Corporate governance organizational structure

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Corporate governance organizational structure

Board of Directors

  • Quanta's Board of Directors is one of two main units in corporate governance structure. According to the Company's regulations, five to nine directors are in the Board of Directors. Shareholder director nomination is adopted as the electoral system, and directors shall be elected from the nominators. There are seven seats of directors (including three independent directors) in the current term, and the Audit Committee is established; these three independent directors serve as ex officio member performing Board of Supervisors' duties. The aggregate shareholding percentage of all of the directors of a securities firm shall comply with the laws and regulations.
    Quanta's liability insurance covers all the directors, and the insurance information shall be presented in the Board of Directors. All current members of the Board of directors possess abundant corporate management and academic experience; most of them are still engaging in relevant professional fields. In accordance with the regulations of "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies", they shall participate in relevant training programs and obtain its certificates.
    The three independent directors are: Wei-Ta Pan - Ph.D. and President of Soochow University, Pisin Chen - Ph.D. and Professor of National Taiwan University, and Mr. Hung-Chin Li - person of professional accounting background. The board convenes meetings at least once a quarter, and a total of 9 meetings were held in 2019. Major resolutions made during board meetings are disclosed on Market Observation Post System and the Company's website.
    Quanta has established a set of board meeting conference rules based on "Regulations Governing Procedure for Board of Directors Meetings of Public Companies" to enforce sound corporate governance, supervision and administrative practices. Board of Directors' occupational competency and operations shall comply with relevant regulations and laws, and they shall supervise company's managers and be responsible for corporate overall business operations. If any resolution involves the interests of Directors or of the Company, responsible directors shall follow the principles of interest avoidance, avoiding according to law stipulation and no vote shall be taken, to protect the interests of the Company and its shareholders.
    In 2019, the Company implemented a set of "Standard Operating Procedures for Resolving Directors' Requests" based on "Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers" with the approval of the Audit Committee and board of directors, and appointed a corporate governance officer whose main responsibilities are to: provide directors with the information needed to perform duties, assist directors in compliance, board meeting and shareholder meeting affairs, and ensuring compliance of shareholder meeting and board meeting with laws and corporate governance code of conduct. The Company also implemented "Board of Directors and Functional Committee Performance Evaluation Policy" toward the end of the year, which requires board performance and functional committee performance to be evaluated using appropriate assessment indicators at the end of each year. Performance evaluation is due to be completed before the end of the first quarter the following year to ensure that the board functions according to regulations. The 2019 assessment was completed in the first quarter of 2020, and the outcome of which was reported to the board of directors at the end of March 2020. The scope of assessment covered the board, individual directors and functional committees; the methods of assessment involved board self-assessment, director self-assessment, Audit Committee self-assessment and Remuneration Committee self-assessment.
    Audit report and tracking report are prepared by the chief auditor; once approved, they are presented to each independent director for review before the end of the month following the audit. Independent directors may contact the chief auditor at any time if they require further insight into the audit progress or wish to follow up on certain outcome. The chief auditor is present at board meetings to report and discuss audit-related issues.

Audit Committee

  • The Audit Committee is another key unit in Quanta's corporate governance framework. On March 31, 2016, the board of directors approved a set of "Audit Committee Foundation Principles" that oulines the purpose of the Audit Committee as well as its supervisory duties over fair presentation of financial statements, appointment (dismissal), independence and performance of financial statement auditors, effective implementation of internal control, compliance with laws and rules, and control over existing or potential risks. In addition to reviewing annual business reports, financial statements and earnings appropriation proposals and issuing audit reports, the chief auditor also engages CPAs and audit personnel in necessary communication to gain insight into the Company's audit policies and procedures. The chief auditor participates in and performs necessary reviews on critical work tasks.
    The 1st Audit Committee was assembled on June 24, 2016 to replace supervisors. The Audit Committee comprised three independent directors, who elected Wei-Ta Pan to serve as convener and meeting chairperson. The 2nd Audit Committee was re-assembled on June 21, 2019 following a director re-election. The three new independent directors, namely Wei-Ta Pan, Pisin Chen and Hung-Chin Li, succeeded as members of the committee while Mr. Wei-Ta Pan continued his role as committee convener and meeting chairperson. The new independent directors have been appointed to serve a term of three years from June 19, 2019 until June 21, 2022, which coincides with terms of the current board of directors. The committee convened a total of 6 meetings in 2019.

Internal control

  • Quanta has designed and established its internal control system under the approval of the board of directors and in accordance with "Regulations Governing Establishment of Internal Control Systems by Public Companies" after taking into consideration the Company's overall business activities. The internal control system exists to support business operations and to provide reasonable assurance over matters such as operational result, efficiency, reliability of financial report and compliance.
    An Audit Team has been established according to regulations to oversee effectiveness and completeness of the internal control system. Supervision and audits are conducted on an ongoing as well as case-by-case basis. The Audit Team devises its audit plan on a yearly basis and seeks board of directors' approval before execution. All audit reports are subject to review and approval of the Audit Committee. Any defects discovered over the course of audit are followed up and improved upon until rectified. The chief auditor is invited to report execution of audit tasks and present summaries of audit report at board meetings. Owing to Quanta's robust internal control practices, no major defect concerning the Company's internal control was found in 2019.

Remuneration policy

  • Quanta adopts a performance-driven compensation policy. Compensation to senior managers is directly related to economic performance and indirectly related to environmental or social performance. For more detailed disclosure on managers, please refer to Chapter Three. Corporate Governance Report of the annual report of Quanta Computer lnc.

Remuneration Committee

  • Remuneration Committee members:
  • The Remuneration Committee comprises three members; its current members include Mr. Wei-Ta Pan, Mr. Wei-Bin Li and Mr. Hung-Chin Li, with Mr. Wei-Ta Pan serving as convener and meeting chairperson for the committee.
  • Operation of the Remuneration Committee:
  • On August 31, 2011, the BoD approved the “Remuneration Committee Charter” in accordance with relevant regulations. Tenure for the Committee is the same as that of the Board of Directors.
  • The Committee shall exercise the due care of a good administrator to faithfully perform the following duties and present its recommendations to the Board of Directors for discussion:
  • Establish and periodically review the performance evaluation and the policies, systems, standards, and structure for the remuneration for Directors and management personnel.
  • Periodically assess and determine the remuneration and compensation of Directors and management personnel.
  • The 1st Remuneration Committee was established on September 30, 2011 and three terms have passed since. The 4th committee was appointed to accompany the newly elected BoD on July 12, 2019. The tenure is for three years from July 12, 2019 to June 20, 2022, the same termination date as the end of the BoD term. A total of three committee meetings were held in FY2019.

Establishment of Internal Audit Officer

  • The Audit Committee and the Board of Directors resolved on May 14th, 2019 to appoint Ms. Tracy Li, associate vice president of the legal department, as the new internal audit officer and to establish “A Standard Operational Protocol for Responding to Requests from Directors” in accordance with “Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers.” Key responsibilities of the newly appointed internal audit officer include provision of information required for the directors to perform their duties; assistance in the directors' compliance of law; handling of matters relating to Board of Directors meetings and shareholders’ meetings in compliance with law; assurance of the operations of shareholders’ meetings and Board of Directors meetings in compile with relevant laws and corporate governance.

Participation in training is as follows:

    Internal Audit Officer: Tracy Li
    Date Organizer Course
    2020/04/28-
    2020/04/29
    Securities and
    Futures Institute
    Practical Training for Novice Directors and Supervisors, including Independent
    Directors, and Internal Audit Officers (12 hours):
  • Skills of Reading Financial Statement for Directors and Supervisors
  • Exercising Duties of Directors and Supervisors for Listed Companies and OTC
    Companies
  • Legal Issues That Directors and Supervisors of Public Companies Should Pay
    Attention To
  • The Operation of Corporate Governance and Board of Directors
  • 2020/04/22 Securities and
    Futures Institute
    Issues on Human Resources Management and Business Integration in the Process of Corporate Mergers and Acquisitions (3 hours)
    2019/08/07 Securities and
    Futures Institute
    2019 Seminar on Legal Compliance of Insider Share Trading For Listed Companies
    and Unlisted Public Companies (3 hours)