Corporate Governance
The Board of Directors is the highest governing body of WNC. In 2023, the average attendance rate of directors at board meetings was 94.4%. Its responsibilities include supervising the lawful operations and financial transparency of the company, approving the appointment, dismissal and remuneration of senior managers, providing strategic guidance to the management team related to the Company’s operations, evaluating the Company’s performance on economic, environmental and social issues, and approving corporate sustainable development related matters proposed by the Sustainable Development Committee, the RBA Committee or functional units. The management team must also report on the Company’s operations status or other important issues to the Board of Directors, and provide reference information and opinions for decision-making of the Board of Directors. To assist the board in its operations and functions, an Audit Committee, Remuneration Committee and a Nominating Committee have been established. For more information on WNCâs Board of Directors, refer to the 2023 WNC Annual Report.
In 2015, the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx) began holding an annual Corporate Governance Evaluation, which evaluates all publicly listed companies in the previous year. WNC has been rated in the top 20% among all publicly traded companies every year since.
Committee Overview
| Committee | Composition | Major responsibilities | Implementation status in 2023 |
|---|---|---|---|
| Audit Committee | All members of the Audit Committee are independent directors, and at least one has accounting or finance expertise. The term for the independent directors on the Committee is three years. Directors may be reelected for consecutive terms. Currently, there are four committee members. | An audit committee meets prior to the Board of Directors meeting every quarter to monitor the execution of WNCâs internal controls and important financial and sales behavior and to communicate and interact with CPAs to effectively supervise company operations and risk management. The audit committeeâs specialized division of duties and independent positions assist the Board of Directors in the execution of its supervisory capacity, raising WNCâs financial standing and credibility. | The Audit Committee meets at least once every quarter. Five meetings were convened in 2023, with an average attendance rate of 90% for all committee members. |
| Remuneration Committee | Currently there are four committee members, all of whom are independent directors. Committee members must invite the Board Chairman or CEO to attend. The members of the remuneration committee recuse themselves from meetings if issues to be discussed involve any personal interests of the members. The committee may also request directors, internal auditors, accountants, legal consultants, and other personnel to attend meetings and to provide them with pertinent and necessary information. | A remuneration committee is responsible for establishing and periodically reviewing the compensation policies, systems, standards, and structure of WNCâs directorâs and managementâs compensation; as well as evaluating and deciding compensation terms. | The Remuneration Committee meets at least twice a year. Meetings may be convened when necessary. Five meetings were convened in 2023, with an average attendance rate of 90% for all committee members. |
| Nominating Committee | The Nominating Committee is composed of five directors, over half of whom are independent directors. The committee is chaired by WNC Chairman Haydn Hsieh, and all committee members have extensive industry experience and are well-connected in the industry. | The primary duties of the committee include selecting and assessing candidates for board members, executive officers, and members of committees under the Board of Directors, formulating and reviewing regulations relating to the establishment, duties and operations of committees under the Board of Directors, and formulating and implementing continuous learning plans for directors. | The Nominating Committee convenes meetings when necessary. One meeting was convened in 2023, with all committee members in attendance. |
Composition and Diversification of Board of Directors
According to the Articles of Incorporation, WNC appoints seven to nine directors, who are elected by the shareholders’ meeting from the list of director candidates in accordance with the candidate nomination system. The directors serve a term of three years and may be reelected for consecutive terms. To ensure that independent directors carry out their duties in an objective manner and prevent long tenures from compromising their independence, none of WNCâs independent directors have served for more than nine years consecutively. The 11th Board of Directors was elected at the 2023 Shareholdersâ Meeting. There are nine directors in total, including three female directors. Two directors hold employee status and four of the nine directors are independent directors. The average tenure of the directors is 10.67 years. To improve decision-making efficiency and carry out the resolutions of the Board of Directors, WNCâs Chairman is also serving as the companyâs Chief Strategy Officer. All directors have extensive experience and qualifications in business, legal affairs, finance, accounting, risk management or corporate business. each of whom provides objective opinions on their professional fields and assists the Board of Directors in making decisions that are most beneficial to the Company and shareholders.
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WNC has established, in Article 20 of the WNC Corporate Governance Best-Practice Principles, and implemented, a diversification policy for the composition of the Board based on its own operations, operations type and development needs. Suitable directors are nominated and selected by evaluating the aspects of basic conditions and values (such as gender, age, etc.), professional background (such as law, accounting, industry, finance, marketing or technology), professional skills and industry experience. The composition of the current Board of Directors of WNC has achieved the management goal of diversification for its Board of Directors:
Goal Management
| Goal Management | Status of achievement |
|---|---|
| The number of directors who concurrently serve as executive officers in WNC does not exceed one-third of the total number of directors. | Goal achieved |
| At least one-third of board members are female. | Goal achieved |
| Independent board members may not serve for more than three terms. | Goal achieved |
| There are board members with inter-disciplinary expertise. | Goal achieved |
| The number of independent board members exceeds the number stipulated by law. | Goal achieved |
Board Training Courses
To ensure that the directors are well-versed in the latest trends in corporate governance, sustainable development and risk management, all directors of WNC are required to complete annual training in accordance with the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies. In 2023, directors completed a total of 27 training sessions, with an average duration of 9.67 hours per director. For detailed information on their training, please refer to the Market Observation Post System or the 2023 WNC Annual Report.
Board Performance Evaluation
To implement corporate governance and optimize the operating efficiency of the Board of Directors, WNC has stipulated WNC Regulations Governing Performance Evaluation of the Board and Functional Committees. The Company conducts performance assessments each year, which cover the overall Board of Directors, functional committees, and individual directors. In addition, WNC commissions an independent, professional external agency or a group composed of external experts/scholars at least once every three years to conduct a performance evaluation on the Board of Directors. The assessment period is from January 1 to December 31 of each year. The performance assessment results are reported to the Board of Directors in the first quarter of the following year, and are disclosed in the Companyâs Annual Report. For details on the performance evaluations for the Board of Directors and functional committees, please refer to the 2023 WNC Annual Report or the WNC website.
The results of internal performance evaluations for the Board of Directors and functional committees in 2023 were âexceeds standardsâ. WNC also commissioned the Taiwan Corporate Governance Association to conduct an external performance evaluation of the Board of Directors. The results from these evaluations were submitted to the Board on March 6, 2024. The results of these evaluations will serve as a reference for the Boardâs continuous improvement of its functions, remuneration setting for the Board and the functional committees, and nomination for directors to serve the next term.
Remuneration Policy
Remuneration of directors is determined in accordance with the Articles of Incorporation, as approved by the shareholders’ meeting. It is set at no more than 1% of the yearâs profits (profit here indicates pretax profit without deducting profit-sharing bonuses for employees and directors), and is paid in cash. Remuneration of directors is determined based on WNCâs overall operational performance, operational risks and development trends of the industry, and the degree of their engagement and their contributions to corporate operations. The related performance evaluation and rationalization of the remuneration is audited by the Remuneration Committee and the Board of Directors and may be reviewed at any time based on practical operational conditions and related laws and regulations to achieve a balance between continuity of operations and risk control.
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The compensation package for each senior manager includes a fixed component of salary, bonuses, and benefits and a variable component of bonuses, dividends (cash/stock), stock (restricted stock / employee stock ownership trust) and stock options. The variable component of compensation is determined based on WNC’s operational performance in the current year. It ranges from 42% to 82% of the total compensation, depending on the position and performance. The remuneration of senior managers is highly linked to WNC’s operational performance. From 2024 onward, said remuneration will also be linked to WNCâs performance in environmental protection, social participation and corporate governance.
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The compensation structure for senior managers has a certain degree of flexibility to dynamically balance the long-term interests of employees, shareholders, and WNC. The fixed items aim to maintain the competitiveness of the company in the industry, and the variable terms are considered based on WNCâs and the individualâs performance. At the beginning of each year, the Remuneration Committee sets the assessment items, goals, and weightings, taking internal and external development into consideration. The compensation for managers is assessed based on personal performance and prevailing salary levels in the industry. The terms are evaluated by the Remuneration Committee and are reported to the Board of Directors for approval. Additionally, external consultants are engaged to ensure alignment of the compensation policy with market trends, environmental factors, and compensation competitiveness.
Recusal
Directors, in relation to agenda items in which they or their represented legal entities have vested interests, adhere to Article 15 of the Rules and Procedures of the Board of Directors Meeting. They disclose significant details of their vested interests during the Board of Directors Meeting. If there is a risk of harm to WNC’s interests, they are excluded from taking part in the discussion and voting and are not allowed to act as proxies for others. If a director’s spouse, immediate family members, or companies with a controlling-subordinate relationship to the director have vested interests in the agenda items, it is considered that the director has a personal vested interest in that matter.
Internal Control Systems
WNC has established, in accordance with the law, an Audit Office, responsible for supervising internal control procedures, annual audits and review of improvement effectiveness of WNC and its subsidiaries. This independent unit reports directly to the Board of Directors and is staffed with a full-time audit supervisor and two auditors.
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Audits are conducted in accordance with a Board-approved audit plan based on identified risks; extraordinary audits may also be conducted when necessary. The supervisor of the Audit Office reports existing deficiencies or potential risks to the relevant manager, reports major issues to the Board of Directors regularly, and to the Chairman and Audit Committee at any time when necessary.
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The Audit Office coordinates evaluation of internal controls and regularly evaluates the applicability of self-assessment surveys to ensure that self-assessment items cover all main operational procedures and can be modified in response to organizational restructuring to ensure that a risk assessment mechanism and review by managers of different levels is implemented. At the same time, the Audit Office supervises each department and WNC subsidiaries to conduct regular self-assessments of the implementation of internal control systems, and reviews their self-assessment reports. The reports and the findings of the audited department regarding internal control deficiencies and abnormalities serve as the main basis for the Board of Directors and the General Manager to evaluate the overall effectiveness of the internal control system and issue an Internal Control System Statement.
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The internal control system deficiencies and abnormalities identified during the audit are tracked and reported on a regular basis to ensure that the relevant departments have taken corrective actions. The audit report and tracking report are submitted to the Audit Committee for review by the end of the following month after completion of the audit items. In addition to regular reporting to the Audit Committee, the audit supervisor also presents a report to the Board of Directors.