HTC 2007 Annual Report Download - page 36

THE CORPORATE GOVERNANCE REPORT
67
3. Assessment of goals for enhancing functions of the board during
current and preceding fiscal years (such as establishing an audit
committee and increasing transparency) and the status of
implementation.
> At the time of the end-of-term elections for directors and
supervisors in the 2007 fiscal year, the HTC voluntarily selected
two independent directors in accordance with the provisions of the
Securities and Exchange Act in order to create sound corporate
governance, strengthen the independence and functions of
directors, and enhance the operational effectiveness of the board of
directors.
> In accordance with provisions of the Compensation Committee
Articles of Incorporation drafted by the board of directors, i.e., that
the Compensation Committee shall be composed of three directors
with the chairman of the board as ex officio chairman and the
remaining two appointed by the board of directors, and that it shall
include at least one independent director, HTC also, in its board of
directors meeting of 22 June 2007, appointed director HT Cho and
independent director Chen-Kuo Lin to the Compensation
Committee, while Chairman Cher Wang was made its chairman.
The principal duties of the Compensation Committee include
assisting the board of directors in supervising the company's
compensation system and making appropriate recommendations to
the board.
> In the future, HTC will also plan for establishment in phases of an
audit committee in order to strengthen the functions of the board of
directors and enhance corporate governance. Currently, prior to the
establishment of the audit committee, some of its functions are
performed by the supervisors meetings. That is, in accordance with
Article 14-5 of the Securities and Exchange Act, matters intended to
be handled by resolution of the audit committee may first be passed
with no opinion by the supervisors meeting and submitted to the
board of directors meeting for deliberation and voting. In addition,
regular supervisors meetings are convened on a quarterly basis to
hear reports on important financial, legal compliance, and internal
auditing matters, among which is included a joint assessment with
the supervisors and CPA on the principles and appropriateness of
66
2. THE STATE O F THE COMPANY'S IMPLEMENTATION O F CORPORATE GOVERNANCE :
(1) Th e S t a t e o f Op e r a t i ons o f Th e Bo a rd o f D i r e c t ors :
>Th e Bo a rd o f D i r e c t ors c ondu c t e d S e v e n M ee t i ngs i n 2007. Th e D i r e c t ors a nd Sup e rv i sors' a tt e nd a n c e s t a t us i s a s
f o ll ows :
Addendance in By Proxy Attendance Rate in Person
Title Name (Note 1) Person (B) (%) [B/A] (Note 2) Notes
Chairman Cher Wang 7 0 100.00% Elected again in 06/20/2007 Shareholders' Meeting.
Director HT Cho 7 0 100.00% Elected again in 06/20/2007 Shareholders' Meeting.
Director Wen-Chi Chen 6 1 85.71% Elected again in 06/20/2007 Shareholders' Meeting.
Director Yue-Jiang Yu 0 1 0.00% Resigned after 06/20/2007 Shareholders' Meeting.
Independent Director Hong-Chung Hsieh 0 1 0.00% Resigned after 06/20/2007 Shareholders' Meeting.
Independent Director Chen-Kuo Lin 3 0 100.00% New elected in 06/20/2007 Shareholders' Meeting.
Independent Director Josef Felder 3 0 100.00% New elected in 06/20/2007 Shareholders' Meeting.
Supervisor Wei-Chi Investment Co., Ltd. 3 0 42.86% Elected again in 06/20/2007 Shareholders' Meeting.
Representative: Shao-Lun Lee
Independent Supervisor Mao-Song Chang 1 0 25.00% Resigned after 06/20/2007 Shareholders' Meeting.
Independent Supervisor Su-Lan Jiang 1 0 25.00% Resigned after 06/20/2007 Shareholders' Meeting.
Supervisor Po-Cheng Ko 3 0 100.00% New elected in 06/20/2007 Shareholders' Meeting.
Supervisor Caleb Ou-Yang 1 0 33.33% New elected in 06/20/2007 Shareholders' Meeting.
CORPORATE G OVERNA NCE l OPERATIONS O F THE BOARD O F DIRECTORS l
IV
Other matters to be included:
1. For the matters listed under Article 14-3 of the Securities and
Exchange Act and other matters on which independent directors have
expressed opposition or reservations for which there is a written
record or a written statement of a board of director's resolution, the
date, period, content of related proposals, and the opinions of all
independent directors and the company's response to the opinions
must be given.
There were no independent directors expressing opposition or
reservation with respect to any board of directors meeting during the
preceding fiscal year, and no written record or written statement of
related board resolutions.
2. For implementation of director recusal for proposals involving
personal interests, the name of the director, content of the proposal,
reason for the recusal, and participation in voting must be given.
> Director: HT Cho
Proposal content: Deliberation on amendment of HTC's proposed
rules for donations and on allocation of NT$ 300 million for
donation to the HTC Education Foundation.
Reason for recusal and participation in voting: As chairman of the
HTC Education Foundation, Director HT Cho voluntarily recused
himself and did not participate in deliberation or voting on the two
proposals.
the various allowances and reserves set out in the financial
statement, in order to enhance appropriate expression of those
matters in HTC financial reports.
> HTC has also been endeavoring in recent years to enhance the
timeliness and transparency of its information disclosure. In
addition to making timely posts of important information on
financial and business matters on the Market Observation Post
System, HTC also provides early announcement of its monthly
revenues, and at the beginning of the month following the end of
each quarter, it announces its preliminary revenue figures, while
also convening online investor conferences on a regular, quarterly
basis to allow investors timely access to information on company
operations and performance in each quarter. HTC's investor
relations website was completely redesigned in March of 2008 with
additional information disclosure items and English webpage
content in order to increase the adequacy of disclosure and allow
investors more timely access to important HTC financial and
business information.
N ote 1: For juristic person directors and supervisors, the na m es of the juristic person ' s
shareholders and its representatives shall be disclosed.
N ote 2: W hen a director or supervisor leaves his post prior to the closing date of the fiscal
year, the date shall be noted in the
" notes " colu m n and their attendance rate ( as a
percentage
) calculated based on the ratio of the nu m ber of directors m eetings
during their ter
m to the actual nu m ber of m eetings at which they attended or
observed.
If an election for directors or supervisors is held prior to the closing date of the
fiscal year, the old and new directors and supervisors shall be listed, and a
designation placed in the
" notes " colu m n beside each indicating the date of the
election and whether each is new, old, or serving successive ter
m s. Their
attendance rates
( as a percentages ) shall be calculated based on the ratio of the
nu
m ber of directors m eetings during their ter m to the actual nu m ber of m eetings at
which they attended or observed.
(2) S t a t us o f Aud i t Comm i tt ee Op e r a t i ons
>HTC c urr e n t l y h a s t wo i nd e p e nd e n t d i r e c t ors a nd
do e s no t qu a li f y t o e s t a b li sh a n a ud i t c omm i tt ee
und e r t h e S e c ur i t i e s a nd Ex c h a ng e A c t . Som e
f un c t i ons o f a n a ud i t c omm i tt ee a r e c urr e n t l y c a rr i e d
ou t by t h e sup e rv i sors m ee t i ngs.