HTC 2013 Annual Report Download - page 40

CORPORATE GOVERNANCE CORPORATE GOVERNANCE
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3. The state of the Company's implementation of Corporate Governance,
departures of such implementation from the Corporate Governance
Best-Practice Principles for TSEC / GTSM Listed Companies, and
reasons for departures.
Item Implementation Status
Reason for Non-
implementation
1. Shareholding Structure & Shareholders'
Rights
(1) Method of handling shareholder
suggestions or complaints
(2) The Company's understanding of major
shareholders and the ultimate owners of
these major shareholders
(3) Risk management mechanism and
"firewalls" between the Company and its
affiliates
To protect shareholders' interests, HTC has appointed spokesperson and acting spokesperson
to properly handle any questions, suggestions, or disputes involving shareholders.
The Company has a good understanding of its major shareholders through shareholder
registers provided by stock agents at book closures. HTC also provides information regularly
on pledges and the increase and decrease in shareholdings of shareholders with a more than
10% stake in the company.
The division of responsibilities between HTC and its affiliates with respect to management of
personnel, resources, and finances is clear. Risk assessments are rigorously performed and
appropriate firewalls have been established. HTC conducts business with affiliates based on
the principles of fairness and reasonableness and fully observe the operating Procedures
for transactions with Specific Companies, Enterprise Groups and Related Parties and
other related regulations. Terms and conditions, pricing, and payment methods are clearly
prescribed in contracts to avoid non-arms-length transactions and financial tunneling. When
it is necessary to eliminate non-competition restrictions on directors and managerial officers,
requests are duly submitted to the Shareholders' Meeting and Board for approval.
None
None
None
2. Composition and Responsibilities of the
Board of Directors
(1) Independent Directors
(2) Regular evaluation of external auditors'
independence
At the end-of-term elections for Directors and Supervisors at the 2013 ordinary Shareholders'
Meeting, HTC elected two Independent Directors in accordance with the provisions of the
Securities and Exchange Act; the number of Independent Directors exceeds onefifth of the
total number of Directors.
In 2008, HTC started to have its Supervisors review the independence of CPAs on an annual
basis. Prior to submitting a proposal to change CPA to the Board, the CPA will be interviewed
and his credentials reviewed by the Supervisors to assess his independence.
None
None
3. Communication with Stakeholders HTC provides detailed contact information, including telephone numbers and email
addresses, in the "contact us" section of its corporate website. We also have personnel in
place to exclusively deal with messages to the spokesperson and investor mailboxes so that
various interested parties will have channels to communicate with HTC.
None
4. Information Disclosure
(1) Establishment of a corporate website
to disclose information regarding the
Company's financials, business and
corporate governance
HTC has both Chinese and English websites. Investor information pages provide information
on financial and business issues and corporate governance, while product information pages
provide information relating to our products and services.
None
(2) Other information disclosure channels
(e.g., maintaining an English-language
website, appointing responsible people
to handle information collection and
disclosure, appointing spokespersons,
webcasting investors conference)
HTC has English and Chinese investor relations websites. Dedicated personnel have been
assigned to collect and update information to websites. Chief Financial Officer Chialin Chang
has been appointed spokesperson and a spokesperson email address has been established.
An investors conference is convened online each quarter. Recording and presentation are
posted on the company website after the conference.
None
5. Operation of the Company's Nomination
Committee, or other functional
committees of the Board of Directors
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 Financial Supervisory
Commission of the Executive Yuan on March 18, 2011, the Board of Directors resolved to
adopt the Company's Compensation Committee Charter and the Committee shall consist
of three members who are appointed by resolution of the board of directors. The current
second remuneration committee members are independent director Mr. Chen-Kuo Lin and
independent professional advisor Mr. Ti-Hsiang Wei, per the regulation, the other independent
professional advisor will be appointed by the Board by June 18, 2014. 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.
None
6. In 2008, HTC adopted the "Guidelines for Corporate Governance". Its provisions are based on the Corporate Governance Best-Practice Principles for TSEC/
GTSM Listed Companies, and were drafted with reference to the corporate governance practices of companies in Taiwan and abroad with outstanding
records in that area. Its purpose is to ensure that the Board has the authority to independently supervise corporate operations and to make all decisions
necessary to fulfill its responsibilities to shareholders and society.
(Continued)
Item Implementation Status
7. Other important information helpful
to understanding HTC's corporate
governance practices:
(1) Employee rights and interests and
employee care
HTC's employee code of conduct provides rules and guidelines for employees to follow when involved in company
operations. All employees of the company and its branches and subsidiaries, regardless of their position, level,
or location, need to abide by this code of conduct. Any unlawful conduct, either at the company or otherwise is
prohibited.
HTC is committed to providing a safe and healthy work environment, to respecting individuals and offering fair
equality of opportunity, and to protecting company assets and personal information.
In Relations with Customers and Suppliers, HTC commits to maintaining long-term relationships on a fair and
reasonable basis in order to create win-win partner relationships. In the Conflicts of Interest section, HTC provides
principles of conduct to guide employees.
HTC's hiring policies comply with the relevant laws and regulations and provide fair opportunities to applicants.
Hiring decisions are based on HTC's operational needs, nature of the work, and applicants' abilities. Fair opportunities
are provided to both applicants and employees. There will be absolutely no discrimination on the basis of nonwork-
related factors, such as race, skin color, social position, language, belief, religion, political attillation, family origin,
gender, sexual orientation, marital status, appearance, facial features, mental or physical disabilities, previous union
affiliation, or any other factor protected by government order.
HTC management adheres firmly to the principles of respect for the individual, good faith, and responsibility. These
principles are applied (but not limited) to recruitment, hiring, training, promotion, pay scales, benefits, transfers, and
community activities.
HTC is committed to providing employees with a working environment free of discrimination or harassment (including
sexual harassment). Any form of speech or conduct intended to incite hatred, conduct which could lead to accidental
injury, or discrimination, will be immediately reported to the responsible department for investigation and punishment.
In addition to complying with legal requirements, HTC respects the privacy of its employees and protects their
personal information, and never arbitrarily discloses personal data of employees. Employees are also expected to
abide by this principle in their interactions, and to avoid discussing private matters or secret information of others
(including but not limited to salary and bonus information).
(2) Investor relations HTC carries out its responsibility in the area of investor relations by endeavoring to enhance the transparency and
timeliness of information disclosure. In addition to immediate announcement of material information and information
disclosure, each quarter investor/press conferences are held, with an average of more than 100 institutional investors
from Taiwan and abroad participating. Information is also uploaded to the company website simultaneously.
In addition to the regularly scheduled information disclosures above, HTC also actively participates in investment
seminars held by local and overseas securities firms and investor/press conferences; it also arranges meetings with
domestic and foreign investors in order to further explain financial figures and operational results that have already
been publicly released. Also, more than ten international securities houses routinely publish analyst reports on HTC,
providing investors with independent, professional investment analyses.
HTC's investor relations activities in 2013, were as follows: Throughout the year, HTC frequently participated in investor
conferences in Taiwan, Hong Kong, Singapore, New York, and Beijing, and periodically visited main investors in the
European, American and Asia regions. At the same time, foreign and domestic institutional investors and analysts
frequently visit our investor relations department or contact it by phone. Going forward, HTC will continue to advance
its work in every aspect of investor relations in order to fulfill the responsibilities of a listed company toward its
investors and shareholders.
(3) Supplier relations and rights of
interested parties
HTC has adopted Procedures for Transactions with Specific Companies, Group Enterprises, and Related Parties and
Supplier Integrity Commitment Letter to guarantee the rights and interests of HTC and interested parties. Purchasing
contracts are also signed with suppliers to govern to transactions and cooperative efforts to protect the lawful rights
and interests of all parties.
(4) Professional development of
Directors, Supervisors, and
managerial officers:
HTC Directors and Supervisors voluntarily attend seminars held by professional training institutes as required by law
and regulation. In addition, to further strengthen implementation of corporate governance, regular courses are also
planned on finance, business, commerce, law, and accounting subjects that are related to corporate governance, as
well as courses on internal control and responsibility in connection with preparation of financial reports. Details of
professional development courses taken by Directors, Supervisors, and managerial officers for 2013 can be found in
Appendixes 1 and 2.
(Continued)