Governance

Corporate Governance

AUO's Corporate Governance Blueprint

AUO voluntarily emphasizes corporate governance, and we have also complied with the Financial Supervisory Commission‘s Corporate Governance 3.0 Sustainable Development Blueprint to enhance the Company’s sustainable development and strengthen our international competitiveness, ultimately developing into a sustainable and outstanding enterprise.

Implementation status of corporate governance related affairs in 2021

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 reports to the Board of Directors after the insurance has been renewed.
The Company has conducted performance evaluation on the Board of Directors and the functional committees. The evaluation results of the Board of Directors, Audit Committee, and the Remuneration Committee are all Exceeding Expectations.
The Company‘s results in the 8th Corporate Governance Evaluation had ranked among Top 5%. The training hours for the chief of corporate
governance totaled 19.5 hours in 2021

Board of Directors Meetings

Audit Committee Meetings

Remuneration Committee Meetings

Shareholders’ Meeting

CSR Committee Meetings

Corporate Governance Committee Meetings

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 Diversification

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.

Director gender ratio

Under the age of 55

22 %

56~65 years old

22 %

65~75 years old

56 %

Director age distribution

Overall results

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.

Independent Director seats

exceeds 50 %

Female Director seats

is at least 2

Board members with a management position within the Company

did not exceed 1/3

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

The performance of the Board of Directors is assessed annually

Internal self-evaluation

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External assessments

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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 self-evaluation results of “Board of Directors”, “Audit Committee”, “Remuneration Committee” and “Corporate Governance Committee” of the Company in 2021 were all “Exceeding Expectations”, without any major improvement items. The evaluation results are expected to be reported to the Board of Directors in the first board meeting in 2022, which will serve as a reference for members of the Board of Directors and functional committees on their performance, remuneration, nomination and renewal.

Governance organization operation and execution

Audit Committee

The Audit Committee communicates with the Company’s financial statement auditors on a regular basis, and is responsible for the appointment of financial statement auditors as well as conducting independence and performance reviews. At the same time, internal auditors are required to submit audit summary reports to the Audit Committee regularly based on the annual audit plan and to prepare reports on submissions made to the Audit Committee mailbox. The Audit Committee also conducts regular evaluations of AUO’s internal control system, internal auditors, and their work performance.

Composition of the Audit Committee

The AUO Audit Committee is made up of all independent directors (including 2 financial experts). All 5 independent directors satisfy the criteria for professionalism, work experience, independence, and the number of concurrent independent directorships per the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.

AUO 2021 Annual Report Chapter 3-Corporate Governance

The responsibilities of the Audit Committee and their meeting attendance can be found in the AUO 2021 Annual Report Chapter 3-Corporate Governance

Audit Committee performance evaluation

The scope of the assessment of the Audit Committee include 23 indicators respectively that 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. The assessment results will be classified into three levels: Exceeding Expectations, Meets Expectations, and Room for Improvement.

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Organization of the Remuneration Committee

Define and periodically review compensation policies, systems, standards and structures.
Periodically review compensation packages of directors and managers.

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.

The senior executives' remuneration is tied to the Company's ESG performance. Besides operational targets, performance in CSR 2025 Goal is also taken into consideration. Furthermore, 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.

The scope of the assessment of the Remuneration Committee

The scope of the assessment of the Remuneration Committee include 23 indicators respectively that 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. The assessment results will be classified into three levels: Exceeding Expectations, Meets Expectations, and Room for Improvement.

Corporate Governance Committee

Under the Corporate Governance Committee Charter, the Corporate Governance Committee must be convened at least once a year, and ad hoc meetings can be convened as necessary. Its key responsibilities are as follow :

A. A. Define the criteria governing the diversity and independence of Board members including professional knowledge, technology, experience, and gender. Follow the same criteria for the search, review, and nomination of candidates for the Board of Directors.

B. B. Construct and develop the organizational structure of the Board of Directors and committees, evaluate the performance of the Board of Directors, committees, and directors, and evaluate the independence of independent directors.

C. C.Define and periodically review the training and succession plans for directors.

Corporate Governance Manager

Corporate Governance Manager is responsible for the supervision and planning of corporate governance. Corporate Governance Manager qualifications satisfy the criteria for corporate governance officers set out in Article 3-1-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.

ESG and Climate Committee

The balanced development of Corporate Management and Green Sustainability are AUO‘s philosophies. While pursuing a strong corporate physique, we invest more long-term resources in environmental protection and social engagement issues. The “AUO Green Solutions” was unveiled in 2008, taken the lead in the industry to reduce environmental impact at all stages of the life cycle of our products with a systematic strategy. AUO established the CSR Committee at the end of 2013, which is the highest governance body for the Company‘s sustainable development and operation. In 2018, based on a solid foundation built over 10 years, the Sustainability Management Department was further established, to make the overall planning of strategies. Taking “Go beyond CSR and Create Shared values” as the vision and goal, AUO closely connects with the United Nations Sustainable Development Goals and corporate core competitive strategies. By attaching importance to value chain cooperation and actively building relationships with global partners, AUO leads itself to play the leader in corporate sustainable development and strives to create more shared values.

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. The Sustainability Committee regularly meets quarterly, 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.

ESG and Climate Committee regularly meets quarterly, 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.

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