Company Philosophy

Novatek commits to integrity and acts complied with government laws and regulations to provide sufficient operational transparency and respect for shareholder rights. The Company's Board of directors consists of industry seniors with profound professional experiences and related expertise. The Remuneration Committee and the Audit Committee are constructed under supervision by the Board of directors to further reinforce the Company's internal operation and corporate governance.

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Corporate Governance Officer

Corporate Governance

 

 

  

 

The Board of Directors appointed Mr. Shen-Cheng, Chou, the Financial Officer of Novatek, as the Corporate Governance Officer responsible for corporate governance matters, including handling of matters relating to Board, Audit Committee, Compensation Committee and Shareholders' meetings in compliance with law, assistance in onboarding and continuing education of directors, provision of information required for performance of duties by directors, and assistance in directors' compliance of law, etc.

2023 Training Information

Training Institution

Name of the course

Hours

Taiwan Corporate Governance Association Practice of "Sustainability Report" under Corporate Governance 3.0 Policy
Taiwan Corporate Governance Association Understanding Venture Capital Investment Terms and Conditions - a primer for corporate VC
Taiwan Corporate Governance Association Sustainability KPI and Executive's Remuneration
Taiwan Corporate Governance Association Enterprise Risk Management Structure and Sharing of Practical Experience
Accounting Research and Development Foundation “Advanced Program for the Continuing Education of Accounting Supervisors of Issuers, Securities Firms, and Securities Exchanges: Corporate Governance”
Accounting Research and Development Foundation “Advanced Program for the Continuing Education of Accounting Supervisors of Issuers, Securities Firms, and Securities Exchanges: Finance” 3 
Accounting Research and Development Foundation  “Advanced Program for the Continuing Education of Accounting Supervisors of Issuers, Securities Firms, and Securities Exchanges: Professional Ethics and Legal Liability” 6
Total 24
 

2023 Implementation of  Corporate Governance

  • According to the 9th term Corporate Governance Evaluation results, the Company was ranked in the top 5%.
  • The Company purchased NT$100 million in general bank debentures (short name:P12 TCB 1) from Taiwan Cooperative Bank in 2023, which were approved for OTC sustainable development bonds qualification.
  • The shareholders meeting operation and meeting data were all completed and announced in accordance with the statutory deadline.
  • As required by regulations, the agenda data of meetings held by the Board of Directors or functional committees have been provided to each director at least 7 days prior to the meeting, the meeting minutes have been offered within 20 days after the meeting and inquiries from directors have been responded promptly and completely.
  • The Risk Management Committee and ESG Sustainability Committee of the Company reported the Company's risk monitoring results and response strategies (including climate change risks and opportunities) to the Audit Committee and the Board of Directors on a regular basis, which is helpful for the Board to supervise.
  • In 2023, internal self-evaluation was adopted to complete the performance evaluation of the Board of Directors, functional committees and individual directors.
  • Director' s training courses: In 2023, the information of external advanced study courses for directors was provided every quarter to assist directors in arranging their advanced studies, and Taiwan Corporate Governance Association was delegated to arrange “home tutoring” advanced studies for the board members in July. All of the directors completed at least 6 hours of advanced studies in 2023.
  • In 2023, thirty million US dollars of liability insurance was taken out for its directors.
  • In 2023, the independent directors and the audit supervisor held three individual meetings, and the communication was smooth.
  • In 2023, the independent directors and the CPAs held four individual meetings, and the communication was smooth.

Ethics and Integrity

Trustworthiness is one of Novatek’s mottos while all employees are asked to obey and follow. In order to ensure the implementation of the integrity management, Novatek has formulated the “Anti-Corruption, Anti-Bribery Commitment”, ”Ethical Corporate Management Principles” and “Procedures for Ethical Management and Guidelines for Conduct” and assigned Legal Division and Human Resources Division responsible for the monitoring and implementation of ethical management policies and prevention programs. 

 

Novatek also sets the internal and external reporting mechanisms for violations of integrity management and whistle-blower protection stipulated in “Regulations Governing Grievance and Whistleblowing”. The internal and external reporting mailboxes will automatically forward a copy of the report to the Audit Committee, Audit Manager and Intellectual property & legal Manager.

 

In 2021, two reports were received through the external reporting mailbox. After investigation, no reasonable evidence was found to show the violation of integrity of management by the employees of Novatek.

 

The online course of “Advocacy of Integrity Management Behaviors” has been organized for the entire staff once a year, and the content of this course includes the six major topics of processing of major internal information, prevention of insider transaction, avoidance of conflict of interests, protection of trade secret, integrity management, and informing channel. The advocacy of relevant information has been conducted once every six months.

 

2023 Ethics and Integrity Training Information

Novatek has completed the above-mentioned course in September 2022 and 2023. Personnel eligible for the course include full-time employees and contract employees. The course materials, including presentation slides and related video files, were archived in the internal system. If employees are not clear about the content of the Principles of Ethical Corporate Management, they can consult the Human Resources Department and the Legal Department for more information.

 

Year

Name of the Course

Number of People Completing the Course

Completion Rate for all Employees

2023

Promotion of Integrity Management Practices

2,985

99.87%

2022 Promotion of Integrity Management Practices

2,806

99.96%

 

 

2023 Anti-Corruption Training Information

Type

 Number of People Applicable for the Training Number of People Completing the Training Completion Rate
Gender Male 2,513  2,510 99.88%
 Female 476 475 99.79%
Position  Regular employees  2,643 2,639 99.85%
 Supervisors 338 338 100.0%
 Directors 8  8 100.0%

 

2023 Intellectual Property and Legal Affairs Training Information

Novatek has completed the following courses in 2023. Personnel eligible for the course include full-time employees and contract employees. The course materials, including presentation slides and related video files, were archived in the internal education and training system.  

Name of the Course

Completion Rate for all Employees

Number of People Completing the Course

Trade Secrets Act

90%

2,680

Personal Data Protection Act

95%

2,840

 

Management-level Succession Planning

Company’s management-level personnel must not only possess outstanding professional abilities and substantial abilities in terms of work execution, but at the same time, they must also fulfill our business philosophy of integrity, create sustainable corporate value, and implement Novatek’s corporate social responsibility.

To meet with the development of the Group’s organization, the Company continues to dynamically cultivate potential middle and senior management personnel through the following programs:

Expertise Development Training for Middle and Senior Management

Job Rotation Experiential Learning

Regular Goal-oriented Assessments

 

The Company’s Human Resources Department conducts annual assessments of the talent development program and training courses for middle and senior management based on the criteria of “organizational and strategic leadership competency”. It also invites promising supervisors to study specific topics alongside middle and senior management personnel and engage in a mutual exchange of ideas, thereby promoting a sustainable culture of mentorship at the management level. “Organizational and strategic leadership competency” is defined as the knowledge and skill requirements for middle and senior management. It encompasses competencies such as business acumen, strategic influence, organizational synergy, talent cultivation, and change and innovation. In 2023, middle and senior management personnel completed over 20 hours of study in various competency courses, including “Transforming Leadership”, “Business Leadership Models (BLM)”, and “Organizational Development Strategies: Qisda’s ‘Grand Fleet’ Transformation Strategy and Post-investment Management Philosophy”. These courses enhanced management proficiency in the areas of strategy implementation and logical thought, and the knowledge was practically applied to analyze the key points of business strategies, grasp risks and opportunities, and preemptively create and implement action plans.

 

To provide the critical ESG knowledge required for the Company’s sustainable development, the Human Resources Department launched a methodical, targeted, continuous series of lectures aimed at elevating the management team’s understanding of global ESG trends and industrial development dynamics. The 2023 lecture series included courses on “ESGs, Carbon, and Sustainable Management: Building the Company’s Green Competitiveness”, “Introduction to Internal Carbon Pricing and its Trends”, and “2023 Risk Management Education and Training”. These courses explored how sustainable development goals can be integrated into the company’s operations strategy to improve corporate governance and sustainability performance. Additionally, specialized courses on industrial dynamics and forward-looking technology were offered to meet the needs of different managers and strengthen the management team’s professional capabilities.

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The Company attaches great importance to learning through practical experience. In addition to the performance of different project tasks during normal working hours, participation in monthly business meetings and regular senior executive strategy meetings, reviews and evaluations are also carried out, and job rotations or participation in external assignment projects are arranged every year. This is to allow management-level candidate successors to accrue experience in business management practices and foster an all-round business management vision, to improve their business management capabilities and mental dexterity, cultivate their decision-making and judgment abilities, and integrate these qualities into their positions.

 

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The Company conducts annual performance assessments to examine the achievements of middle and senior management personnel; these assessments serve as a reference when awarding promotions and reviewing individual salaries and compensation at the management level. Moreover, the Human Resources Department has designed and implemented a comprehensive mentorship and talent development mechanism, through which it defines key positions and periodically evaluates the list of promising middle and senior management candidates. This ensures that the senior leadership team always has an ample pool of high-quality successors.

Functional Committee and Policies

Novatek’s Board of Directors consists of eight distinguished members with a great breadth of industry experiences or professionals. Three of those eight members are Independent Directors. For the purpose of developing supervisory functions and strengthening management mechanisms, the Company has established the Audit Committee and Remuneration Committee, which be responsible to the board of directors and submit their proposals to the board of directors for approval.

Board of Directors

Novatek’s directors, one of whom is female, have industrial experience in more than 4 different industries including the semiconductor industry, panel industry, computer information industry and investment industry or academia, etc. The current Board of Directors consists of three independent directors, three external directors and two directors who are employees of the Company (accounting for 37.5%, 37.5% and 25% of all directors, respectively).

Chairman

Tai-Shung, Ho

Vice Chairman

Steve Wang

Institutional Director

United Microelectronics Corp. (UMC)

Representative of Institutional Director

Chi-Tung, Liu

Director

Max Wu

Director

J.H. Chang

Independent Director

Jack Tsai

Independent Director

Jack Liu

Independent Director

TingTing Hwang

Responsibilities of the Board of Directors

The responsibilities of Novatek Microelectronic’s Board of Directors are to assist management in the formulation of short, medium and long-term strategic plans which correspond with corporate objectives and meet the expectations of our shareholders and stakeholders, and to vigorously implement the responsibilities of executive supervision, convening meetings every quarter, and maintaining excellent communication with the management level.

 

Subject Matters of Resolutions in 2023:

Date

Meeting

Resolutions

2023.02.24 The 8th meeting of the 9th Board
  • Approved 2022 business report and financial statements.
  • Approved 2022 internal control statement.
  • Approved the announcement of no lending funds to other parties in the fourth quarter of 2022.
  • Approved the construction of an office building in the Southern Taiwan Science Park.
  • Approved to set up a US subsidiary through direct investment.
  • Amended the Company’s “Articles of Incorporation”.
  • Acceptance of the date, location and agenda for 2023 shareholders’ meeting.
  • Approved 2023 business plan and capital expenditure budget plan.
  • Donation to the “Novatek Educational Foundation”.
2023.03.31 The 9th meeting of the 9th Board
  • 2023 CPA’s independence and competency assessment.
  • Approved the capital increase in subsidiary Cheertek International Ltd.
  • Approved the distribution of 2022 profits.
2023.04.28 The 10th meeting of the 9th Board
  • Approved 2023 Q1 consolidated financial statements.
  • Approved the announcement of no lending funds to other parties in the first quarter of 2023.
  • Approved the capital increase in subsidiary Novatek International (BVI) Ltd.
2023.07.28 The 11th meeting of the 9th Board
  • Approved 2023 Q2 consolidated financial statements.
  • Approved the announcement of no lending funds to other parties in the second quarter of 2023.
  • Approved the formulation of the internal control system and implementation rules for internal audit operations of “Risk Management Committee”.
  • Approved the amendment to the remuneration to directors of the 9th“ Director Remuneration Regulations”.
  • Approved the formulation of the Company's “Director Nomination and Selection Policy”.
2023.10.27 The 12th meeting of the 9th Board
  • Approved 2023 Q3 consolidated financial statements.
  • Approved the announcement of no lending funds to other parties in the third quarter of 2023.
  • Approved 2024 “Internal Audit plan”.
  • Approved the capital increase in subsidiary Cheertek International Ltd.
  • Approved the capital increase in subsidiary Novatek International (BVI) Ltd.

  

Board Performance Evaluations

The Company passed the “Measures for Performance Evaluation of the Board of Directors” in the October 2019 board meeting, which stipulates that an internal board meeting and functional committee be held every year, and that individual directors carry out a self-performance evaluation. Every three years, a performance evaluation is carried out by an independent external professional institution. The results are reported to the Board of Directors in the first quarter, to serve as a reference in continuously enhancing the board’s operational effectiveness.

 

Results of the Board Performance Evaluations

The overall Board of Directors, functional committee self-evaluations, and the self-evaluations of directors of the board are carried out by means of internal self-evaluation questionnaires annually. The period evaluated was from January 1 to December 31 of the current year. The questionnaires mainly covered the following facets: degree of participation in Company operations, improvement of decision-making quality, composition and structure of membership, position selection and continuous education, and internal control. After statistical self-evaluation results had been collected in 2022 and 2023, the two-year self-evaluation results of the Board of Directors, the Audit Committee, the Remuneration Committee and individual directors averaged as “Excellent” and results of the Nominating committee were "Good" in 2022 and  "Excellent" in 2023, which were reported to the Board of Directors in the first quarter of 2023 and 2024, respectively.

  

Evaluation cycle Evaluation period Scope of evaluation Evaluation approach Content of evaluation Evaluation results

Annually

January 1st, 2023 to December 31th, 2023 Board of directors
Internal self-assessment Participation in company operation, enhancement of decision-making quality of board of directors, composition and structure of board of directors, selection and constant advanced training of directors, and internal control. Excellent
Audit Committee Internal self-assessment Participation in company operation, awareness of audit committee’s responsibilities, enhancement of decision-making quality of audit committee, composition and member selection of audit committee, and internal control. Excellent
Remuneration Committee Internal self-assessment Participation in company operation, awareness of remuneration committee ‘s responsibilities, enhancement of decision-making quality of remuneration committee, and composition and member selection of remuneration committee. Excellent
Nominating Committee Internal self-assessment Participation in company operation, awareness of nominating committee ‘s responsibilities, enhancement of decision-making quality of nominating committee, and composition and member selection of nominating committee. Excellent

Individual directors

Self-assessment for directors

Understanding of company objectives and tasks, awareness of directors’ responsibilities, participation in company operation, management and communication of internal relationship, professionalism and constant advanced training of directors, and internal control. Excellent
 

In addition, in accordance with the Company’s board performance evaluation measures, an independent external professional institution is commissioned to carry out evaluation work every three years. An evaluation report was issued on January 13, 2021, and the Board of Directors reported the results in the first quarter of 2022.

 

  • The Independence of External institutions: The Taiwan Corporate Governance Association is an independent professional corporate governance counseling and evaluation institution which has already provided services to more than 300 companies. Its scope spans various industries and it also covers public enterprises with different shareholding structures and board membership compositions, listed OTC companies and general companies with public offerings and non-public offerings of shares.
  • Evaluation Methods: Online self-assessments and on-site assessments carried out by interviewers.
  • Evaluation Period: December 1st, 2020 to November 30th, 2021.
  • Evaluation Criteria:
  1. Composition of the Board of Directors
  2. Guidance of the Board of Directors
  3. Authorization of the Board of Directors
  4. Supervision of the Board of Directors
  5. Communication of the Board of Directors
  6. Internal control and risk management
  7. Self-discipline of the Board of Directors
  8. Others such as Board meetings, support systems, etc.
  • Summary of Evaluations:
  1. The Company’s Board of Directors has proactively investigated and planned the establishment of a functional committee to assist in the operations of the board.
  2. External directors have been appointed since 2006. Through their wealth of experience and industry connections, external directors have added value to the Company’s operations.
  3. ESG-related measures are being vigorously promoted. Outsourced manufacturing supply chain partners are required to produce environmentally friendly products, and this issue has been incorporated into discussions between the Board of Directors and the management team. ESG concepts are being realized in daily operations throughout the Company’s hierarchy, from the top down.
  4. The Audit Committee has taken the initiative to guide internal auditing operations. In addition to routine audits, ad hoc audits have also been enhanced. At the same time, aspects of auditing work such as information security architecture have been integrated to improve the Company’s operational efficiency.
  • Evaluation Recommendations:
  1. It was recommended that a nomination committee be set up, and that simultaneously specific goals and schedules should be formulated, a written system established, relevant mechanisms improved, and that the Board of Directors be invited to participate together in this, so as to facilitate the Company’s sustainable operation and implement the inheritance of talented personnel.
  2. It was recommended that to coordinate the promotion of future ESG concepts in work, key performance indicators, remuneration, and the succession planning of senior managers gradually be linked, as this would facilitate the Company’s future operation and development.
  3. It was recommended that the current whistleblower mailbox be capable of simultaneously allowing independent directors to directly receive the content of unscreened or forwarded reports, to facilitate independent directors gaining a direct understanding of important information.

 

Succession Planning for Board Members

The Company has established the Nominating Committee in July 2022, which be responsible to nominate candidates for directors and independent directors and strengthen the competency of the Board of Directors. The Company’s selection of directors is based on the overall configuration of the Board of Directors and the realization of the goal of diversifying the professionalism and background of directors, then be voted by the shareholders' meeting.

 

The Company's ongoing director succession plan is based on the Company's amended "Director's Nomination and Selection Policy" approved in 2023, and a director candidate database is established according to the following standards:

 

  • Board members need to have professional backgrounds (such as in law, accounting, industry, finance, marketing or technology) and professional skills (such as operational judgment, accounting and financial analysis, business management, crisis management, industry knowledge, international market outlook, leadership and decision-making) and attach great importance to enterprise sustainability and social participation: corporate governance, environmental sustainability, social responsibility, legal compliance and human rights protection, etc. Apart from requiring that board members have professional backgrounds and specialized skills, in order to prepare them for succession, the Company arranges for each director to take at least six to 18 hours of refresher courses every year. These courses cover corporate governance topics related to finance, risk management, sales, business, legal affairs, accounting, and fields such as corporate social responsibility, or those related to internal control systems and financial reporting responsibilities. Directors are thereby helped to fully familiarize themselves with the Company’s operational activities and acquire new knowledge of the industry’s underlying structure, so as to continuously hone their professional capabilities.
  • Diversification of the Board:
  1. At least one female director
  2. At least one seat with accounting or financial expertise
  3. At least one seat with academic background
  4. Diverse industrial experience: Experience of directors covers at least 3 different industries
  5. All directors are not a spouse or relative within the second degree of kinship to any of other directors
  6. Limit the number of directors who also serve as managers of the Company to less than one-third of the total directors
  • The Company carries out performance evaluations on its board members every year, and this is used as a reference for selecting or nominating directors, and for reviewing the remuneration of individual directors.
  • The Company currently has a number of senior management talents, being familiar with the business of each unit within the Company through job rotation, also reporting to the directors from time to time the business which they are responsible for and future development of the company to familiarize themselves with the operations of the Board of Directors and reserves a talent pool.
  • The Company delegated Taiwan Corporate Governance Association to arrange two“home tutoring” advanced studies,“Sustainability KPI and Executive's Remuneration” and “Enterprise Risk Management Structure and Sharing of Practical Experience”, totaling 6 hours for the board members in July, which is helpful for directors to exert their supervisory functions and enhance the professionalism of directors.  All of the directors completed at least 6 hours of advanced studies in 2023.

Download

  • 2022 Board Diversity Policy and Implementation
    PDF
  • Procedures and Rules of Board of Directors Meeting
    PDF
  • Regulations Governing the Board Performance Evaluation
    PDF