HTC 2014 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
YES NO Summary
1. Whether the company has adopted and revealed principles
for practice of corporate governance in accordance with
"Corporate Governance Best Practice Principles for TWSE/
GTSM Listed Companies"?
v In 2014, HTC adopted the“HTC Corporate Governance Principles”.
Its provisions are based on the Corporate Governance Best-Practice
Principles for TSEC/GTSM Listed Companies and are announced in
the English and Chinese investor relations websites.
None
2. Shareholding Structure & Shareholders' Rights
(1) Whether the company has the internal operation
procedures of handling shareholder suggestions, questions,
lawsuits or complaints, and proceed by complying with the
procedures.
v To protect shareholders' interests, HTC has appointed spokesperson
and acting spokesperson to properly handle any questions, suggestions,
or disputes involving shareholders.
None
(2) Whether the company understands the major shareholders
and the ultimate owners of these major shareholders.
v 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.
None
(3) Whether the company sets up and executing of risk
management mechanism and "firewalls" between the
company and its affiliates
v 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
(4)Whether the company has adopted internal rules to forbid
against use of unpublicized information in the market by
internal staffs for purchase of priced stocks?
v The company has adopted the“Operational Procedures for Handling
Material Inside Information and Preventing Insider Tranding”. It
governs purchase and sale of priced stocks by internal staffs.
None
3. Composition and Responsibilities of the Board of Directors
(1) Whether the Board of Directors has adopted guidelines
for diversity of composing members and has put the
guidelines into full practice?
v In the“Principles for practice of corporate governance”, the company
has specified that knowledge, skills, and trainings be considered when
nominating a Board member and Supervisor. Also in consideration is
gender equality that contributes to diversity of Board members. Rules
given in the principles should be carried out in full.
None
(2) Whether the company is willing to set up various other
functional committees, in addition to the committees for
salaries/compensations and auditing set up according to
the law?
v For the purpose of developing supervision functions and strengthening
management mechanisms, the Board of Directors of the Company
may, taking into account the size of the Board and the number of the
Independent Directors, set up remuneration or any other functional
committees.
Considering
the number of
the Indepent
Directors, HTC
has only set up
the remuneration
committees.
(3) Whether the company has adopted rules and methods
for assessment on performances of the Board that will be
carried out annually on a regular basis?
v The company has adopted“Rules Regarding Organization for the
Salary and Compensation Committee”where rules and methods are
specified for assessment on performance of the Board. Under periodic
reviews are annual and long-term goals for performance of the Board,
as well as policies, rules, standards, and structures for the salary and
compensation.
None
(4) Whether the company will regularly assess independence
of its certified accountants?
v 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
(Continued)
Item
Implementation Status Reason for Non-
implementation
YES NO Summary
4. Whether the company
has established a channel
for communicating with
Stakeholders, set up a section
for Stakeholders on the
company website, and properly
responded to important
topics regarding corporate
social responsibilities that
Stakeholder care about?
v 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
5. Whether the company has
delegated a professional
shareholder services agency for
handing AGM affairs?
v The company has delegated China Trust Commercial Bank to be the shareholder service agency for handling
AGM affairs.
None
6. Information Disclosure
(1) Establishment of a
corporate website to disclose
information regarding
the Company's financials,
business and corporate
governance
v HTC has both Chinese and English websites. HTC Investors pages provide information on financial and
business and corporate governance, while PRODUCTS 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)
v 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 investor conference is convened online each
quarter. Recording and presentation are posted on the company website after the conference.
None
7. Other important information
helpful to understanding HTC's
corporate governance practices
(including but not limited in
employee rights and interests,
employee care, investor
relations, supplier relations
and rights of Stakeholders,
professional development of the
Board of Directors, Supervisors,
and managerial officers,
status of implementation
of risk management
policies and standards for
measurement of risk, status
of customer-protection policy
implementation, and liability
insurance provided by HTC
to the Board of Directors and
Supervisors) :
v (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
in“HTC's Code of Conduct”, 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).
(Continued)