Governance

The Major Board Resolutions

 

Communications between independent directors/ internal/ independent auditors

 

A. The channels of the communications between the independent directors, the internal auditors, and the independent auditors

 

a. Independent directors and accountants meet at least once a quarterly regular meeting. Accountants report on the results of quarterly financial statement reviews or verifications and other communication requirements required by relevant laws and regulations. Communications will be made on whether there are any significant adjustment entries or legal amendments affecting the accounting situation and they also regularly update laws and ordinances to independent directors every year. Independent directors also conduct independent assessments of the services provided by accountants.  If there are major events, a meeting can be convened at any time.

 

b. The head of internal auditor and independent directors meet at least once a quarterly regular meeting to report on the company's internal audit execution status, internal control operations and the execution of Audit Committee Letter; meetings can be convened at any time if there are major events.

 

 

B. The major matters of the communications between the independent directors and the independent auditors

 

The communication between the Audit Committee and the independent auditors works well. The major matters of these communications in 2019 are as follows:

 

Meeting Date Descriptions of the major matters Communication status and implementation results
2019/01/28 The findings of the audits on the Company’s financial results for FY 2018 After review by the Audit Committee, all independent directors have no objections
2019/03/22 The findings of the audits on the Company’s SOX for FY 2018

Report on 20-F financial results
2019/04/24 The findings of the review on the Company’s financial results for the three months ended March 31, 2019
2019/07/24 The findings of the review on the Company’s financial results for the six months ended June 30, 2019
2019/10/29 The findings of the review on the Company’s financial results for the nine months ended September 30, 2019
2019/12/27 2019 annual regulatory update with AUO Audit committee

 

 

C. The major matters of the communications between the independent directors and the internal auditors

 

The communication between the Audit Committee and the internal auditors works well. The major matters of these communications in 2019 are as follows:

 

 Meeting Date Descriptions of the Major Matters Communication status and implementation results
2019/01/28 The findings of the internal audit reports for the fourth quarter of 2018

Statement of Internal Control System for FY 2018
After review or approval by the Audit Committee, all independent directors have no objections
2019/04/24 The findings of the internal audit reports for the first quarter of 2019
2019/07/24 The findings of the internal audit reports for the second quarter of 2019
2019/10/29 The findings of the internal audit reports for the third quarter of 2019

 

 

The implements of preventing insider trading

The Company has established " Management Procedure for Insider Trading Prevention" to prohibit internal personnel from buying or selling securities by using undisclosed information to the public, and as reference for the Company's handling and disclosure of material information, the Company also reviews the Procedures from time to time to comply with present laws and practical management needs. The Procedures can be found on the Company's website.


The Company will enforce educational promotions pertaining to insider trading preventive management for any new director and senior managers within one month of his/her appointment. In addition, the attendance rate for new employee corporate ethics training courses and the signage rate for declaration of integrity have both reached 100% in 2019. Furthermore, the Company arranged a course named “Law compliance for the insider equity trading” in November, 2019 and invited the insiders to join the course. The course includes three parts, discussion on related rules and preventive practices of insider trading, regulations and practices of insider equity changes, and short-term transaction prevention and practice, to specify implementation of propaganda to prevent insider trading.

 

 

Diversity policy of the members of Board of Directors

Pursuant to the Company's "Corporate Governance Principles," the composition of the Board of Directors should take into consideration the policy of diversity. Directors who serve concurrently as the Company's managers should not exceed one third of all Directors and appropriate diversification guidelines have been established based on Company operations, its business model, and development requirements. These guidelines stipulate that Directors should be assessed by standards including but not limited to the following two aspects:


1. basic qualifications and value: gender and age;
2. Professional knowledge and skills: professional background, competencies, and industry experiences etc.

 

The Company’s management objectives and the goals achieved regarding the diversity policy are listed below:

 

 Management Objectives Goals Achieved
Independent Directors exceeding one-half of the total director seats Achieved
Number of Directors who concurrently serve as Company managers do not exceed one-third of the total director seats Achieved
At least two seats of Directors are females Achieved

 

 

The Company's fulfillment of diversification of members of the Board of Directors in 2019 is as follows:

 

Name Title  Seniority of the Independent Director  Employee Position
Below
3 Yrs
3~9 Yrs Exceed
9 Yrs
Shuang-Lang (Paul) Peng Chairman       V
Kuen-Yao (K.Y.) Lee Director        
Frank Ko Director       V
Peter Chen Director        
Chin-Bing (Philip) Peng Independent Director      
Mei-Yueh Ho Independent Director      V  
Yen-Shiang Shih Independent Director    V    
Yen-Hsueh Su Independent Director      
Jang-Lin (John) Chen Independent Director  V      

Note: Information as of December 31, 2019 

 

Name Title Professional Knowledge and Skills
Industry or Technology Legal, Finance or Accounting
Shuang-Lang (Paul) Peng Chairman  
Kuen-Yao (K.Y.) Lee Director  
Frank Ko Director  
Peter Chen Director  V  
Chin-Bing (Philip) Peng Independent Director  V  V
Mei-Yueh Ho Independent Director  V  
Yen-Shiang Shih Independent Director  V  
Yen-Hsueh Su Independent Director  V V
Jang-Lin (John) Chen Independent Director  V  

Note: Information as of December 31, 2019 

 

Name Title Major Experiences
Technology Industry Finance & Investment Technical Research
Shuang-Lang (Paul) Peng Chairman V    
Kuen-Yao (K.Y.) Lee Director V    
Frank Ko Director V    
Peter Chen Director V    
Chin-Bing (Philip) Peng Independent Director V    
Mei-Yueh Ho Independent Director V V  
Yen-Shiang Shih Independent Director V    
Yen-Hsueh Su Independent Director V V  
Jang-Lin (John) Chen Independent Director V   V

Note: Information as of December 31, 2019 

 

Name Title Gender Age
Below 55 Yrs Old 56~65 Yrs Old 66~75 Yrs Old
Shuang-Lang (Paul) Peng Chairman Male   V  
Kuen-Yao (K.Y.) Lee Director Male     V
Frank Ko Director Male V    
Peter Chen Director Male   V  
Chin-Bing (Philip) Peng Independent Director Male     V
Mei-Yueh Ho Independent Director Female     V
Yen-Shiang Shih Independent Director Male     V
Yen-Hsueh Su Independent Director Female V    
Jang-Lin (John) Chen Independent Director Male     V

Note: Information as of December 31, 2019

 

 

Top 10 Shareholders

 

Top 10 Shareholders (Ex-dividend Record Date:2019.7.19)

 

Shareholders’ Name Holding Shares Holding %
Qisda Corporation 663,598,620 6.90
ADR of AU Optronics Corp. 522,593,749 5.43
Quanta Computer Inc. 443,930,307 4.61
Fubon Life Insurance Co., Ltd 367,500,000 3.82
Trust Holding for Employees for AU Optronics Corp. 353,828,751 3.68
Tong Hwei Enterprise Co., Ltd. 150,000,000 1.56
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds 110,308,874 1.15
Cathay Life Insurance Co., Ltd 103,400,000 1.07
VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS 92,924,669 0.97
CTBC bank, Yuanta Taiwan 50 Securities Funds 71,074,786 0.74
  2,879,159,756 29.93

 

 

Full- (or part-) time unit of Corporate Governance, Corporate Social Responsibility and Ethical Corporate Management

 

Full- (or part-) time unit who sets into action and
the operation and implementation status of the unit
Corporate Governance

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. 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.


Major implementations of the corporate governance affairs are listed as follows,

 

1. Seven board of directors meetings and seven Audit Committee’s meetings were convened in 2019.

2. One Annual General Shareholders' Meeting was convened in 2019.

3. All members of the Board have completed at least six credits of continuing education.

4. 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.

5. 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". 

6. The results in the 5th Corporate Governance Evaluation has been ranked among Top 5%.

7. 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.

 

Corporate Social Responsibility

The Company’s CSR Committee was established in September 2013, and each sub-committee was created based on our essential initiatives. Meanwhile, Secretariat Office oversees the operations of the CSR committee. In November 2017, we had a CSR 2.0 re-organization to respond the international trend. The Committee is still chaired by the Chairman/ CEO, and it has eight sub-committees. Each sub-committee chairmen is our senior executives, in charge of promoting various businesses. In March 2018, we create a unique position, Chief Sustainability Officer, and a specialized function, Sustainable Management Department. This team assists the operation of the CSR committee, including trends monitoring, training planning, multiple communication and system building, etc., so as to implement corporate social responsibility policies, direction and related business plans.


The CSR Committee adopts the PDCA approach (Plan, Do, Check, and Action), delivers stakeholders’ opinions to each sub-committee in the end of the year and authorizes each sub-committee to assess, set up target and develop action plan. Then they will report in the next year CSR committee annual meeting in the first quarter, and the action will be taken after the approval from chairman.


The CSR Committee is held quarterly. As of October 2019, three quarterly meetings (including the annual meeting) have been completed. The quarterly meetings will contain performance reporting and stakeholders' concerns solving. These also will be presented to the board of directors in the first board meeting each year.

 

Ethical Corporate Management

To strengthen the management of integrity operations, AUO follows “ Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and to establish “AUO Ethical Corporate Management Principles”, “AUO Enterprise Integrity Policy” and “AUO Declaration Regulations for Conflict of Benefits”. HR Headquarter is responsible for formulating the ethical management policy and preventive measures as well as supervising their implementation and to report to the directors regarding the implements in the first board meeting each year.


The implements of the integrity operations include that 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 and the on-line compliance training courses are arranged. 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 the report of conflict of interest. On the other hand, AUO’s suppliers and subcontractors are required to sign a Statement of Compliance with AUO Supplier / Subcontractors Code of Conduct.

 

Among the above matters, through training, every new employee needs to take the integrity course (10 minutes) and to sign an integrity statement. In 2019 we have trained 424 employees and the signing rate is 100%. A Global Integrity Advocacy Week is held every year. Integrity-related messages are announced by e-news and broadcast by voice record to ensure that all employees understand the core AUO values on integrity. To prevent unethical conduct, through the periodical supervision, anti-corruption employees are required to report any conflicts of interest each year. In 2019, 770 employees in anti-corruption positions have reported and the reporting rate is 100%.