The Board of Directors is WT’s highest governance body. The Board of Directors are mainly responsible for monitoring the achievement of the Company’s operational goals and performance, providing strategic guidance to the management team, and overseeing the Company’s compliance with laws and regulations to ensure the best interests of its shareholders. In order to optimize the quality of the Board’ decisionmaking, there are a number of functional committees with different competence under the Board to effectively review the Company’s decisions on important issues and supervise their implementation.
In addition to the Corporate Governance Best Practice Principles, WT has a diversity policy to meet the needs of the Board’s operational and developmental functions, while taking into account the Directors’ professional knowledge and skills. Directors are elected at the shareholders’ meeting in accordance with the Rules for Directors Election. There were three functional committees under the Board: Audit Committee, Remuneration Committee and Risk Management Committee. In order to optimize and improve the Board’s functions and strengthen the management mechanism, WT began appointing a corporate governance supervisor in 2019 to handle matters relating to the Board meetings and shareholder meetings, assist the Directors in their orientation, continuing training, duty performing, and compliance with laws and regulations. For details, see Implementation of Corporate Governance in 2023.
Independent directors making up half of the Board Enhance the Independence of the Board of Directors
The Company’s Chairman concurrently serve as President to improve operational efficiency and the execution of decisions. In 2023, an additional Independent Director was by-elected as the eighth member of the Board by the annual shareholders meeting to strengthen the Board’s supervisory function. For the implementation of the Board Member diversity policy, see the Corporate Governance section (Organization and Responsibilities of the Board of Directors) of the WT official website. The Board of Directors meets at least once a quarter. In 2023, the Directors’ in person attendance rate at the 15 Board meetings was 94% , and the Independent Directors’ was 100%. Items falling into the nine types of matters specified in the Rules of Procedure for Board of Directors’ Meetings were submitted to the Board for discussion, including operating plans, financial reports, internal controls, chairman selection, fundraising, issuance of securities with equity nature, and other matters required by laws and regulations. A total of 55 major resolution were adopted in 2023. See Major Resolutions of Board Meetings under the Corporate Governance section for details.
To reduce the possibility of conflicts of interest between the Chairman and the other Directors, WT discloses information including the content of the items, the names of the interested Directors, and reasons for recusals in the annual reports, as required by Article 15 of the Rules of Procedure for Board of Directors’ Meetings. In addition, in compliance with the requirements of Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board’s Exercise of Powers, at least half of the Board Members are Independent Directors, and more than half of them are neither employees nor executives. Every year, WT arranges for each Director to attend professional director courses provided by external organizations such as Taiwan’s Securities and Futures Institute to improve the Board’s operational effectiveness. To implement corporate governance, Independent Directors may provide input and make suggestions in each functional committee for the Board’s information. In addition, information such as the existence of controlling shareholders and related party transactions is disclosed in the annual reports.
For detailed information on the members of the Board, the Audit Committee and other functional committees in 2023, including their age range, experience, tenure, concurrent positions in other companies, as well as relevant information on their Board meeting attendance rate, continuing education status, and recusals record, see Chapter 3: Corporate Governance Report of WT’s 2023 Annual Report for the description of implementation status of recusals of Directors.
Audit Committee members are hands-on with 100% attendance
The Audit Committee is composed of all Independent Directors. With one Independent Director byelected in 2023, there are currently four Committee members, with Kung-wha DING serving as the convener and chairman. The Committee meets at least once every quarter. The accountant must communicate fully with the Independent Directors on audit planning, audit, and audit results. The Internal Auditing Officer presents the implementation status and other matters to the Audit Committee at every non-emergency meeting. In 2023, a total of fourteen Audit Committee meetings were held with all members having a 100 percent in-person attendance rate. For detailed information, see the Operation of the Audit Committee in 2023.
Improved executive compensation management system Establish the Regulations Governing the Share Ownership of the CEO and Non-Executive Directors
The Remuneration Committee is composed of three Independent Directors. The purpose of the Committee is to take into account the Company’s operational performance, make objective and professional recommendations to the Board, and assist the Board in implementing and evaluating the Company’s overall compensation and welfare policies. In addition, the remuneration of directors and executives 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 2023, a total of four Remuneration Committee meetings were held with all members having a 100 percent in-person attendance rate. For detailed information, see the Operation of the Remuneration Committee in 2023.
The Regulations Governing the Share Ownership of the CEO and Non-Executive Directors in 2023 to encourage the CEO and non-executive Directors (excluding Independent Directors) to hold an appropriate amount of the Company’s stocks for a long period, so that their performance could be consistent with shareholders’ interests and they could share the Company’s operating results with shareholders.
In 2023, the General Manager’s total annual pay (NT$23,400,000) was 19.8 times of the median
(NT$1,180,574) of that of the employees (excluding the General Manager) who have worked for more than six months in 2023 at the Taiwan headquarters and the four subsidiaries including Morrihan, Nuvision Technology, Maxtek Technology, and Techmosa. The General Manager’s pay increase from 2022 to 2023 was -71.6 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 2022 and 2023 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 2022 or departures in 2023), and the absence of remuneration increase data for the new hires in 2023.
Two new committees, both with more than half of the members being Independent Directors
The Sustainable Development Committee was established in November 2023 to supervise and manage the implementation of sustainable development. At least three of the Committee members shall be appointed by the Board, and more than half must be Independent Directors. The Committee currently has five members. They are the Chairman, one Director and three Independent Directors. Its first convener and chair is Director Kerry Hsu. There are two functional groups under this Committee: Sustainable Development Team, headed by Chief Sustainability Officer Willie Sun, and Risk Management Team, headed by Chief Financial Officer Cheryl Yang.
The Nominating Committee was established in November 2023 to assist the Board in developing and managing human resource strategies for Directors and senior executives through fair and transparent procedures. At least three of the Committee members shall be appointed by the Board, and more than half must be Independent Directors. The Committee currently has three members. They are the Chairman and two Independent Directors. Its first convener and chair is Chairman Eric Cheng.
Board and functional committee performance assessment
WT has formulated the Rules for Board of Directors Performance Assessments in 2016, which clearly stipulates that the Board shall be evaluated at least once a year, and its performance must also be assessed once every three years by an external professional independent institution or an external team of experts and scholars. The assessment results must be reported to the Board, and be used as a reference to determine individual directors’ remuneration payment and nomination for the Board re-election.
In 2023, Taiwan Institute of Ethical Business, an external professional institute, was commissioned to assess the Board’s performance. 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 with the Directors in four major aspects. The assessment concludes with two specific recommendations: 1) Increase the Independent Directors’ understanding of the operations of overseas subsidiaries and deepen their interaction with the executives; 2) Continue to implement the Company’s sustainable management goals. The internal and external assessment results were discussed at the Board meeting on February 16, 2024, which agreed to optimize WT’s corporate governance implementation by making the recommended improvement. For detailed information, see The implementation of external board performance evaluations.
Rigorous internal auditing to ensure integrity and objectivity
In WT, the Internal Audit Department is an independent unit under the Board. The appointment and dismissal of the Company’s internal audit supervisor are approved by the Audit Committee and passed by the Board. The appointment, dismissal, evaluation, review, salary, and compensation of internal auditors are handled in accordance with the Corporate Governance Best Practice Principles, and shall be submitted by the internal audit supervisor to the Board Chairperson for approval. The internal auditors are evaluated and reviewed once a year.
The purposes of internal audits are to assist the Board and executives in inspecting and reviewing defects in the internal control systems and measuring operational effectiveness and efficiency, to make timely recommendations for improvements to ensure the sustained operating effectiveness of the systems, and to provide a basis for review and correction.
Self-monitoring to enhance system adaptability
Regular internal audits are performed according to the annual audit plans, which is passed by the Board and based on identified risks. Special audits may be performed on a project basis when necessary. After an audit is concluded, the audit report and followup report are submitted for review to the Audit Committee before the prescribed statutory dates. The audit supervisor shall attend regular Audit Committee and Board meetings to report on the status and results of audit execution.
All internal departments and subsidiaries are to conduct self-assessments once a year and implement the Company’s self-monitoring mechanism. The design and implementation of the internal control system are adjusted in a timely manner in response to changes in the environment. The self-assessment reports are reviewed and approved by internal auditors, and the self-assessment results and audit discoveries provide a basis for the Board and General Manager to produce Internal Control System Statements.
WT has established an internal control system related to the management of financial and non-financial information in accordance with the Regulations Governing Establishment of Internal Control Systems by Public Companies, and has incorporated the preparation of sustainability reports into the internal control system for management. The Company’s management also exercises due diligence to ensure the quality of Sustainability Report.
