Precision Governance｜Operations and Governance
Nuvoton always explore new markets actively, continuously maintaining the profitability of the company's operations, and investing in strategic patent layouts. To ensure integrity in management and compliance with laws, it constantly monitors domestic and international policies and emerging risks that may affect the company. It regularly promotes the core values of integrity in management, establishes a robust corporate culture, and develops a sustainable new situation.
100
%
Integrity management education and training
5.77
NTD
EPS
4954
特許
Accumulated approved patents globally
Board of Directors
Operation of the Board of Directors
The Board of Directors (hereinafter referred to as “the Board”) serves as the company's highest governing body. The Board carries out its relevant duties in accordance with government regulations and the company's charter, including appointing and supervising the company's management, overseeing operational performance, and preventing conflicts of interest, while exercising authority over shareholder meeting resolutions. Both directors and independent directors share responsibility for corporate governance and operational strategies, guided by principles that prioritize the interests of shareholders while also considering the interests of stakeholders, such as employees, customers, suppliers, government, and non-governmental organizations. The organizational structure beneath the Board primarily consists of four major business groups and four major centers, with various committees established to handle different functions and promote business initiatives. The Chairman of the Board also serves as the CEO, while the position of General Manager is held by a professional manager who is not a board member. This arrangement aims to enhance the operational performance of the group, increase shareholder interests, and achieve the vision of sustainable business operations. In response to these considerations, the number of independent director positions has been increased from the statutory three to four, as outlined in the company's Corporate Governance Best Practice Guidelines, to maintain objectivity and oversight. The primary goals are to enhance the operational performance of the group, increase shareholder interests, and achieve sustainable business operations while avoiding and mitigating related conflicts of interest.
In 2023, Ms. Hsiu-Fen Lai, Vice President of the company's Finance Center, assumed the role of Corporate Governance Director. With over 26 years of financial professional experience and qualifications meeting legal requirements, she assists the Board of Directors and individual directors in fulfilling their duties. This includes arranging Board meeting schedules and agendas, planning director training, providing information during and outside of Board meetings, and regularly informing directors of relevant information. The Corporate Governance Director ensures the proper functioning of the Board of Directors and governance-related matters.
The functioning of the Board of Directors
- The Risk Management Committee shall convene at least twice a year.
- Hold quarterly strategy brainstorming meetings.
- The Sustainability Committee reports its progress to the Board of Directors on a quarterly basis.
Composition of the Diverse Board of Directors
Based on the company's charter, the selection of directors adopts a candidate nomination system and adheres to corporate governance best practices emphasizing diversity among Board members. The Board of Directors configures its members based on the company's diversity policy, succession planning, and performance evaluation results. Director candidates are selected based on principles of diversity, sustainability, organizational impact, and ability to execute duties, assisting in operational decision-making and long-term strategic planning. The most recent election was held on June 2, 2022, resulting in the selection of the seventh term (until the year 2025) Board of Directors members. Through the participation of female and independent directors, and the recruitment of elites from different generations and professional fields, the election results of the 2022 shareholder meeting have achieved the diversity policy and sustainable operation goals of the Board of Directors.
The seventh term Board of Directors consists of eleven directors, including four independent directors, accounting for 36%, and one female director, accounting for 9%. In terms of age distribution, directors aged 50 and above account for 91%, while those aged below 50 account for 9%. Directors who do not hold positions as company executives or employees occupy more than two-thirds of the director seats. Though there are two individuals with spousal or second-degree relationships, this does not exceed half of the Board of Directors seats, complying with the provisions of Article 26-3 of the Securities Exchange Act. All members of the Board of Directors possess extensive industry management experience, with a wide age range, diverse knowledge, and professional backgrounds covering different fields, possessing the necessary capabilities to fulfill director duties, supervise, and provide constructive opinions. Winbond Electronics Corporation and Chin Xin Investment Corporation are the main shareholders of the company. Amongst them, Winbond Electronics Corporation is the parent company of Nuvoton and the largest shareholder holding more than half of the company's shares, as well as serves as director of the company to date.
Member diversity of the 7th term Board of Directors
| Job Title | Name / Legal Representative of the Corporation | Gender | Current Position | Core Diversity Elements | Board of DirectorsAttendance Rate of the Board of Directors in 2023 ( 5 times in 2023) | ||||
|---|---|---|---|---|---|---|---|---|---|
| Business Management | Leadership Decision Making | Industry Knowledge | Financial Accounting | Information | |||||
| Chairman of the Board | Legal Representative of Winbond Electronics Corporation: Yuan-Mao Su | Male | CEO of Nuvoton Technology Corporation | 100% (5/5) | |||||
| Vice Chairman of the Board | Karen K. Chiao | Female | Callisto Holding Limited Director and President of Callisto Holding Limited | 100% (5/5) | |||||
| Director | Arthur Yu-Cheng Chiao | Male | Chairman and CEO of Winbond Electronics Corporation | 100% (5/5) | |||||
| Director | Legal Representative of Chin Xin Investment Corp: Jen-Lieh Lin | Male | Vice President of Winbond Electronics Corporation | 100% (5/5) | |||||
| Director | Chi-Lin Wea | Male | Chairman of Waterland Financial Holdings | 100% (5/5) | |||||
| Director | Royce Yu-Chun Hong | Male | Director & President of IPEVO Corp | 100% (5/5) | |||||
| Director | Liang-Gee Chen | Male | Director of Himax Technologies, Inc. and Independent Director of Everlight Electronics Co., Ltd. | 100% (5/5) | |||||
| Independent Director | Mark Wei | Male | Chairman of Shin Kong Life Insurance Co., Ltd. | 100% (5/5) | |||||
| Independent Director | David Shu-Chyuan Tu | Male | Chairman of BestCom Info Tech Corp. and General Manager of Synnex Technology International Corp. – Group Business Development & Strategy | 100% (5/5) | |||||
| Independent Director | Allen Hsu | Male | Chairman of Unus Tech Co., Ltd. and Yi Zhong Technology Co., Ltd., and Independent Director of Winbond Electronics Corporation | 100% (5/5) | |||||
| Independent Director | Kuang-Chung Chen | Male | Diodes Incorporated Independent Director of Diodes Incorporated | 100% (5/5) | |||||
Board of Directors Remuneration and Performance Evaluation
The Remuneration Committee is responsible for establishing and reviewing the performance evaluation and remuneration policies, systems, standards, structures, and individual remuneration of directors and managers. It sets forth the "Measures for the Compensation and Performance Evaluation of Directors / Managers" to ensure that overall remuneration is competitive and enhances operational performance to achieve maximum long-term benefits. The remuneration of the company's managers is handled in accordance with the company's charter and the "Measures for the Compensation and Performance Evaluation of Directors / Managers," which covers salary, bonuses, and employee compensation systems and standards. In addition to considering role responsibilities, contributions to the company's operations, and benchmarking against industry standards, operational performance, profitability, management effectiveness, and the practice of core corporate values and sustainable development goals (including environmental, social, and corporate governance aspects) are also taken into account as reference indicators for manager performance evaluations and remuneration allocation. After individual reviews and assessments by the Remuneration Committee, the overall reasonableness of compensation is submitted to the Board of Directors for resolution. This includes monthly salary disbursements, performance bonuses based on operational performance, and employee remuneration based on annual profit conditions. There are no provisions regarding manager "signing bonuses or recruitment incentives and claw back mechanisms." For senior executives' retirement benefits, the "Regulations on Manager Retirement" are established to ensure retirement security for senior executives.
To implement corporate governance and enhance the functionality of the Board of Directors, Nuvoton has established the "Measures for the Compensation and Performance Evaluation of Directors" to strengthen performance evaluations, while conducting annual performance evaluations of the Board of Directors based on five aspects: the degree of participation in company operations, improvement in decision-making processes, composition and structure of the Board of Directors, selection process for directors and continuous education, and internal controls. The results of the evaluation are summarized by the Board of Directors' deliberative unit, reported to the Remuneration Committee and the Board of Directors, and used to formulate the plan to improve performance for next year. This continuous enhancement aims to improve the company's governance and increase long-term shareholder value. The Board of Directors and functional committees' performance evaluations for 2023 have been completed, and the overall results indicate that "the Board of Directors and its functional committees operate well." Additionally, Nuvoton stipulates that the Board of Directors' performance evaluation must be conducted by an external independent organization at least every three years. This includes on-site interviews with the chairman, president, conveners of functional committees, corporate governance executives, and internal audit executives, with the evaluation results reported to the Board of Directors. In 2023, the company commissioned an external organization, Taiwan Corporate Governance Association, to conduct a performance evaluation of the Board of Directors.
Board of Directors Professional Development
Nuvoton arranges annual training courses for directors on economic, environmental, and social issues related to operations to enhance their capabilities. Additionally, to facilitate ongoing learning, the company periodically sends information on economic, environmental, and social issues related to the Board of Directors. The training hours for courses related to environmental sustainability (carbon rights, climate change, sustainable finance) amount to 85 hours, those for courses related to corporate governance and risk management total 41 hours, and those for courses related to economics (regional economics, global political and economic situations) total 50 hours.
Environmental sustainability courses
hours
Carbon rights, climate change, sustainable finance
Corporate governance courses
hours
Related to corporate governance and risk management
Economics courses
hours
Regional economics, global political and economic situations
Functional Committees
To strengthen oversight functions and enhance management capabilities, Nuvoton has established the three committees of Audit, Remuneration, and Risk Management under the Board of Directors in accordance with their authority and functions, enhancing the company's governance framework. Functional Committees are composed of or involve independent directors to ensure the objectivity and impartiality of the committees' decisions and recommendations for the effective implementation of mechanisms for independent oversight and checks and balances. This ensures that all decisions and actions of the Board of Directors are reported to and discussed by the Board, with directors abstaining from involvement in matters involving their own interests or those of the entities they represent. Some matters are also reported to and discussed at shareholder meetings, aligning with the best interests of stakeholders.
Responsibilities and Composition of Functional Committees
| Committee Name | Members and Attendance | Responsibilities |
|---|---|---|
| Audit Committee | The Audit Committee consists of 4 independent directors. During the annual shareholders' meeting on June 2, 2022, Nuvoton elected its seventh Board of Directors and the third Audit Committee assumed office on the same day. In 2023, the Audit Committee held 5 meetings, with a 100% attendance rate. | The primary function of the Audit Committee is to assist the Board of Directors in overseeing the quality and integrity of the company's accounting, auditing, financial reporting processes, and financial controls. For external investors, it represents the company's supervisory function and independence, effectively safeguarding investor interests. |
| Risk Management Committee | On August 2, 2022, Nuvoton's Board of Directors approved the establishment of the Risk Management Committee. The committee comprises several directors appointed by the chairman, as well as four independent directors who account for a majority. The members collectively nominate one person to serve as the convener and meeting chair, representing the committee externally. The Risk Management Committee is mandated to convene meetings at least twice a year, with the flexibility to adjust as needed. In 2023, a total of 1 meeting was convened, with a 100% attendance rate. | The committee is responsible for overseeing the overall risk management of the company. It formulates risk management policies, frameworks, and establishes qualitative and quantitative management standards. Adjustments are made based on the company's actual development needs or changes in the external environment. |
| Remuneration Committee | The Remuneration Committee is composed of 4 independent directors. In 2023, a total of 2 meetings were convened with a 100% attendance rate. | The committee is responsible for formulating and regularly reviewing the annual and long-term performance goals and remuneration policies, systems, standards, and structures for directors and executives. It also periodically evaluates the achievement of performance goals for directors and executives, and determines the content and amount of their individual compensation. |