To ensure effective corporate governance, we establish governance framework and comply with laws and regulations. Our board is the highest governing body to oversee all decisions, ensure transparent guidelines and policies are in place, and to protect the rights of our stakeholders. We also have whistleblower hotline to strengthen our corporate governance. In 2020, we ranked in the 51%~65% among the listed companies for the Corporate Governance Evaluation.
Board of Directors
The Board of Directors is the highest governing unit. Our Board consists of 9 directors of which 3 are independent directors, a 33% representation. The meetings are held quarterly to discuss the operational strategies and future developments.
The directors are nominated for board election every three years. To strengthen the independence and diversification, our board members come from a wide array of backgrounds, including management, material industry, finance, agriculture and business laws, and providing expertise in their area of specialty to optimze the operational decisions. Gender equality and fair opportunity to participate in the various decision making roles at our company, we currently have three female directors. The board held 8 meetings in 2020 with an average attendance rate of 88.9%.
The board of directors has a major influence on operational decisions; therefore, the board practices conflict of interest avoidance act stringently. Our Board of Directors is covered with Directors and Officers Liability Insurance to reduce the risks of being sued while managing the company to raise the effectiveness of our directors.
Our company establishes an Audit Committee Charter, implemented by three independent directors, which defines the following functionalities： assist and monitor, supervise the execution of operational strategy, assess and review the adequacy of the financial reports, provide internal control audits and risk management. A meeting is held at least once each quarter. In 2020, a total of 7 meetings were held with an average attendance rate of 91.6%.
Remuneration committee objectively evaluates the adequacy of compensation system for the board of directors, and managing officers against their key performing indicators, company financial status, operational performance and any foreseeable risks to offer opinions and recommendations to the board. The committee consists of two independent directors and one external expert. There were two meetings held in 2020 with an average attendance rate of 100%.
Performance Evaluation of the Board of Directors and the Functional Committee Members
To implement corporate governance and increase the functionality of the Board, we establish the performance goals to strengthen the operational efficiency. An annual performance evaluation is conducted for the board, the directors, and the functional task force members. In December 2020, the board members and the task force members conducted self-assessment and cross-evaluation. The evaluation criteria used were based on job responsibilities, operational involvement, decision quality, job duties, and member nomination for the elections. The secretary office compiles the assessment results and reports to the board for improvements and recommendations.
Ethics and Integrity
Within our company’s “Governance Code of Conduct”, “Integrity Code of Conduct” and “Ethics Code of Conduct”, the rules and principles are clearly defined. We adhere and follow the principles of fairness and transparency in all business transactions. It is expected that all employees must not accept bribery while planning or executing operational decisions, corruption and other dishonest acts are also prohibited. In addition, we have signed the Integrity Agreements with our business partners to significantly reduce any forms of corruption and bribery. Furthermore, we also made relevant announcements via internal platform and emails to our employees to inform and educate them about the importance of ethics and integrity. Market Observation Post System (MOPS) and annual reports fully disclose the implementation and effectiveness of business integrity at our company. In 2020, there was no corruption, dishonesty, and no antitrust incidents.
❶ The company website and the CSR link offer different channels of communication, the dedicated mailbox and direct line, for the stakeholders to contact us. The company also provides a designated mailbox for the whistleblowers. Moreover, a whistleblower protection program is in place which protects the whistleblower’s identity and tracks the progress of the concerned issues.
❷ Protecting employees’ rights and offering a workplace free of sexual harassment, we have dedicated complaint hotline. There was no incident reported in regards to the violation of employees’ rights or sexual harassment in 2020.
Management and Operation of Internal Control
Through the “Internal Control System and Guidelines”, all business units performed self-assessment in the following five areas： control environment, risk assessment, control procedures, information and communication, and monitoring procedures in the 8 business cycles as prescribed in the“Regulations Governing Establishment of Internal Control System”, Information Security, and the other operating procedures. The internal audit team assisted the Board and the managing officers in monitoring, evaluating, assessing the operational efficiency and making sure that control activities were implemented and effective.
Moreover, the internal audit team uses the risk assessment findings to draw up the annual audit plan, evaluates any deficiency, and performs follow-ups to ensure that all necessary corrective actions were taken. The audit team then reports regularly to the Audit Committee and Board of Directors on its reviews and evaluations. In 2020, there were 45 audit reports which 5 of the reports required followups. Each year, the internal control auditors participate in various training programs to enhance their knowledge and capabilities in the area of audit. The total hours of training in 2020 was 84 hours, which complied with the regulation.