In line with our brand spirit “We are family,” our corporate mission “to protect and to create,” and our core values of “caring, professionalism, and trustworthiness,” CTBC is committed to strengthening its corporate governance to ensure the Company’s sustainable development. CTBC is also continuing to improve its board performance and information disclosure in order to protect the interests of all stakeholders.
Shaping Corporate Governance Culture
When it comes to implementing corporate governance, CTBC places great importance on team building. After the Board of Directors formulates a policy, each department institutes a hierarchical system of responsibility specifically tailored for the task at hand. The goal here is to instill a culture of corporate governance from the top down. A full-time corporate governance officer reports directly to the Office of the Chairman, and a corporate governance unit is charged with overseeing the corporate governance and integrity of company operations. Both assist the Board of Directors of the Financial Holding, and every subsidiary thereunder assists in promoting a comprehensive corporate governance structure.
Separating Ownership and Management
CTBC began separating management from ownership in 2007. This means directors can no longer serve on the Board while concurrently holding a managerial position. Key business proposals and objectives devised by the management team can be implemented and executed only after deliberation and approval by the Board of Directors. In addition, the Board is held responsible for supervising the management team—from adhering to business plans to meeting scheduled business targets.
More Independent Board Directors
In 2016, to strengthen the independence and diversity of the Board of Directors and its members, CTBC adjusted the composition of the Board, reducing the number of general directors from five to three. Currently, of the Board’s seven directors, four are independent directors.
Valuing Director Diversity
We know that in today’s fast-changing economic environment, the financial sector is increasingly complex. That’s why we maintain a Board of Directors with industry-leading expertise, professional experience, and renowned diligence. When searching for a new director, we seek only candidates with diverse backgrounds who possess international experience, broad perspectives, strong leadership, and effective communication skills.
All seven of CTBC’s current directors boast a diverse educational background and experience, with each having specialized business experience in a major financial institution such as a bank, insurer, or securities firm. Regarding gender equality, CTBC subsidiary Taiwan Lottery at present includes two female directors.
Four Functional Committees
Four functional committees currently operate under the Board of Directors: the Audit Committee, Remuneration Committee, Risk Management Committee, and Nomination Committee, which was newly established in 2016. The Audit and Remuneration Committees comprise four and three independent directors, respectively, while the Risk Management and Nomination Committees both have one director and two independent directors.
A More Functional and Efficient Board
To strengthen the administrative process for Board meetings, CTBC adopted a Web-based system in 2012, comprehensively integrating the overall administrative meetings process into an online submissions system. The benefits of this approach include more convenient supervision, reduced human resource needs, and less wasted paper and other stationery.
All directors must satisfy an annual further education requirement of 6 hours (pursuant to the provisions of the Main Points for Further Education of Directors and Supervisors of Listed Company). Furthermore, CTBC conducts a performance assessment of the Board of Directors every December. Regarding assessment measures, external evaluations of the Board’s performance is carried out every three years so as to ensure the quality of our internal assessments.
In addition, each Board director performs self-assessment exercises, with the results categorized as either excellent, great, good, OK, or to be improved. The corporate governance unit is tasked with reporting the assessment results to the Board of Directors and suggesting specific areas for improvement. In 2016, the result of the Board of Directors’ self-assessment was “excellent”; the assessment method and results may be found here.
Communication Between Independent Directors, Internal Auditors, and CPAs
The independent directors communicate with internal auditors and CPAs every six months. The major issues discussed include audit methodologies, the key results and findings of completed audits, and the annual financial report. Additional matters considered are, among others, internal and external audit reports, the implementation of internal controls, and the execution of follow-up audit-related activities.
Effective Information Disclosure
We are committed to maintaining an open and transparent disclosure policy when it comes to company information. That’s why we provide easy access to all publicly required information on our website, which is available in both English and Chinese. Information released online includes financial reports, annual reports, and documents relating to CTBC’s corporate governance and corporate social responsibility initiatives. In 2016, a total of four investor conferences were held.
Better Communication, More Transparency
CTBC attaches great importance to the rights and interests of every party with an interest in our business. As such, a regularly updated Shareholder Information section is readily available on this website. Through open, effective communication about matters including the expectations and demands of interested parties, questions and concerns regarding issues such as corporate social responsibility are not just noted but listened and responded to. This transparency has been bolstered further by the recent institution of a whistleblower channel.
To foster integrity and ensure that it is rightly valued as a critical part of banking operations, CTBC has stipulated a number of guidelines, protocols, and codes for employees. These include the Code of Integrity Operation, Procedures for Ethical Management and Guidelines for Conduct, Corporate Governance Best Practice Principles, Codes of Ethical Conduct, Employee Code of Conduct, and Code of Corporate Social Responsibility.
In addition, company integrity reports and related progress updates are presented to the Board of Directors every six months.
Through educational training and internal outreach by the corporate governance unit and via the audit and internal control mechanism, personnel throughout all levels of the Company develop a comprehensive understanding of CTBC’s prioritization of integrity in decision-making—and of the consequences of behavior violating our ethical standards.
Key Governance Awards in 2016
CTBC was ranked in the top 5% of companies in its second TWSE corporate governance evaluation, and was again included in the TWSE Corporate Governance 100 Index.
CTBC was selected as a constituent stock in the 2016 DJSI Emerging Markets Index.
CTBC was included in the MSCI Global Sustainability Indexes.