Corporate Governance Practice

The Company passed the Rules and Procedures on Evaluating the Performance of the Board and Functional Committees to enhance efficiency, under which the Remuneration and Nomination Committee conducts an analysis and submits a report on proposed improvements to the board after an annual performance evaluation and uses it as a reference for remuneration and re- appointment. The performance evaluation was completed through self-assessments by board members (Assessment Report), which covered evaluations of the performance of the board, board members and functional committees. Both the board and committees performed well, with an average rating of over 4.97, with 5 being the highest score.

The Company appointed the Taiwan Corporate Governance Association (TCGA) to conduct its board evaluation in January 2024. The evaluation, covering the period from April 1, 2023 to March 31, 2024, focused on eight aspects: composition, guidelines, authorization, supervision, communication, internal controls and risks, self-discipline and support systems. The report was issued on May 27, 2024, and presented to the Board of Directors by the Remuneration and Nomination Committee on August 5, 2024. The results of the evaluation and proposed are as follows:

A. Comments：

(a)The company values the professional and diverse capabilities of the Board of Directors. The selection of board members is based on the company’s development strategy, seeking suitable candidates from various fields. The Board consists of nine members, with more than half being independent directors (including one female director). The five independent directors are proactive and responsible, actively participating in various special discussions (such as strategy development, new technological knowledge, mergers and acquisitions, investment management, etc.) in addition to regular meetings. With a forward-looking and international perspective, they remind the management team and fully assist the Board in fulfilling its guiding and supervisory functions.

(b)The leadership style of Chairman is open and receptive to suggestions, fostering a team environment where board members feel free to speak their minds fully. In important decisions and issues (such as the group's investment strategy), the opinions of independent directors are fully respected. This clearly demonstrates the proactive and open culture of the board's deliberations, which is commendable.

(c)Each year, the board of directors sets the Balanced Scorecard (BSC) goals for the general manager, which serve as the performance targets for the entire company. The assessment indicators include both financial and non-financial metrics, with approximately 30% linked to ESG (Environmental, Social, and Governance) performance. The achievement of ESG goals is tied to compensation, helping to realize the company's sustainability objectives.

(d)The company has a comprehensive supervision mechanism for its reinvested businesses, which includes thorough pre-investment evaluations and post-investment management. The audit unit regularly compiles and reports the internal audit results of significant reinvested companies to the board of directors. Additionally, managers of key subsidiaries regularly report to the board, ensuring a complete management mechanism and proactive risk control implementation.

(e)From the perspective of the 5Cs (Compliance, Culture, Communication, Collaboration, Competency), observing the functions and operations of the company's board of directors reveals that all board members possess professional competencies, adhere to legal regulations, maintain comprehensive internal and external communication mechanisms, collaborate fully with the management team and have fostered a culture of effective board operation.

B. Suggestions:

(a)The company has established multiple committees (including the Audit Committee, Remuneration and Nomination Committee, ESG Steering Committee, Cyber Security and Data Privacy Protection Committee, and Risk Management Committee). There may be similarities and overlaps in the functions and responsibilities of these committees, and their degree of subordination to the board varies. It is recommended that the company periodically review the organizational regulations of each committee (including the feasibility of consolidation) according to operational development needs to enhance the effectiveness of their operations.

(b)To help stakeholders better understand the structure and operations of the functional committees under the board of directors and other management-level committees, it is recommended that the company uniformly and clearly disclose relevant information, such as the organizational structure, division of responsibilities, and reporting methods of each committee, on various communication platforms (e.g., website, annual report, and sustainability report, etc.).

The Audit Committee is authorized to evaluate the independence of the CPAs according to the “Bulletin of Norm of Professional Ethics for Certified Public Accountant of the Republic of China” and “Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies” on a quarterly basis based on the following criteria:

• The CPAs neither serve as a director/supervisor /manager nor hold a position with major influence in the Company or its subsidiaries. Neither are they related parties nor do they have direct or indirect interests that conflict with the Company’s.
• The Company has not engaged the services of the same CPA for seven consecutive years.
• The CPAs should provide the Company with a Declaration of Independence on a periodic basis. All CPAs engaged by the Company have fulfilled the aforementioned criteria.