’s capacity for corporate governance.