Chang Hwa Bank|Corporate Social Responsibility-Corporate Governance Framwork & the Board of Directors

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Corporate Governance

The Bank continued to strengthen the Board's diversified professional functions, implement integrity and operational responsibilities, ensure the rights and interests of shareholders and other stakeholders, and pay attention to the sustainability and the resilience of enterprises. Chang Hwa Bank ranked in the top 5% of overall listed companies for 4 consecutive years of Corporate Governance Evaluation of the Taiwan Stock Exchange Co., Ltd., placed among the top 4 in the financial and insurance industry in the most recent year, and has been selected as a constituent stock of the Taiwan Stock Exchange “Corporate Governance 100 Index” for two consecutive years, affirming the Bank's commitment on improving various governance aspects to get positive results.
According to Article 14 of the Bank’s Articles of Incorporation, the formulation and amendment of the Articles must be resolved by the Shareholders' Meeting. The Bank's highest governing body is the Board of Directors, under which there are four functional committees in place, namely the Audit Committee, the Remuneration Committee, the Sustainable Development Committee, and Accountability Committee. Corporate governance framework of the Bank is as below:

Corporate Governance Framework of the Bank

Composition and functioning of the Board

Appointment and Succession

Candidates Nomination System
Since the 25th session of the Board of Directors, the Bank has fully adopted candidates nomination system, and has adopted diversified and real-time information disclosure and voting methods to enable shareholders to fully understand relevant information about candidates, so as to ensure that shareholders can exercise shareholder rights fairly and effectively, promote the sound development of the company, and implement corporate governance.
Board of Directors Succession Plan
The Bank's Board of Directors adopts a candidate nomination system for the election of directors, in which shareholders nominate director candidates. With the Bank's business goals and direction as the benchmark, we measure the independence and diversity of the Board as well as the professional competence that the Board should possess as a whole, and the results of the Board performance evaluation are used as a reference for nominating directors for re-election.

Succession planning for board members

Diversity and Professionalism of the Board Members

Composition of the Board of Directors
The term of the 27th Board of Directors of the Bank is from June 19, 2023 to June 18, 2026. Nine directors (three independent directors and six non-independent directors) were elected by the shareholders' meeting, and three directors were elected from among themselves as managing directors (including one independent director), and then the managing directors elected one person from among themselves as the Chairperson.

All Directors are nationals of the Republic of China, among which are three female directors (33.33%), three independent directors (33.33%), and one natural-person directors (11.11%).
The age distribution of the 27th directors is between 40 and 70 years old.
The average tenure of directors is 3 years, none exceeding 9 years (three independent directors have a tenure of 2 years each).

Professionalism of Directors
The 27th Board of Directors' members of the Bank have industrial experiences and professional competencies including accounting, finance, banking, insurance, law, marketing, technology, securities, venture capital, administration, asset management, economics, business, information management, e-commerce and online marketing, monetary policy, risk management, labor rights and remuneration management, ESG and sustainability, etc. Diverse and different fields of professionalism endow the decision-making of the Board of Directors with objectivity and completeness, and improve the decision-making quality of the Board of Directors.
In order to strengthen the professional functions of directors and assist in decision-making, all directors participate in corporate governance, risk management, information security, business operations, legal affairs, accounting, financial analysis, climate change, consumer rights and sustainable development (ESG) and other refresher courses in accordance with "Directions for the Implementation of Continuing Education for Directors" of the Bank, the total continuing education hours for all directors in 2024 is 128 hours, with an average of 14.2 continuing education hours per director, complying with the hours required by the competent authority. For further information, please refer to the Market Observation Post System.
Information of the 27th Board of Directors and Implementation of the Diversity Policy

Implementation of the Board and Recusal due to Conflicts of Interest

All directors performed their duties in accordance with the Bank's Articles of Incorporation and Rules of Procedures for Board of Directors Meetings. The average attendance rate of all Board members is required to reach at least 85%. In 2024, the Board of Directors convened 14 meetings (including 1 extraordinary meeting), with an average attendance rate of 99.12%.
If there is a proposal, with which a director has a conflict of interest, at a Board meeting, they should recuse themselves from the resolution. For the directors' recusal from the resolution due to conflicts of interest, please refer to the Annual Report, II Corporate Governance Report, D. Implementation Status of Corporate Governance, a. Implementation of Board of Directors, and 2. The implementation of the Directors' recusal to content of motion in conflicts of interest. (The Bank discloses the following information in the annual report, including the positions held by directors concurrently, the institutional shareholders they represent, the major shareholders of the institutional shareholders, and the information on the top ten shareholders who are related parties to each other.)
Communication about Key Material Events
All the Bank's responsible units submit major proposals to the Board of Directors for review or deliberation on a regular or irregular basis due to practical operational needs or regulatory requirements. They can also report to the Board of Directors in real time by means of extraordinary motions, to inform the Board of Directors and communicate with it in a timely manner.
Important Resolution of the Board

Functional Committees of the Board of Directors

The Board of Directors of the Bank has set up 4 functional committees, the Audit Committee, the Remuneration Committee, the Sustainable Development Committee and Accountability Committee.

In 2024, their composition and operating status are as follows:

Committee	Member	Convened times	Attendance rate
Audit Committee	All Independent Directors	13	100%
Remuneration Committee	All Independent Directors	14	100%
Sustainable Development Committee	Chairperson, all Independent Directors, and Managing Director (President)	6	100%
Accountability Committee	All Managing Director (President) and Independent Directors.	Established by the end of 2024