Composition of the Board of Directors
To strengthen the functions of the Board of Directors, the number of members was increased to nine, including four independent directors. Since the Board meets at least once each quarter, it held four meetings in 2024, with all members attending every meeting.
Formosa Laboratories has established the Corporate Governance Best Practice Principles and the Procedures for Election of Directors, which specify that the Board of Directors should include members with diverse industrial experiences, professional backgrounds, and competencies, as well as the voices of different groups. Of the nine members on the 10th Board of Directors, five (56%) have backgrounds in medicine or chemistry, while four (44%) specialize in finance or business administration. Additionally, female directors occupy two seats on the Board, accounting for 22% of the total, and no more than one- third of the directors also serve as managers at Formosa Laboratories.
Additionally, through regular internal and external performance evaluations, we assess the performance of the Board of Directors and its members. The evaluation results are used as the basis for the election or nomination of directors. Moreover, the results of individual directors' performance evaluations are also used to determine their compensation. The Remuneration Committee reviews relevant indicators and metrics to enhance corporate governance and improve decision-making efficiency.
Please refer to Formosa Laboratories' 2024 Annual Report for more details on the core competency indicators related to the diversity of the Board of Directors and functional committees. You can also find detailed information about Formosa Laboratories' corporate governance on their official website.
▼Composition of the 10th Board of Directors at Formosa Laboratories
Note : The term of office of the 10th Board of Directors started from June 23, 2022,
and will expire on June 22, 2025.
Recusal Due to Conflict of Interest
Formosa Laboratories uses a candidate nomination system for electing directors, where the Chairman also serves as the President of the company. Some directors at Formosa Laboratories also sit on the boards of other companies. The Board of Directors has established the Rules of Procedure for Board Meetings following the Regulations Governing Procedure for Board of Directors Meetings of Public Companies. These rules outline the principles of director recusal in cases of conflict of interest and emphasize that board members must exercise high levels of self-discipline and prudence, acting as good administrators and faithfully fulfilling their duties.
Additionally, the rules specify that directors must not participate in discussions or votes on matters where they have an interest or represent a legal entity that could harm the company's interests. They are also prohibited from exercising voting rights on behalf of other directors and must abstain from discussions and voting on such issues. Please refer to Formosa Laboratories' annual report for more details on the implementation of director recusal from proposals due to conflict of interest.
Continuing Education and Training for the Board of Directors
To stay current with global trends in business management, Formosa Laboratories has established a continuous education and training program for directors. This includes annual training courses to strengthen governance knowledge and skills. Additionally, we regularly send out updates on relevant laws and regulations from authorities so that independent directors can stay informed about matters related to Formosa Laboratories. We also enhance information dissemination and educational programs based on each director's needs and feedback.
In 2024, the Board of Directors completed a total of 56 hours of training, consisting of 35 hours on governance and 21 hours on finance and accounting, averaging 6.2 hours per person. For more details on directors' continuing education and training, please refer to Formosa Laboratories' annual report.
Performance Evaluation for the Board of Directors
To improve the efficiency of board operations, Formosa Laboratories has established the Rules for Performance Evaluation of the Board of Directors, requiring self- assessments of the board, individual members, and functional committees annually. The performance evaluation indicators for the Board cover five areas: "participation in the operation of the company,""improvement of the quality of the Board of Directors' decision-making,""composition and structure of the Board of Directors,""election of directors and continuing education and training for directors,"and"internal control." The Audit Committee and the Remuneration Committee review and recommend on the remuneration standards and the specific amounts of compensation based on the evaluation results.
According to the results of self-assessments of the Board of Directors and functional committees for 2024, The Board of Directors has fulfilled its responsibilities in guiding and supervising the company's operations, and overall, the Board's functioning was sound. Additionally, Formosa Laboratories engages the Taiwan Investor Relations Institute, a professional and independent organization, to conduct an external evaluation of the Board's performance every three years. The most recent evaluation took place in 2023, and the Board of Directors either made improvements based on the recommendations in the report or included those recommendations in its schedule to ensure compliance with governance standards at Formosa Laboratories. The evaluation report is available on Formosa Laboratories' official website.
Remuneration Policy for Directors and Managers
The salary and remuneration policies, systems, standards, and structures for directors and managers at or above the level of associate director at Formosa Laboratories are determined and reviewed by the Remuneration Committee. The committee includes Independent Directors who provide external perspectives and opinions, and at least two meetings are held annually to review and ensure the competitiveness and reasonableness of salary and compensation.
According to the "Remuneration Regulations for Directors, Members of Each Functional Committee, and Managers" established by Formosa Laboratories, the Company provides fixed remuneration to Independent Directors on a monthly basis, regardless of the operating profit or loss. Independent Directors do not participate in the annual profit distribution and are not provided with additional compensation such as duty allowances, severance pay, bonuses, retirement pensions, special fees, etc., in order to maintain their independence. The annual remuneration for non-Independent Directors includes director's remuneration, salary, and bonuses (the latter two only apply to those who also serve as employees). The remuneration for senior managers includes salary, bonuses, and retirement pensions, which are disclosed regularly in the Company's annual report (2022 Annual Report).
Apart from the aforementioned provisions, there are no other significant special benefits for senior executives in the Company. The retirement benefits system is also the same as that of other employees and is implemented in accordance with legal regulations.