Board Resolutions

The Major Board Resolutions

The Major Board Resolutions of 2020

The Major Board Resolutions of 2019

The Major Board Resolutions of 2018

The Major Board Resolutions of 2017

The Major Board Resolutions of 2016

The Major Board Resolutions of 2015

 

Communications between independent directors/ internal auditors / 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 quarter for a 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 auditing and independent directors meet at least once a quarter for a regular meeting to report on the company's internal audit execution status, internal control operations and the execution of the Audit Committee Letter. Meetings can be convened at any time if there are major events. The appointment and removal of the company's chief auditor shall be approved by the Audit Committee and resolved by the Board of Directors. The appointment, dismissal, evaluation and review, salary and compensation of internal auditors shall be reported by the chief auditor to the Chairman for approval in accordance with the Company's Corporate Governance Rules.

 

c.Independent directors may communicate separately and respectively with accountants and the head of internal auditor at least once a year. Communication channels are open and function well.

 

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 2021 are as follows:

 

Meeting Date

Descriptions of the major matters

Communication status and implementation results

2021/1/26 Meeting

Auditors provided comments about the impact on the statements relating to internal control and internal audit system in the Company’s current financial statement resulting from the former employees’ misconduct.

The auditor has assessed that the impact of this matter on the financial statement did not exceed the determined materiality threshold. In addition, there were no significant deficiencies found on the company’s internal control and internal audit operations after re-evaluating.

2021/02/03
Audit Committee

The findings of the audits on the Company’s financial results for FY 2020

After review by the Audit Committee, all independent directors have no objections.

2021/04/28

Audit Committee

The findings of the review on the Company’s financial results for the three months ending on March 31, 2021

2021/07/28

Audit Committee

The findings of the review on the Company’s financial results for the six months ending on June 30, 2021

2021/10/27

Audit Committee

The findings of the review on the Company’s financial results for the nine months ending on September 30, 2021

2021/11/16 Meeting

(separate meeting)

2021 annual regulatory update and critical issue with AUO Audit committee

Noted and no other suggestions

 

Meeting Date

Descriptions of the major matters

Communication status and implementation results

2021/02/03

Audit Committee

The findings of the audits on the Company’s financial results for FY 2020

After review by the Audit Committee, all independent directors have no objections.

2021/04/28

Audit Committee

The findings of the review on the Company’s financial results for the three months ending on March 31, 2021

2021/07/28

Audit Committee

The findings of the review on the Company’s financial results for the six months ending on June 30, 2021

2021/10/27

Audit Committee

The findings of the review on the Company’s financial results for the nine months ending on September 30, 2021

2021/11/16 Meeting

(separate meeting)

2021 annual regulatory update and critical issue with AUO Audit committee

Noted and no other suggestions

 

 

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 2021 are as follows:

Meeting Date

Descriptions of the Major Matters

Communication status and implementation results

110/1/26 Meeting

Reporting the former employees’ misconduct.

The Audit Committee has agreed with the remedial plan proposed by the Company, such as consulting or appointing forensic accountants to assist in establishing a continuous auditing dashboard.

 

The Company has appointed an accounting firm to provide training to the Company for establishing the continuous auditing dashboard which is launched in January 2022.

2021/02/03

Audit Committee

A .The findings of the internal audit reports for the fourth quarter of 2020

B. Statement of Internal Control System for FY 2020

After review or approval by the Audit Committee, all independent directors have no objections

2021/04/28

Audit Committee

The findings of the internal audit reports for the first quarter of 2021

2021/07/28

Audit Committee

The findings of the internal audit reports for the first quarter of 2021

2021/10/27

Audit Committee

The findings of the internal audit reports for the third quarter of 2021

2021/12/20 Meeting

(separate meeting)

A. Sales analysis - yield rate and shipment of downgrade products

B. Internal auditors’ in-house training plan for 2022

C. Updating the status of the Company’s cooperation with the Investigation Bureau and the Prosecutor’s Office in the investigation of the former employees’ misconduct.

A. The independent directors fully discussed the matter and suggested the Company review internal control systems and communicate to the Audit Committee any material matters discovered

B. Noted and no other suggestions

1 The Company received the report and suspected that employees involved in abnormal transactions which caused the company losses after preliminary investigation in September 2020. Upon discovering employees’ misconduct, the Company immediately conducted an internal investigation and then notified and fully cooperated with the Investigation Bureau and the Prosecutor’s Office in the investigation of the matter. After the Investigative Committee for Major Infringements identified, the Company dismissed two employees involved in the case in November 2020 and reported to the Audit Committee on 2020/11/17.

 

Date of meeting, agenda, resolutions of Remuneration Committee

Meeting Date

Agenda

Resolutions and opinions of all members

2021/2/3

1. The selection of applicable personnel for the "Measures for the Protection and Conversion of Management Rights"


2. The list of treasury stocks' receiving managers and the number of distribution (subscription)

Approved as proposed and reported to the Board of Directors for resolution.

2021/3/16

The 2020 compensation to directors and senior managerial officers

2021/7/28

The distribution of 2020 employees’ remuneration for senior managerial officers

 

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 promotions pertaining to insider trading preventive management, including regulations of insider trading, the scope of the information that will have a material impact on the price of the securities, the means of its disclosure and related matters, for any new director and senior managers within one month of his/her appointment.


In 2021, the Company has arranged Integrity Training Course for directors and all employees (including new hires). The result has shown that 7 directors and 19,125 employees have completed the training course. The completion rate of all employees is nearly 96%. As to new hires, the attendance rate of the course and the signage rate for declaration of integrity have both reached 100%. In addition, the Company has also reminded insiders, relevant managements, and colleagues governed by the provisions of Article 157-1 of the Securities Exchange Act before the quarterly operating results are published to specify implementation of propaganda to prevent insider trading. In 2021, the Company promoted to about 30 insiders, relevant managements, and colleagues every quarter.

 

 

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 and appropriate diversification guidelines have been established based on Company operations, its business model, and development requirements

 

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

Gategory

Management Objectives

Goals Achieved

BOD composition

9 directors, including 4 directors and 5 independent directors

Achieved

Gender

  • The consecutive term of independent directors is three, and the consecutive term shall be extended to four at most only if approved by the Corporate Governance Committee
  • The term of more than half of the independent directors shall not exceed three.
  • The age of directors at the time of election shall not more than 74 years old.

Achieved

Tenure

At least two seats of Directors are females

Achieved

Concurrent position

  • Number of Directors who concurrently serve as AUO’s executives shall not exceed one-third of the total director seats
  • Independent directors shall not concurrently serve as independent directors in more than 3 companies.
  • Independent directors should not concurrently serve as directors (including independent directors) or supervisors in more than 5 listed or OTC companies.

Achieved

Diversified professional capabilities

Including technology industry, technology research and development, industrial innovation, financial accounting, financial investment, corporate sustainability

Achieved

The Company's fulfillment of diversification of members of the Board of Directors in 2022 is as follows:

Name

Title

Gender

Age

Seniority of the Independent Director

Below 3 years

3~9 years

Exceed
9 years

Shuang-Lang (Paul) Peng

Chairman

Mr.

64

 

 

 

Frank Ko, Representative of AUO Foundation

Director

Mr.

50

 

 

 

Han-Chou (Joe) Huang, Representative of Qisda Corporation

Director

Mr.

60

 

 

 

Chuang-Chuang Tsai, Representative of Ming Hua Investment Company Limited

Director

Ms.

72

 

 

 

Yen-Hsueh Su

Independent Director

Mr.

53

 

V

 

Chin-Bing (Philip) Peng

Independent Director

Mr.

69

 

 

V

Jang-Lin (John) Chen

Independent Director

Mr.

69

 

V

 

Chiu-ling Lu

Independent Director

Ms.

59

V

 

 

Cathy Han

Independent Director

Ms.

58

V

 

 

 

 

 

 

Name

Title

Professional Knowledge and Skills

Technology Industry

Technology Research and Development

Industrial Innovation

Shuang-Lang (Paul) Peng

Chairman

V

 

 

Frank Ko

Director

V

 

 

Han-Chou (Joe) Huang,

Director

V

 

Chuang- Chuang Tsai,

Director

V

V

 

Yen-Hsueh Su

Independent Director

V

 

 

Chin-Bing (Philip) Peng

Independent Director

V

 

 

Jang-Lin (John) Chen

Independent Director

V

V

 V

Chiu-ling Lu

Independent Director

V

 

 

Cathy Han

Independent Director

V

 

 

 

 

 

 

Name

Title

Professional Knowledge and Skills

Financial Accounting

Financial Investment

Corporate Sustainability

Shuang-Lang (Paul) Peng

Chairman

 

 

 

Frank Ko

Director

 

 

 

Han-Chou (Joe) Huang,

Director

 

 

 

Chuang- Chuang Tsai,

Director

 

 

 

Yen-Hsueh Su

Independent Director

V

 V

 

Chin-Bing (Philip) Peng

Independent Director

V

V

 

Jang-Lin (John) Chen

Independent Director

 

 

 

Chiu-ling Lu

Independent Director

V

V

Cathy Han

Independent Director

V

 V

V

 

 

 

Name Title

Employee Position

Independent directors concurrently serve as independent directors in other domestic public companies

Independent directors serve as directors or supervisors in other listed or OTC companies

Shuang-Lang (Paul) Peng

Chairman

V

 

 

Frank Ko

 Director  V    

Han-Chou (Joe) Huang

 Director      

Chuang- Chuang Tsai

 Director      

Yen-Hsueh Su

Independent Director   2 3

Chin-Bing (Philip) Peng

Independent Director   1 3

Jang-Lin (John) Chen

Independent Director   0 0

Chiu-ling Lu

Independent Director   1 1

Cathy Han

Independent Director   3 3

 

 

 

 

Top 10 Shareholders

 Top 10 Shareholders (Record Date of 2022 shareholder’s meeting:2022.4.19)

Shareholders’ Name

Holding Shares

Holding (%)

Qisda Corporation

663,598,620

6.90

Trust Holding for Employees of AUO Corporation

455,191,672

4.73

Quanta Computer Inc.

443,930,307

4.61

ADR of AUO Corporation

247,324,189

2.57

Yuanta Taiwan Dividend Plus ETF

157,404,400

1.64

Nan Shan Life Insurance Co., Ltd.

151,860,000

1.58

Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International Equity Index Funds

87,942,549

0.91

Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF

82,360,000

0.86

JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds

81,660,874

0.85

New Labor Pension Fund

76,909,000

0.80

 

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 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 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 which are being executed by the secretary unit of board of directors.

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

 

  • Six Board of Directors meetings, six Audit Committee’s meetings and two Corporate Governance Committee’s meetings were convened in 2021.
  • One Annual General Shareholders' Meeting was convened in 2021.
  • All members of the Board have completed at least six credits of continuing education.
  • One seminar was arranged on Corporate Governance in 2021. The Company invited BlackRock Investment Stewardship to give the seminar on Sustainable Development and Stewardship with all members of Corporate Governance Committee.
  • 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, each director and the functional committees have been processed in the fourth quarter of the year. Evaluation results of each assessment are all "Exceeding Expectations".
  • The results in the 7th Corporate Governance Evaluation has been ranked among Top 5%.
  • In 2021, the chief corporate governance officer has taken 19.5 hours training courses.

Corporate Social Responsibility

The Company's risk management policies have been approved by the Board of Directors in 2020, and were set to be our supreme guiding principles in controlling risk. In accordance with the risk management standards and guidelines of ISO 31000, the Company has formulated corresponding procedures and systems. Through annual risk evaluation and identification, the Company would develop plans to mitigate, transfer or avoid potential risks, aiming for a solid internal structure, hence achieving sustainable operation.

 

Regarding our policy enforcement framework, the Company has established a risk management team under ESG & Climate Committee, which is in charge of implementing the policies approved by the Board of Directors. In respect of risk identification, prevention, monitor, or other major risk management topics, the team would report to the Board of Directors at least once a year.

 

The Chief Financial Officer will review the risk identification work. Risk identification is conducted annually by the various units, including product R&D units, the manufacturing and sales units, as well as the units in charge of finance, legal affairs, human resources, information technology, and environmental safety management, from the perspective of corporate sustainability, e.g. financial considerations such as market risk and liquidity risk, and non-financial risks such as regulatory compliance, information security, climate and environmental protection, and social issues. In addition to mitigating the risks, the Company has been seeking opportunities to counter all the said risks.

The risk identification process involves a quantitative assessment considering the frequency of occurrence, the degree of impact, and the degree of control. It covers dimensions such as finance, strategy, operation, and disaster. By doing so, we have identified 75 types of risks and prioritized them using the matrix analysis diagram.

 

The Company has assessed the 19 mid-high risk scenarios that we may encounter in 2021. External ones mostly surrounded COVID-19 variant virus, port congestion and global low-carbon transition; internal parts included water scarcity and technology R&D.

 

Among which, we've chosen strategy and operation as our main focus scopes this year. In regard to our strategy, the Company responded with active and proper actions and commitments when facing the limited production capacity and the net zero consensus under the COP26. Operation-wise, the Local pandemic and water rationing this year have impacted the supply chain, manufacturing and logistics. In response, the Company has built up responding procedures by collaborating with related departments within the shortest possible timeframe. Higher flexibility toward process improvement has increased our adaptability to potential impacts, and made the systematic structure more complete at the same time.

Ethical Corporate Management

In order to improve the administration of integrity management and establish a corporate culture with integrity management, the company refers to “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”

 

 "AUO Ethical Corporate Management Principles", which is the company's highest integrity policy, was approved by the board of directors in November, 2014.

 

According to "AUO Ethical Corporate Management Principles", the Company establishes “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 participate training courses or advocacy and sign a Statement of Compliance with AUO Supplier / Subcontractors Code of Conduct.

 

Among the above matters, through training, we arranges online integrity management training course for directors and all employees. Being regulated by the Listed OTC Company Management Principles, seven violations are listed in the course content. To enhance the promotion, engaging in business activities in accordance with applicable competition laws and regulations and prohibition on disclosing trade secrets are also included in the course.

 

In 2021, 7 directors and 19,125 employees have completed the 15-minute training course to promote regulatory compliance, such as Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest and other related acts. The completion rate of employees is 96% and total training hours are more than 4,781. As to 1,987 new employees, they have taken the 10-min advocacy session on AUO Integrity Policy and signed integrity statement. The total training hours are more than 331and signing rate is 100%. In addition, The Global Integrity Advocacy is held every year. Integrity-related messages are announced by e-news, mail, and meeting to ensure that all employees, suppliers, and contractor 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 2021, 1,953 supervisors and employees in anti-corruption positions have reported and the reporting rate is 100%.

Employee Benefits and Retirement Policy

1. Employee Welfare Measures

(1) Employees are entitled to labor insurance, National Health Insurance, and group insurance on the first day of work.

(2) The Company has set up a benefits trust fund program, which inspires employees through linking longterm benefit plans with the Company's operating performance.

(3) Apart from monthly salaries, annual bonuses such as those for the Mid-Autumn Festival, Dragon Boat Festival and Lunar new year are also available. Motivation bonuses, performance bonuses, and employee compensations are given in due course based on the Company's profitability.

(4) Staff restaurants are available at each fab site, providing breakfast, lunch, dinner, and late-night meals. Meals are subsidized.

(5) Life plaza that comprises convenience stores, coffee shops, bakeries, fruit bars, and laundry shops is set up within each fab. In addition, special sales events are also launched from time to time to provide affordable daily consumption for our colleagues.

(6) The Company has set up a Wellness Center at each fab. A medical team of professional doctors and nurses are in charge of the employees' well-being. Various health promotion activities are held to provide comprehensive body, mind, and spiritual health care.

(7) Fitness center managed by a professional health management team is built at each fab. Apart from permanent stadiums, fitness equipment, and sports classrooms, irregular courses are given at the request of colleagues.

(8) AUO's Employee Welfare Committee is organized to take care of employees' lives, promote their wellness, and maintain a harmonious labor-management relationship. The committee is responsible for the planning and organizing of staff benefits and various activities such as sports seasons, celebration of festival, club activities, and employee outings. Other benefits and subsidies include those connected to emergency assistance, in-hospitalization, weddings, funerals and other events.

 

2. Retirement Policy and Execution

(1) The Company has provided Retirement Policy.

(2) Supervisory Committee of Workers’ Pension Preparation Fund was established in August 1997 and began to allocate pension in May 1998. The Allocation is based on 2% to 15% of the monthly salary.

(3) Starting from July 2005, the 2nd-tier new labor pension plan was implemented in accordance with the law.

(4) According to the provisions of International Accounting Standard No.19, the actuary is required to conduct evaluation on the pension reserve fund, and submit an actuarial assessment report.