Responsibilities and Composition of the Board of Directors

1.Responsibilities of the Board of Directors

We decided on a Board of Directors comprising 7 to 13 members in consideration of the company's scale of business development and major shareholders as well as the need for balanced and practical operations. The Board's main responsibilities are to:

  • Guide company strategy
  • Supervise senior management
  • Be responsible for the company and its shareholders

2.Members of the Board of Directors

We currently have 9 directors, including 4 independent directors.

Title Chairman
Name Jean Liu
Background& Experience Ph.D., Chemistry, Northwestern University
Chairman of YFY Inc.
Notes  
Title Director
Name David Lo
Background& Experience Master of Financial Management, S.C. Johnson College of Business, Cornell University, USA
President of YFY Inc.
Notes  
Title Director
Name Kirk Hwang
Background& Experience Ph.D. in Chemistry and Material Sciences, University of Wisconsin-Madison
Chairman & CEO, Chung Hwa Pulp Corporation
Notes  
Title Director
Name Chin-San Wang
Background& Experience EMBA, Accounting and Management Strategy, National Taiwan University
Independent Director, Taiwan Cement Corporation
Notes  
Title Director
Name Chun-Chieh Huang
Background& Experience Master of Science and Technology Management Institute, National Chengchi University
President and Partner, Huacheng Capital Co., Ltd.
Notes  
Title Independent Director
Name Hsi Peng Lu
Background& Experience Ph.D. in Industrial Engineering, University of Wisconsin - Madison
Professor, Department of Information Management, National Taiwan University of Science and Technology
Notes Chairman of the Audit Committee
Chairman of Remuneration Committee
Title Independent Director
Name Di-Shi Huang
Background& Experience Master of Criminal Justice Management Institute,Oklahoma City University
Deputy Director of the Ministry of Justice Investigation Bureau
Notes Audit Committee
Remuneration Committee
Title Independent Director
Name Yie-Yun Chang
Background& Experience LL.D in University of Munich
Vice Principal, Fu Jen Catholic University
Notes Audit Committee
Remuneration Committee
Title Independent Director
Name Jin-li Hu
Background& Experience Ph.D. in Economic, State University of New York at Stony Brook
Professor at the Institute of Business and Management, National Yang Ming Chiao Tung University
Notes Audit Committee
Remuneration Committee

3.Board diversity policy and implementation

Our board diversity policy
On November 13, 2018, the Board passed a resolution to introduce a Code of Corporate Governance. YFY’s board diversity policy is set out in Chapter 3 (Composition and Powers of the Board), Article 19 of the Code. This includes adopting a candidate nomination system and complying with the company’s Director Election Rules and Code of Corporate Governance to ensure the diversity and independence of board members. None of the directors is a spouse or a relative within two degrees of relationship as required by Item 3 and Item of Article 26-3 of the Securities and Exchange Act. None of the independent directors, their spouses or relatives within the second degree of relationship are directors, supervisors or employees of the Company, its affiliates or companies with specific relationships with the Company and do not hold shares in the Company; nor have they provided commercial, legal, financial or accounting services to the Company or its affiliates in the last two years.

The professional backgrounds of the Board includes industry, management and accounting. The members of our 28th Board of Directors who excel in leadership, operational decision-making, business management and crisis management include directors Jean Liu, David Lo, Kirk Hwang, and Chun-Chieh Huang, as well as accountant Chin-San Wang. Our independent directors include Hsi Peng Lu, Yie-Yun Chang, Jin-li Hu are all university professors; and Di-Shi Huang has expertise in criminal investigation.

Among the members of the Company's Board of Directors, there are two directors with employee status. There are 4 independent directors, 1 independent director has served for 6 years and the other three are all elected as independent directors from 2021. In terms of age, there are 2 directors over the age of 70, 2 directors between the ages of 60 and 70, 5 directors between the ages of 50 and 60.The Company also emphasizes gender equality in the composition of the Board of Directors. The current term of the Board of Directors includes two female members (one of whom is an independent director).

Title Chairman Director Director Director Director Independent Director Independent Director Independent Director Independent Director
Name
Jean Liu David Lo Kirk Hwang Chin-San Wang Chun-Chieh Huang Hsi Peng Lu Di-Shi Huang Yie-Yun Chang Jin-li Hu
Basic Background Information Gender F M M M M M M F M
Also serves as manager N Y Y N N N N N N
Ranges of age 50~60 50~60 >70 >70 50~60 50~60 60~70 60~70 50~60
Professional Background Industry V V V V
Business Management V V V V V V V V
Accounting V
Professional Competence Leadership V V V V V V V V V
Operational Judgments V V V V V
Business Management V V V V V V V V
Crisis Management V V V V V V V
Industry Knowledge V V V V V V V V V
International Market Insights V V V V V V
Risk Management V V V V V V V V V

4.Functional Committees

Audit Committee: Comprising 4 independent directors(Hsi Peng Lu, Di-Shi Huang, Yie-Yun Chang, Jin-li Hu, among them, Hsi Peng Lu is the convener ), our Audit Committee is responsible for monitoring whether the company’s financial statements have been properly presented, selecting and ensuring the independence of the independent auditor, whether the company’s internal controls are being effectively implemented, whether the company is complying with relevant laws and regulations, and whether the company is managing existing or potential risks.

Remuneration Committee: Comprising 4 independent directors(Hsi Peng Lu, Di-Shi Huang, Yie-Yun Chang, Jin-li Hu, among them, Hsi Peng Lu is the convener ) selected by boad reslution, our Remuneration committee is responsible for formulating and periodically reviewing the policies, systems, standards and structures relating to the performance evaluation and remuneration of directors and managers; and determining and periodically reviewing the salaries and remuneration of directors and managers.

Sustainable Development Committee: Comprising 7 directors(Jean Liu- the convener, Kirk Hwang, David Lo, Hsi Peng Lu, Di-Shi Huang, Yie-Yun Chang, Jin-li Hu, among them, (, Jin-li Hu is the Chairman of Taiwan Association of Environmental and Resource Economics, whose functional competency is in environmental sustainable economics and policy.) selected by board resolution, our Sustainable Development Committee is responsible for formulating and periodically reviewing the policies, systems, standards and structures relating to the performance evaluation and remuneration of directors and managers; and determining and periodically reviewing the salaries and remuneration of directors and managers. The Committee is comprised of 7 functional teams which are Environmental Sustainability Team, Responsible Supply Chain Team, Corporate Governance Team, Employee Relations Team, Social Engagement Team, Information Security Team and Risk Management Team. The functional teams convene work meeting every month, Report the schedule for each project to the Board on November 9 and December 28 in 2022, as well as on August 9 and December 22 in 2023, and may accept the recommendations as rolling adjustment.

5. Board of Directors evaluation status: According to "Board of Directors Performance Evaluation Guidelines":

Evaluation Cycle Evaluation Period Evaluation Scope Evaluation Method Evaulation Contents Evaluation Results
The Company completed the performance evaluation of the board and functional committees in 2021 through internal selfevaluation From January 1,2021 to December 31, 2021 The scope of the performance evaluation included the board, individual directors, the Audit Committee, and Remuneration Committee The performance evaluation methods include selfevaluation of the Board of Directors, selfevaluation of the directors, and selfevaluation of the Audit Committee and Remuneration Committee The criteria for evaluating the performance of the Company's Board of Directors shall cover the following five aspects:
1. Understanding and recommendations for the operation of the company;
2. Improvement of the quality of the Board of Directors' decision making;
3. Composition and structure of the Board of Directors;
4. Election and continuing education of the directors;
5. Internal control.

The criteria for evaluating the performance of the Company's directors shall cover the following six aspects:
1. Familiarity with the goals and missions of the Company
2. Awareness of the duties of a director;
3. Understanding and recommendations for the operation of the company;
4. Management of internal relationship and communication;
5. The director's professionalism and continuing education;
6. Internal control.

The criteria for evaluating the performance of the Company's Audit Committee and Remuneration Committee shall cover the following five aspects:
1. Understanding and recommendations for the operation of the company;
2. Awareness of the duties of the functional committee;
3. Improvement of the quality of the functional committee's decision making;
4. Functional committee composition and election of members;
5. Internal control.
The meeting organization of the Board of Directors delivered the selfevaluation questionnaire for the performance evaluation to each Director and member of the Audit Committee and Remuneration Committee before December 31, 2021 and recovered the questionnaires before January 15, 2022. According to the evaluation results, the results of the self-evaluation of the board, board members, Audit Committee, and Remuneration Committee were "excellent"
The Company completed the performance evaluation of the board and functional committees in 2022 through "Taiwan Investor Relations Institute" to be dealt with by means of external evaluation From November 30, 2021 to October 31, 2022 The scope of the performance included the board, the Audit Committee, and Remuneration Committee The external rating agency requires the company to provide the documents specified by it, and distributes self-assessment questionnaires related to performance evaluation to all directors to fill in and return, and assigns 3 executive members to be responsible for the evaluation after issuing a declaration of independence to conduct online interviews with the company's chairman and independent directors, corporate governance officer, and audit supervisor conducted interviews and evaluations on November 15, 2022. The criteria for evaluating the performance of the Company's Board of Directors shall cover the following five aspects:
1. Understanding and recommendations for the operation of the company;
2. Improvement of the quality of the Board of Directors' decision making;
3. Composition and structure of the Board of Directors;
4. Election and continuing education of the directors;
5. Internal control.

The criteria for evaluating the performance of the functional committees shall cover the following five aspects:
1. Understanding and recommendations for the operation of the company;
2. Awareness of the duties of the functional committee;
3. Improvement of the quality of the functional committee's decision making;
4. Functional committee composition and election of members;
5. Internal control.
The external evaluation agency issued an evaluation report on November 18, 2022, and compiled the evaluation conclusions and recommendations for the company as follows:
1. Sustainable Development Committee may convene meetings twice a year.
2. The Company may publish English version of Sustainability Report.
3. Make Succession Planning for Board.
4. Members and Key Management Personnel.
5.May adopt appropriate risk management policies and procedures, and the procedure has been approved by the company board of directors.
6.May adopt Intellectual Property Management Policies linking business goals.
7.The Company may examine the independence and capability of Certified Public Accountants to refer to “Audit Quality Indicators; AQI.”
The Company completed the performance evaluation of the board and functional committees in 2023 through Internal selfevaluation From November 1,2022 to October 31, 2023 The scope of the performance evaluation included the board, individual directors, the Audit Committee, Remuneration Committee and Sustainable Development Committee The performance evaluation methods include selfevaluation of the Board of Directors, selfevaluation of the directors, and selfevaluation of the Audit Committee ,Remuneration Committee and Sustainable Development Committee The criteria for evaluating the performance of the Company's Board of Directors shall cover the following five aspects:
1. Understanding and recommendations for the operation of the company;
2. Improvement of the quality of the Board of Directors' decision making;
3. Composition and structure of the Board of Directors;
4. Election and continuing education of the directors;
5. Internal control.

The criteria for evaluating the performance of the Company's directors shall cover the following six aspects:
1. Familiarity with the goals and missions of the Company;
2. Awareness of the duties of a director;
3. Understanding and recommendations for the operation of the company;
4. Management of internal relationship and communication;
5. The director's professionalism and continuing education;
6. Internal control.

The criteria for evaluating the performance of the Company's Audit Committee and Remuneration Committee shall cover the following five aspects:
1. Understanding and recommendations for the operation of the company;
2. Awareness of the duties of the functional committee;
3. Improvement of the quality of the functional committee's decision making;
4. Functional committee composition and election of members;
5. Internal control.
The meeting organization of the Board of Directors delivered the self-evaluation questionnaire for the performance evaluation to each Director andmember of the Audit Committee ,Remuneration Committee and Sustainable Development Committee before November 31, 2023 and recovered the questionnaires before December 31, 2023. According to the evaluation results, the results of the self-evaluation of the board, board members, Audit Committee, Remuneration Committee and Sustainable Development Committee were "excellent". In 2023, all six of the 2022 external Evaluation Results have been improved completed.

The aforementioned performance evaluation results were reported to the meeting of the Board of Directors convened in every March meeting as reference for review and improvement.

6.Corporate Governance Officer

The Board of Directors resolved in the meeting on May 14, 2019 to appoint Vincent Chan, the AVP of the Legal Department, as the Corporate Governance Officer to protect shareholder interests and strengthen the functions of the Board of Directors. Vincent Chan, the AVP of the Legal Department, has more than three years of work experience in legal affairs in public companies. The Corporate Governance Officer is responsible for related corporate governance affairs including: Handling matters relating to Board meetings and shareholders’ meetings according to law; Producing minutes of Board meetings and shareholders’ meetings; Assisting in work and continuing education of directors; Furnishing information required for business execution by directors and independent directors; and Assisting the Company in complying with laws and regulations governing such meetings.

The implementation of corporate governance affairs in 2023 is as follows:

1. Convened one annual general meeting of shareholders and produced meeting minutes of the shareholders' meeting.
2. Convened 4 meetings and special meetings of the Board of Directors in 2023 and produced meeting minutes of the Board meetings.
3. Convened 4 meetings of the Audit Committee in 2023 and produced meeting minutes of the Audit Committee meetings.
4. Issued letters to the directors of YFY in January and July 2023 to verify the information on their concurrent positions to ensure the integrity of information on the directors' positions concurrently held at the Company or other companies.
5. Responded to letters from Taiwan Stock Exchange and issued notices to directors and other insiders of YFY to remind them of matters to be reported when they transfer shares of insiders.
6. Regularly provided information on material information reporting procedures and regulations to all departments of YFY.
7. Cooperated with the Human Resources Department in inviting external lecturers for the continuing education for directors and supervisors of YFY and subsidiaries.
8. Provided YFY's Directors with information on continuing education courses for Directors and supervisors organized by external training institutions and assisted Directors in registration and payment procedures.

The Corporate Governance Officer participated in a total of 18 hours of courses in 2023, and continued to study to strengthen his professional skills.

7. Succession Planning for Board Members

Company's board of directors is appointed through shareholder director nominations at the shareholders' meeting. In alignment with Corporate Governance 3.0 Sustainable Development Road Map, which aims to enhance the independence of independent directors in listed companies, we promote that independent directors on the boards of listed companies should not serve more than three consecutive terms, ensuring a generational turnover in director and independent director selections. To maintain continuity and stability in the operation of the board between successive terms, the proportion of board member turnover should not be excessively high during each election cycle. This approach allows for the transfer of the management and governance experience of the previous board to the subsequent one. To further enhance the capabilities of our directors, our company offers regular educational opportunities in addition to their existing professional expertise. We provide various courses covering topics related to financial, business, legal, accounting, ESG, and internal control systems relevant to corporate governance. Each director is required to complete a minimum of six hours of continuing education annually to ensure they possess excellent corporate governance skills. Furthermore, in addition to nurturing potential director successors from within our group and senior management ranks, we simultaneously search for professional candidates with backgrounds in business, law, finance, accounting, or corporate affairs, who can serve as directors or independent directors, contributing to our succession planning in the future.