Functional Committee
To effectively implement operational risk impact management and ensure the identification of the Company's impact on the economy, environment, and people, Formosa Laboratories has established an audit committee, a Remuneration Committee,and aSustainable Development Committee under the Board of Directors. Each functional committee conducts due diligence investigations through regular business communication channels, internal meetings, various questionnaires/surveys, document signing, and existing complaint mechanisms to collect significant events or suggestions from stakeholders regarding positive or negative risk impacts arising from operations. After receiving feedback, the committees are responsible for developing, approving, and updating relevant strategies and policies for managing these impacts. The Board of Directors is responsible for overseeing the impact management procedures and their results, and the results are reported to the board on a regular basis.
Audit Committee
Formosa Laboratories established an audit committee after the shareholders' meeting on June 23, 2022. The committee is composed of all Independent Directors. The audit committee assists the Board of Directors in supervising the quality of the Company's accounting, auditing, financial reporting processes, and financial controls. Formosa Laboratories has formulated the "Audit Committee Charter" in accordance with Article 3 of the "Regulations Governing the Exercise of Powers by Audit Committees of Public Companies", which has been approved by the Board of Directors.
The charter specifies the committee's operations, mainly to assist the Board of Directors in fulfilling its responsibilities of overseeing the Company's proper expression of financial statements, the selection (dismissal) and independence and performance of the auditors, effective implementation of internal controls, compliance with relevant laws and regulations, and control of existing or potential risks. The audit committee determines whether to report to the Board of Directors based on the significance of the risk report. The committee is composed of all Independent Directors and is chaired by independent director Chen, Yi-Fen, who has a financial accounting background. The audit committee convened a total of 2 meetings in 2022, with an average attendance rate of 100%.
Audit Committee Members of Formosa Laboratories
| Name | Position | Gender | Term (Years) |
|---|---|---|---|
| Chen, Yi-Fen | Independent director | Female | 2022/6/23~2025/6/22 |
| Lu, Ta-Jung | Independent director | Male | 2022/6/23~2025/6/22 |
| Chang, Ting-Jung | Independent Director Note | Male | 2022/6/23~2022/11/12 |
Remuneration Committee
To strengthen corporate governance and enhance the function of board compensation management, the Remuneration Committee of Formosa Laboratories is established to assist the board in implementing and evaluating the overall remuneration and benefits policies of the Company, as well as the remuneration of directors and executives, ensuring that the Company's compensation arrangements comply with relevant laws and regulations and are sufficient to attract outstanding talents. The organization regulations of the Remuneration Committee are formulated in accordance with Article 14-6 of the "Securities and Exchange Act" and the "Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange" and have been approved by the Board of Directors.
The Remuneration Committee primarily assists the Board of Directors in evaluating and overseeing the Company's overall remuneration policies, evaluating and approving the remuneration levels of directors and executives, performance assessment and remuneration policies, systems, standards, and structures. In addition, the committee assesses and reviews the allocation ratio of remuneration for senior management and employee compensation, and has formulated the "Proportion of Total Compensation of Directors, General Managers, and Deputy General Managers to Individual or Separate Financial Report After-Tax Net Income table"; please refer to the Company's Annual Report for the Year 2022. The committee evaluates and reviews the reasonableness of the salaries and rewards of individual members of the management team based on their abilities, contributions to the Company, and performance, effectively managing the risk of talent loss. Currently, the committee has three members, including two Independent Directors and one external independent expert. The Remuneration Committee held a total of two meetings in 2022, with an average attendance rate of 100% for committee members.
Remuneration committee members of Formosa Laboratories
| Name | Position | Gender | Term (Years) |
|---|---|---|---|
| Chen, Yi-Fen | Independent director | Female | 2022/6/23~2025/6/22 |
| Lu, Ta-Jung | Independent director | Male | 2022/6/23~2025/6/22 |
| Chang, Ting-Jung | Independent Director Note | Male | 2022/6/23~2025/6/22 |
Note: Chang, Ting-Jung resigned as an independent director on November 12, 2022, with his identity as a member of the remuneration committee changed to an independent external expert.
Sustainable Development Committee
Formosa Laboratories belongs to the biotechnology and medical industry. The Company's sustainable development is closely related to the survival, health, and wellbeing of humanity. In order to establish sound management for sustainable development and promote a governance framework for sustainable development, Formosa Laboratories views sustainable development as an integral part of its business decision-making. By using the ESG framework, the Company examines its management practices and develops its own sustainable strategies to achieve sustainable business goals and fulfill corporate social responsibilities. Formosa Laboratories has established its "Practical Guidelines for Sustainable Development" in accordance with the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies", and reported the establishment of the Sustainable Development Committee and its future goals at the board meeting on May 12, 2022.
The Sustainable Development Committee is chaired by Chairman Cheng, Chen-Yu and is responsible for integrating and promoting relevant activities to achieve the Company's annual ESG goals, and regularly reporting to the Board of Directors. The CEO serves as an advisor and approves relevant activity plans and budgets, and may invite department heads to participate when necessary. The Vice President of the Engineering Department serves as the director and coordinates the establishment of committees and execution teams with members from relevant departments, and reports to the advisory committee and promotes annual plans. The committee members are composed of department heads from relevant departments who participate in the committee's operations and implementation of plans. In addition, three execution teams have been separately established in each department, namely the Sustainable Environment Team, the Social Welfare Team, and the Corporate Governance Team, to integrate and plan relevant activities and promote future key projects.
The Sustainable Development Committee is responsible for proposing and implementing sustainable development policies, systems, or related management guidelines and specific implementation plans to assist the Board of Directors in promoting sustainable development and corporate governance. It regularly reports on the implementation to the Board of Directors to enhance the practice of the Company's overall sustainable business strategy. In 2022, the Sustainable Development Committee held two strategic promotion discussions on May 3 and August 4, and reported on ESG goal planning and work progress to the Board of Directors on May 12, August 11, and November 11. The average attendance rate of the committee members was 94.4%.
Climate Change Response Act
Global climate change and the promotion of the "Climate Change Response Act" have made industries begin to pay attention to sustainable development plans such as environmental protection, energy conservation, and carbon reduction. The biopharmaceutical industry cannot remain indifferent to this trend. In order to strengthen environmental protection and carbon reduction policies, enhance its relationships with employees, customers, and communities, and strengthen corporate governance, Formosa Laboratories not only complies with regulatory requirements but also aligns with international standards. Therefore, a Sustainable Development Committee has been established, and relevant information has been initiated by various executive teams and departments to integrate and evaluate operations, and propose future goals and response strategies.
The departments and functional groups of the Sustainable Development Committee and their main objectives in the future:
