Board of Directors
The duties of AUO’s Board of Directors include: Supervising the Company’s strategy, monitoring the management and the operation, and arrangement of the corporate governance system. It is also responsible for the Company and the Shareholders’ Meeting, and exercises its powers in accordance with the law, the regulations of Articles of Incorporation, or the resolutions of the Shareholders’ Meetings. In addition, through the disclosure of the Directors’ attendance at Board Meetings and interest avoidance status in the annual report, the requirements of each Director’s own responsibilities and obligations are emphasized to ensure the performance of Company monitoring and management.
Board of Directors implements diversity
In accordance with the Company’s Corporate Governance Code, the board’s composition must consider the diversity. Company managers cannot make up more than one-third of the seats on the board, and appropriate diversity guidelines with regard to its operations, business situation and development needs must be drawn up to include standards regarding at least but not limited to the following two aspects:
- Basic conditions and values: gender and age.
- Specialist knowledge and skills: Specialist background, specialist skills, and industry experiences, etc.
In the end of October, 2019, the members of the Board of Directors and functional committees and the responsible departments for Board of Directors meetings has processed internal performance evaluation on the “Board of Directors”, “Audit Committee”, and “Remuneration Committee”.
The performance of the Board of Directors is assessed annually
Internal self-evaluationmore details
External assessmentsmore details
Our Company has commissioned the Taiwan Corporate Governance Association to carry out an external assessment of its Board’s efficacy, especially with regard to aspects of the Board: composition, leadership, authority, supervision, communication, internal control and risk management, self-discipline and supportive systems. The assessment is carried out through an online questionnaire and site visits and the results are used to improve the Board’s functioning.
The scope of the assessment of the Board of Directors includes 45 indicators that fall under five aspects: level of participation in Company operations, enhancing quality of decision-making from the Board, composition and structure of the Board, nomination of Directors and continuing education as well as internal control. The scope of the assessment of the Audit Committee and Remuneration Committee include 23 and 19 indicators respectively that also fall under five aspects: level of participation in Company operations, Duties understanding of the functional committees, enhancing quality of decision-making from the functional committees, composition and nomination of the functional committees as well as internal control. Performance evaluation on the “Board of Directors”, “Audit Committee”, and “Remuneration Committee” were processed respectively and the assessment results will be classified into three levels: Exceeding Expectations, Meets Expectations, and Room for Improvement.
In 2019, the self-assessment results of the “Board of Directors”, “Audit Committee”, and “Remuneration Committee” were rated as "Exceeding Expectations" and no material improvement items were found. The evaluation results will submit to the Board of Directors in the first Board meeting in 2020 and will be as a reference for members of the Board of Directors and functional committees on their performance, compensation and nomination renewal. At the same time, the company also referred to the directors' recommendations, and at the end of 2019, the board of directors approved the establishment of a corporate governance committee to establish an appropriate and adequate functional committee.
- The result of the Board’s internal self-assessment was“exceeding the standards.”
- The Board members are experts, autonomous and diverse
- The Board of Directors oversees the operational departments’ planning and implementation of sustainability-related issues and the Company Leads the industry by being the first to appoint a Chief Sustainability Officer.
The Board of Directors proactively implements sustainability governance, is deeply involved in the Company’s operations, and exhibits a high degree of self-discipline.Please click here to view the external assessment statement from the Taiwan Corporate Governance Association
Board of directors of the Company has approved to appoint Vice President, Mr. Benjamin Tseng, to serve as chief corporate governance officer to be responsible for the supervision and arrangement of the corporate governance and setting a goal to protect shareholder equity and to enhance the function of the board of directors. Mr. Benjamin Tseng’s qualifications meet the regulations regarding chief corporate governance officer in Paragraph 1 of Article 3-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. His functions and powers include providing information to directors and audit committee for them to execute their jobs and the development of the latest regulations regarding corporate business, assisting directors and audit committee to comply with the law and periodically reporting the progress of corporate governance to the Corporate Governance Committee and the board of directors every year and so as to handling matters relating to board meetings and shareholders’ meetings according to the laws, producing meeting minutes of board meetings and shareholders’ meetings, assisting directors and the Audit Committee in taking office and continuing education and etc. and whcih are being executed by the secretary unit of board of directors.
The Implementations of the corporate governance affairs in 2019 are listed as follows,
- All members of the Board have completed at least six credits of continuing education.
- The Company has filed for liability insurance for its Directors and important employees, and has reported to the board of directors after the insurance had been renewed.
- Performance evaluations of the board of directors and the functional committees have been processed in the end of October. Evaluation results in the board of directors, audit committee and the remuneration committee are all "Exceeding Expectations".
- The results in the 5th Corporate Governance Evaluation has been ranked among Top 5%.
- The chief corporate governance officer has taken 21 hours training courses which had been filed in MOPS. Please refer to the 2019 annual report for detailed information of the training courses.
In response to international trends, a CSR2.0 based reorganization has been implemented. AUO established a dedicated CSR unit. It directs our corporate sustainability development and made plans implemented. The Chairman and CEO is designated as the Chair of the committee. Currently, eight subcommittees have been set up, presided by senior managerial officers, who will facilitate the promotions of relevant tasks.
A Corporate Sustainability Responsibility Committee (CSR Committee) has been established along with subcommittees based on the material importance of each task. Secretariat Office oversees the operations of the CSR committee.
The Committee performs its duties based on the Plan-Do-Check-Act (P-D-C-A) cycle. Feedback will be given to each team at the end of a year, and each team is delegated to evaluate and review response measures and to establish target projects, which will be launched after chairperson confirmation at the annual conference during the subsequent year.
In 2018, CSR Committee convened four times, and each team reports and reviews its operational effectiveness to the Committee chairperson, as well as topics of concern from the stakeholders on a quarterly basis. Information will be compiled and submitted to the Board of Directors in the first Board meeting each year.
To strengthen the management of integrity operations, AUO had its HR Headquarters implement and monitor the execution of integrity operations policies and corruption prevention solutions. The HR Headquarters reports to the Board of Directors at least once a year.
This integrity operations includes each new employee is required to attend an advocacy session on AUO Integrity Policy and sign a declaration of integrity. In addition, Global Integrity Advocacy Week is held annually to promote relevant information on integrity. Furthermore, divisions that engage closely with suppliers or are involved in supplier affairs have been identified as in positions of high integrity risk, for which the employees of these divisions are required to undergo mandatory training on an annual basis. This training covers reporting of conflict of interest and law compliance courses. On the other hand, AUO suppliers and subcontractors are required to sign a Statement of Compliance with AUO Supplier/Subcontractors Code of Conduct.
Compensation Policy of the Board of Directors and Senior Management
Compensation for AUO Board Directors follow the "Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter." Proposals made by the Remuneration Committee are voted on by the Board of Directors before implementation. Company rules as stipulate that no more than 1% of the Company's profits in any given year may be set aside as directors' compensation. Any accumulated losses must however be paid first.
Compensation packages for corporate executives, senior managers and administrators comprise of salary, annual bonus, allowances and a performance bonus received as a share of earnings. The performance bonus accounted for 10~30% of the total compensation package for middle and senior management. Performance and compensation are highly correlated. Compensation packages for senior executives are determined by the Remuneration Committee as required by the law. An appropriate amount of related information is also disclosed to stakeholders in the Company’s annual reports to show that executive compensation correlates closely to the company's business performance.
A Remuneration Committee was established in 2011 by AUO in accordance with the "Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter." Duties of the Audit Committee:
- Stipulate and periodically review compensation policies, systems, standards and structures, and performance of Directors and managers.
- Periodically review and stipulate compensation packages of Directors and managers.