Governance Policy

Eurocharm Holdings’ corporate governance framework is based on Taiwan’s Company Act, Securities and Exchange Act, and other related laws and regulations. The company refers to corporate governance practices in order to establish an effective corporate governance framework that protects the rights and interests of shareholders, strengthens the powers of the Board of Directors, fulfills the function of Audit Committee, respects the rights and interests of stakeholders, and enhances information transparency.

Operating with ethical corporate management is the best practice principle that helps fulfill Eurocharm Holdings’ social responsibilities. Eurocharm Holdings also expects to realize sustainable management and improve business performance through a comprehensive management system.

The company has set up part-time staff in the administrative and financial department and the secretary of the board of directors to be responsible for corporate governance related matters, safeguarding shareholders’ rights and strengthening the functions of the board of directors. The main responsibilities are as follows:

1)      Develop appropriate company system and organizational structure to promote the independence of the board of directors, transparency of the company and compliance with laws and regulations, and implementation of internal control.

2)      Formulate relevant laws and regulations for corporate governance, and pay attention to the revision of laws and regulations, with amendments and discussion of the board of directors.

3)      Consult the board of directors before the board of directors to plan and formulate the agenda, and notify all directors at least 7 days before the meeting to provide relevant meeting materials to facilitate the directors to understand the contents of the relevant proposals; if the contents of the proposal are related to stakeholders The parties should be given appropriate reminders; the major information released by the board of directors after the meeting will be sent to the directors; the proceedings will be sent to the directors within 20 days after the meeting.

Corporate Structure

Board of Directors

Name Position Professional Background
Steven Yu Chairman Lunghwa University of Science and Technology
Eurocharm Holdings Co., Ltd., Chairman
Eurocharm Innovation Co., Ltd., Chairman
Exedy Vietnam Co., Ltd., Director
Taiwan Techno State Co., Ltd., Director
Vietnam Precision Industrial No.1 Co., Ltd., Chairman
Michael Yu Director B.S. in Management, National Chung Hsing University
Eurocharm Holdings Co., Ltd., Director
Eurocharm Innovation Co., Ltd., Director
Taiwan Techno State Co., Ltd., Supervisor
Vietnam Precision Industrial No.1 Co., Ltd., Director
Antonio Yu Director M.S. in Industrial Engineering, University of Wisconsin
Eurocharm Holdings Co., Ltd., Director
Eurocharm Innovation Co., Ltd., Director
Taiwan Techno State Co., Ltd., Chairman
Vietnam Precision Industrial No.1 Co., Ltd., Director
Steven Chang Director Ph.D. in Management, Shanghai Jiao Tong University
CEO & Founder of The CID Group
Quanta Computer lnc., Supervisor
Quanta Storage Inc., Supervisor
Taiflex Scientific Co., Ltd., Director
Vice Chairman, China Venture Capital Association, IAC
Wei-Min Lin Independent Director Ph.D., Accountancy, Jinan University, China
CPA, Auditor of Wei-Min Lin Accounting Firm
Sunplus Technology Co., Ltd., Director
Sunplus Technology Co., Ltd., Supervisor
Bryan Peng Independent Director EMBA, National Chiao Tung University
Double degree in Accouting and International Trade,
Fu Jen Catholic University,Taiwan
Entire Technology Co., Ltd., CFO
Wafer Works Optronics Corp., Supervisor
Entire Investment Corporation., Supervisor
Gen-Yu Fong Independent Director J.D. Cornell University, U.S.A.
Distinguished Professor,National Chengchi University
OBI Pharma, Inc.Independent Director
DelSolar Co., Ltd., Independent Director
Elitegroup Computer Systems Co., Ltd., Independent Director
High Power Opto, Inc., Independent Director

Performance Evaluation of Boards & Directors

The annual performance evaluation is conducted via the Company’s standard self-evaluation or peer review. An independent organization or institution with an expert team is brought in for external evaluation every three years. This external evaluation covers the overall operation of the Board of Directors and the Directors’ self-assessments.

The evaluation measures for the Board of Directors should include the following aspects:

  1. Participation in the Company’s operations
  2. Efficiency of board’s decision-making
  3. Board of Director’s organizational structure
  4. Selections of Board of Directors and their continuing education
  5. Internal control

The evaluation measures for the members of Board of Directors should include the following aspects:

  1. Comprehension of the Company’s objective and plans
  2. Recognition of individual directors’ responsibilities
  3. Participation in the Company’s operations
  4. Internal management and communication
  5. Directors’ Continuing Education
  6. Internal Control

In 2016, the Board of Directors’ performance evaluation is in good standing.

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight of the quality and integrity of the accounting, auditing, reporting, and financial control practices of the Company.

The Audit Committee is responsible to review the Company’s: financial reports; auditing and accounting policies and procedures; internal control systems; material asset or derivatives transactions; material lending funds, endorsements or guarantees; offering or issuance of any equity-type securities; legal compliance; related-party transactions and potential conflicts of interests involving executive officers and directors; corporate risk management; hiring or dismissal of an attesting CPA, or the compensation given thereto; and appointment or discharge of financial, accounting, or internal auditing officers.

Under R.O.C. law, the membership of the Audit Committee shall consist of all independent Directors. EHC’s Audit Committee satisfies this statutory requirement.

Compensation Committee

The Compensation Committee assists the Board in discharging its responsibilities related to EHC’s compensation and benefits policies, plans and programs, and in the evaluation and compensation of EHC’s directors of the Board and executives.

The members of the Compensation Committee are appointed by the Board as required by R.O.C. law. According to EHC’s Compensation Committee Charter, the Committee shall consist of three independent directors of the Board. Currently, the Compensation Committee is comprised of all three independent directors.

Under R.O.C. law, the membership of the Audit Committee shall consist of all independent Directors. EHC’s Audit Committee satisfies this statutory requirement.

Internal Auditing

Internal Audit function is an independent unit that reports directly to the Board of Directors. Besides informing the Board during its ordinary meetings, it briefs the Chairman, the Board Audit Committee on a monthly and on as needed basis.

The charter of Internal Audit is to review the internal controls in the company’s processes and to report on those controls with respect to the adequacy, effectiveness, and efficiency of their design as well as their actual functioning. The scope includes the whole company and its subsidiaries.

The majority of the audit work is executed according to an annual plan, which needs to be approved by the Board of Directors. Special audits or reviews are conducted as needed. The combination of the regular audits and the special projects provide management with feedback on the functioning of the internal control system; it gives management an additional channel to learn about existing or possible future weaknesses in the system and addresses them in a timely manner.

The company supplements the review activities by Internal Audit with documented self-assessments by the departments and operational units. Internal Audit sees to it that these activities do take place, and reviews the submissions to ensure the quality of the process; it consolidates the results of the self-assessments for the Board of Directors.

Meetings among Independent Directors, Internal Auditors and Accountants:

  • The independent directors and accountants shall meet minimum twice a year to discuss the accountants’ report on the Company including the headquarters and its subsidiaries in Audit committee meeting.
  • The internal audit manager shall report to each Independent Director on the Company’s execution of internal auditing and overall operations in Audit committee meeting.

Summary of the previous meetings between Independent Directors and Accountants:

Date Subject Result
2017/08/10
  1. Q2 2017 financial report highlights
  2. Tax regulations (PEM) and IFRSs 15 update
Good communication
2017/11/07
  1. Q3 2017 financial report highlights
  2. Tax regulations update
Good communication

Summary of the previous meetings between Independent Directors and Internal Auditors:

Date Subject Result
2017/03/16
  1. Q4 2016 Audit Report
  2. 2016 Internal Control System Review Report
Good communication
2017/05/11 Q1 2017 Audit Report Good communication
2017/08/10 Q2 2017 Audit Report Good communication
2017/11/07  Q3 2017 Audit Report Good communication

Management Team

Name

Title

Background

Steven Yu Chairman & General Manager EMBA-National Taiwan University
Andy Wu Deputy General Manager – Vietnam Subsidiary Sales & Marketing

Lee-Ming Institute of TechnologyAutomation

Automation Management, Tattong Company

James Zhan Deputy General Manager – Administration & Finance

Business Management- National Taipei University of Business

Associate Manager, Eurocharm Innovation Co., Ltd.

Cina-Jin Zhan Deputy General Manager – Product & Technology

KaiMing Technical and Commercial Vocational School

Manager, Bank SinoPac Shanghai

Robert Lin Deputy General Manager – Taiwan Subsidiary Sales

 National Kaohsiung University

Associate Manager -Product & Technology, Eurocharm Innovation Co., Ltd.

Employee & Labour Relations

Evaluation Item

Implenmentation Status

Yes

No

Illustration

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Does the Company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?

Yes, the Company has established the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”. The information has been disclosed on the Company’s website.

None

Shareholding structure & shareholders’ rights

  1. Does the Company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes, and litigations, and implement based on the procedure
  2. Does the Company possess the list of its major shareholders as well as the ultimate owners of those shares?
  3. Does the Company establish and execute the risk management and firewall system within its conglomerate structure?
  4. Does the Company establish internal rules against insiders trading with undisclosed information?

In addition to the existing hotline and email channels, the Company has established an internal operating procedure and has designated appropriate departments, such as Investor Relations, Public Relations, Legal Department, to handle shareholders’ suggestions, doubts, disputes, and litigation.

The Finance & Shared Services Division is responsible for collecting the updated information of major shareholders and the list of ultimate owners of those shares.

Rules are made to strictly regulate the activities of trading, endorsement, and loans between the Company and its affiliates. In addition, the “Criteria of Internal Control Mechanism for a Public Company”, outlined by the Financial Supervisory Commission when drafting the guidelines for the “Supervision and Governance of Subsidiaries”, was followed in order to implement total risk control with respect to subsidiaries.

To protect shareholders’ rights and fairly treat shareholders, the Company has established the internal rules to forbid insiders trading on undisclosed information. The Company has also strongly advocated these rules in order to prevent any violations.

None

Composition and Responsibilities of the Board of Directors

  1. Does the Board develop and implement a diversified policy for the composition of its members?
  2. Does the Company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?
  3. Does the Company establish a standard to measure the performance of the Board, and implement it annually?
  4. Does the company regularly evaluate the independence of CPAs?

 

Member diversification is considered by the Board members. Factors taken into account include, but are not limited to gender, age, cultures, educational background, race, professional experience, skills, knowledge and terms of service. The Board objectively chooses candidates to meet the goal of member diversification.

In order for the sound supervision and reinforcement of management, the Company established the Nomination and Risk Management Committee in addition to the Remuneration Committee and the Audit Committee. These functional committees shall be responsibilities for the Board of Directors.

The Company has formulated rules and procedures for evaluating the Board’s performance and conducts it annually. The Company uses two methods to evaluate the performance of the Board.

1. Self-assessment of Board members

Board members fill in the” Self-Assessment Questionnaire for Board Members” at the end of each year. To evaluate the performance of each member effectively, the questionnaire contains the following factors:

A. Their grasp of the Company’s goals and missions;

B. Their recognition of director’s duties;

C. Their degree of participation in the Company’s operations;

D. Their management of internal relationships and communications;

E. Their professionalism and continuing professional education;

F. Internal controls.

2. Assessment of the Board:

The Secretary Office of the Board conducts the assessment of the Board’s performance. The following aspects are taken into consideration:

A. The degree of participation in the Company’s operations;

B. Improvement in the quality of decision making by the Board of Directors;

C. The composition and structure of the Board of Directors;

D. The election of the directors and their continuing professional education.

E. Internal controls.

The Company evaluates the independence of CPAs annually, ensuring that that they are not stakeholders such as a Board member, supervisor, shareholder or person paid by the Company.

None
Does the Company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?

The Company provides detailed contact information, including telephone numbers and email addresses in the “Stakeholder Area” section of the corporate website. In addition, personnel is in place to exclusively deal with issues of social responsibility, ensuring that various interested parties have channels to communicate with the Company.

None

Does the Company appoint a professional shareholder service agency to deal with shareholder affairs?

The Company designates Yuanta Securities Co., Ltd. to deal with shareholder affairs.

None

Information Disclosure

  1. Does the Company have a corporate website to disclose both financial standings and the status of corporate governance?
  2. Does the Company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?

The Company has set up a Chinese/English website (www.eurocharm.com.tw) to disclose information regarding the Company’s financials, business and corporate governance status.

The Company has assigned an appropriate person to handle information collection and disclosure. The Company has established a spokesman system. Investor conference information is disclosed on the corporate website.

None

Is there any other important information to facilitate a better understanding of the Company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?

Directors’ and supervisors’ training records: 

Chairman Steven Yu 6H “Best Practices of a Healthy and Dynamic Leader” and “Practical Analysis of Corporate Financial Information”

Director Michael Yu 12H “Ethical Leadership for Listed Companies”, “Professional Director Training for Newly Listed Companies” and “Corporate Governance- Next Stage’s Competitiveness”

Director Antonio Yu 9H “Corporate Governance- Next Stage’s Competitiveness” and “Professional Director Training for Newly Listed Companies”

Director Steven Chang 6H “The 11th International Corporate Governance Summit”

Independent Director Bryan Peng 6H “Preparation of a Consolidated Financial Report” and “Elevate Company’s Value Through Strengthening Internal Governance”

Independent Director Wei-Min Lin 6H “Tax Laws and Regulations in the Second Half of 2015”

Independent Director Gen-Yu Fong 6H “Professional Director Training for Newly Listed Companies”

(2) Board Meetings: The Company has established regulations towards board meetings including the specific procedures, directors’ attendances and the voting rights.

(3) Investor Relations: The Company has a spokesperson system, a litigation representative and a non-litigation representative in the territory of the Republic of China for immediate assistance of the investors, customers, suppliers and other interested parties. News regarding the company’s finances are announced on “MOPS” to provide timely information that may affect the decisions of investors.

(4) Rights of Interested Parties: The Company maintain positive communication channels with banks, employees, customers, suppliers and stakeholders.

(5) Implementation of Risk Management and Evaluation: The Company has established an internal regulations and related management practices.

(6) The Company has purchased liability insurance for its directors and managers since year 2015.

(7) For more information and disclosures, please visit: http://www.eurocharm.com.tw

8. Has the Company implemented a self-evaluation report 2 on corporate governance or has it authorized any other professional organization to conduct such evaluation? If so, please describe the opinion from the Board, the result of self or authorized evaluation, the major deficiencies, suggestions, or improvements.

The Company has not commissioned any professional organizations to conduct evaluations. The evaluations are completed yearly via internal controls and audits for further improvements.

Regulations

  • Setting forth all employee benefits, continuing education, training, retirement systems, and the status of their implementation, as well as the status of agreements between labor and management, and all measures aimed at preserving the rights and interests of employees.
  1. Employee Welfare Measures

Eurocharm values employees as important assets and they key to a successful business. In order to fully take care of the employees, the Company has established the following welfare measures:

For the employees employed at the subsidiary in Taiwan, Eurocharm provides the mandatory health and labour insurance in accordance with the Labour Standard Law in Taiwan as well as travel and accident insurance for the employees going on business trips. In addition, the Company has set up a system for individual retirement accounts to protect employee benefits.

For  the employees employed at the subsidiary in Vietnam, Eurocharm provides the mandatory medical and unemployment insurance in accordance with the Labour Law in Vietnam. In addition, the Company has established a periodic evaluation for promotions, salary adjustments and bonuses as an incentive to raise overall productivity and performance. On special occasions or holidays, the Company collaborates with the trade union hosting activities and dinner parties for employee entertainment.

  1. Advanced Education and Training

Eurocharm regards employee training as highly as the attitude of an employee. In order to accomplish better productivity, both the onboarding training and on-the-job training are essential.

  1. Onboarding Training

All the newly hired employees are subject to attend on boarding training. The training includes understanding the Company’s history, culture, management, safety, workplace environment, production process, quality control and regulatory leal content.

  1. Onboarding Technical Training

Newly hired technical specialists or employees with responsibilities of potentially dangerous attributes are required to attend on boarding technical training and pass the necessary examinations.

  1. On-the-job Training (Including higher management)

The Company, periodically, provides external training program or educational TV programs for the employees and executives.

  1. On-the-job Technical Training

Aside from the foundation of onboarding technical training, additional on-the-job technical training is provided to employees to enhance their current level of skills.

  1. Finance Related Certifications & Licenses

There had been no occurrence of license acquirement in 2015.

  1. Retirement System and Implementation Status

In Taiwan, the Company follows closely with the Labour Standards Act in accordance with regional laws and regulations. Under the system, Eurocharm contributes 6% or more of a worker’s monthly wage into an individual pension account overseen by the Bureau of Labor Insurance.

At Eurocharm’s operating base in Vietnam, the Company has been paying social insurance fees on a monthly basis to the local institution. Once the employee has reaches the legal retirement age, s/he is entitled for pension.

Environmental Health & Safety Policy

The Company has been striving under the the belief of Challenging Excellence to Benefit Society since its establishment in 1974. We are committed to create a safe and healthy environment for both the world and our employees. The strict policies that we abid are equally as important as to earning customer’s trust as a manufacturer.

The following is the direction of our executions:

  • Environmental Protection
  1. Energy saving and carbon reduction: Our major raw material suppliers must build a manufacturing plant GHG inventory data, product carbon footprints and provide specific GHG mitigation measures.
  2. Water resources and management: Our major raw material suppliers must provide information regarding manfacturing plant’s use and discharge of waste water. They are encouraged to learn the concept of water footprints, water resource management and water pollution prevention programs.
  3. Climate Change Risk Management: In recent years, due to the drastic changes in the climate, windstorms, water scarcity, floods have causes countless damages, losses and traffic disruptions. The Company has requested the major raw material suppliers to be prepared for possible emergencies caused by natural disasters.
  • Health and Safety Policy
  1. Staying abreast of global safety and health topics, evaluating risks and opportunities, and establishing a safe working environment.
  2. Proactively collaborating with customers and suppliers to work together towards upgrading supply chain safety and health performance.
  3. Meeting international safety and health reulations and standards.
  4. Continuing to promote environmental safety and hygiene awareness to create a healthy workplace.
  5. Improving management blind spots via presistent auditing activities and safety management reviews.

Regulations

Articles of Incorporation PDF
公司章程(MEMORANDUM AND ARTICLES OF ASSOCIATION) Download PDF
股東會議事規則  Download PDF
董事選舉辦法  Download PDF
董事會議事規則  Download PDF
審計委員會組織規程  Download PDF
資金貸與他人作業程序  Download PDF
背書保證作業程序  Download PDF
衍生性商品交易處理程序  Download PDF
取得或處分資產處理程序  Download PDF
誠信經營作業程序及行為指南  Download PDF
薪資報酬委員會組織規程  Download PDF
公司治理實務守則  Download PDF
內部重大資訊處理暨防範內線交易管理作業程序  Download PDF
企業社會責任實務守則  Download PDF
董事會自我評鑑或同儕評鑑辦法  Download PDF
道德行為準則 Download PDF