HTC 2012 Annual Report Download - page 36

(4) HTC has also been endeavoring in recent years to enhance the timeliness and transparency of its information
disclosure. In addition to making timely posting of important financial and business information on the Market
Observation Post System, HTC also convenes online investor conferences on a quarterly basis to allow investors
timely access to information on the company's operations and performance. In December 2008, the HTC Investor
Relations Website was revised. A special corporate governance page was added along with disclosures of financial
information. HTC achieved "A+" rating for the first time in the sixth Information Disclosure and Transparency Ranking
organized by the Securities and Futures Institue (SFI) and achieved "A+" rating for three consecutive years. HTC
was recognized as one of the top 10 public companies with "A+" ratings in the seventh evaluation and A++ ratings in
the ninth evaluation.
2. Supervisor participation in Board of Directors meetings
The Board of Directors conducted nine (A) meetings in 2012. The Supervisors' attendance status is as follows :
Title Name Addendance in
Person (B)
Attendance Rate (%)
[B/A] Notes
Supervisor Wei-Chi Investment Co., Ltd.
Representative: Shao-Lun Lee 8 88.89%
Supervisor Huang-ChiehChu 9 100%
Supervisor Caleb Ou-Yang 0 0% Caleb Ou-Yang left office on
2012.05.07.
Other matters to be included:
1. Composition and Responsibilities of Supervisors:
The structure of the Supervisors' Meetings at HTC is well established and it carries out some functions at the audit
committee.
(1) Supervisor communication with employees and shareholders (e.g., channels and methods of communication)
Supervisors can make use of channels such as Supervisors Meetings, Board of Directors meetings, Shareholders
Meetings, and internal audit reports to communicate with management-level officers and with shareholders.
(2) Supervisor communication with Chief Internal Auditor and CPAs (e.g., financial and operational matters on which
they communicate, their methods, and results)
HTC Supervisors communicate through their regular quarterly Supervisor Meetings with HTC's financial, legal, and
internal audit officers, who report to the Supervisors on issues such as risk management, major litigations, and
internal audit reports.
Based on the principle of sound, conservative accounting, HTC's Supervisors and CPAs regularly undertake joint
reviews of major account items in the financial statements to assess the reasonableness of basic assumptions
underlying various allowances and reserves. Assessments are also performed and reserves taken against potential
liabilities associated with intellectual property risks in order to reduce the impact on HTC's finances.
Supervisors also hold regular private meetings with CPAs. Supervisors must first review and be satisfied with
the CPA's independence and professional fees before such matters are submitted to the Board of Directors for
resolution.
In 2012, the management team continuously emphasized and provided full support on corporate governance.
Headquarters actively reviewed and enhanced the processes of supervision and management of subsidiaries, and
developed global policies and procedures. All departments in the company conducted risk-oriented internal control
assessment to evaluate the controls' efficiency and effectiveness, for the purpose of improving the internal control
system. In the area of internal control self-assessment, HTC has asked all departments to evaluate the efficiency
and effectiveness of their controls' design and execution to ensure the concreteness and transparency of the internal
control statement. All departments were required to issue individual internal control statements based on their
evaluation results and the company would issue the internal control statement based on individual department
evaluation results.
2. If Supervisors in attendance at a Board meeting state opinions, the meeting date, session number, agenda, and result of
resolutions must be noted, along with the company's handling of the Supervisors' opinions.
There has been no instance of a Supervisor expressing a dissenting opinion regarding a Board resolution during the most
recent fiscal year.
2. The State of the Company's Implementation of Corporate
Governance:
1. The State of Operations of The Board of Directors:
The Board of Directors conducted Nine (A) meetings in 2012. The Directors and Supervisors' attendance status
is as follows :
Title Name Addendance in
Person (B) By Proxy Attendance Rate in
Person(%) [B/A] Notes
Chairman Cher Wang 9 0 100%
Director Wen-Chi Chen 7 2 77.78%
Director HT Cho 9 0 100%
Director Tan Ho-Chen 9 0 100%
Director David Bruce Yoffie 3 6 33.33%
Independent
Director Chen-Kuo Lin 9 0 100%
Independent
Director Josef Felder 4 5 44.44%
Supervisor
Wei-Chi Investment Co.,
Ltd. Representative:
Shao-Lun Lee
8 0 88.89%
Supervisor Huang-ChiehChu 9 0 100%
Supervisor Caleb Ou-Yang 0 0 0% Caleb Ou-Yang left office
on 2012.05.07.
Other matters to be included:
1. There was no independent director 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. There was no Directors' abstention from discussion due to conflicts of interests in 2012.
3. Measures taken to strengthen the functionality of the Board of Directors and the status of implementation during
current and preceding fiscal years:
(1) At the time of end-of-term elections for Directors and Supervisors in the 2010 fiscal year, HTC selected two
Independent Directors in accordance with the provisions of the Securities and Exchange Act in order to strengthen
the independence and functions of Directors and enhance the operational effectiveness of the Board. In 2008, the
"Guidelines for Corporate Governance" were completed and adopted, guaranteeing that the Board of Directors
has the authority to independently supervise corporate operations and to make all decisions necessary to fulfill its
responsibilities to shareholders and to society.
(2) In compliance with the Regulations Governing the Appointment and Exercise of Powers by the Remuneration
Committee of a Company whose stock is listed on the Stock Exchange or traded over the counter as per Letter
No. 1000009747 issued by the Executive Yuan Financial Supervisory Commission on March 18, 2011, the Company
formulated the Compensation Committee Charter and under which appointing Independent Director Mr. Chen-Kuo
Lin; Director Mr. HT Cho and independent professional advisor Mr. Harvey Chang to the Compensation Committee.
The official functions of the Committee are to professionally and objectively evaluate the policies and systems for
the compensation of HTC directors, supervisors, and managers, and submit recommendations to the board of
directors for its reference in decision making.
(3) Currently, prior to the establishment of the audit committee, some of the committee's functions are performed
by the Supervisors meetings. Regular Supervisors meetings are convened on a quarterly basis to hear reports on
important financial, legal, and internal audit matters. There is also a joint assessment between the Supervisors and
CPA on the principles and appropriateness of various allowances and reserves in the financial statements.
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