Corporate Governance

Corporate Governance

Governance Organization

  • SOLAR shall emphasize on corporate governance so as to implement the responsibilities of business operators and protect the legitimate rights and interests of shareholders and other stakeholders.
  • In order to implement good corporate governance, SOLAR has established relevant governance organizations in accordance with the laws and regulations to assist in corporate management operations as well as to provide an effective monitoring mechanism.
 


Operation and Implementation of Governance Organization
Board of Directors

The Board of Directors, in accordance with the principles of corporate governance, reviews the performance of corporate operations and discusses key strategic issues, including opportunities and risks related to the aspects of environmental protection, social responsibility and corporate governance. Material resolutions of the Board of Directors are immediately announced on the Market Observation Post System (MOPS) website of the Taiwan Stock Exchange for the benefit of stakeholders.
 

Tenth Board of Directors (Term: 2023/05/30 - 2026/05/29)


Implementation of Diversity for the Board of Directors

 

  • An election was held for the members of the Board of Directors of SOLAR in 2023. There are nine directors in the Board, including 4 independent directors, and 44% of all directors are independent, with the goal set for having at least one female director in the future.
  • The tenth Board of Directors is composed of members with rich management experience within the industry and academic experience, including business management, electrical engineering, finance and accounting.
 
The implementation status of diversity is as follows:

diversity
 

Implementation Status of the Board of Directors

 

  • The Board of Directors of SOLAR oversees SOLAR’s legal compliance, financial transparency, immediate disclosure of material information, and prevention of internal corruption. The company holds at least one board meeting per quarter, aiming for a minimum average board attendance of 75%. In 2023, we conducted a total of eleven board meetings, with an average attendance rate of 95.6%.
  • In order to strengthen the function and authority of the Board of Directors, SOLAR's directors have an average of more than 6 hours of continuing education every year in accordance with the laws and regulations, and continue to refine their knowledge and abilities related to environmental, social and corporate governance, and provide guidelines for decision-making.

Continuing Education Sessions Attended by the Members of the Board of Directors in 2023

 

  • Please refer to M.O.P.S. for actual information of the Company.

Performance Evaluation of the Board of Directors
 
  • Starting from 2020, SOLAR has been conducting annual performance evaluation of the Board of Directors and functional committees. The goals are to implement corporate governance and enhance the effectiveness of the Company's Board of Directors, to strengthen the Board of Directors' performance of its supervisory duties, and to protect shareholders' rights and interests.
     
  • Board of Directors' Performance Evaluation Results for the Past Years
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Succession Planning for Board Members and Key Management Personnel

  • Implementation Status of the Members of Board of Directors and Key Management Personnel

Members of the Functional Committees


Implementation Status of the Audit Committee
  • The goal is to facilitate the Board of Directors to fulfill its supervision over the Company in regards to quality and ethics over accounting, financial reporting processes and audit in order to strengthen SOLAR’s internal control mechanism.
  • At least one regular meeting every quarter.
  1. Aight Audit Committee meetings were held in 2023
  2. Attendance rate of the Committee members was 100%
 
  • Implementation Results of the Audit Committee
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Implementation Status of the Compensation Committee
  • The goal is to formulate and regularly review the policies, systems, standards and structures for performance evaluation and compensation of directors and managerial officers.
  • The Compensation Committee shall meet at least twice a year.
  1. Five Compensation Committee meetings were held in 2023
  2. Attendance rate of the Committee members was 100%
 
  • Implementation Results of the Compensation Committee
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Corporate Governance Officer

SOLAR's Finance Center is a dedicated corporate governance unit. Shen-Lung Wang, SOLAR's General counsel ,was appointed to concurrently serve as SOLAR's Corporate Governance Officer upon resolution from the Board of Directors On November 6, 2023. He has obtained the lawyer's qualification and will complete the continuing education required by the laws and regulations.
Corporate governance office
 

Internal Audit

  • Establish and integrate an efficient management system and internal control system pursuant to Regulations Governing Establishment of Internal Control Systems by Public Companies governed by the Financial Supervisory Commission, and set up an auditing unit under the Board of Directors.
  • Implementation status of execution items:
  1. Establish an annual audit plan in accordance with the directions of the competent authorities, risks and the self-evaluation results of internal control.
  2. Perform auditing operations and issue reports to continuously track improvements.
  3. Regularly report to the Board of Directors and the Audit Committee on the performance of the auditing operations.

Ethical Corporate Management
 
  • The Department of Human Resources is responsible for the promotion and implementation of the SOLAR’s ethical corporate management. The amended "Procedures for Ethical Management and Guidelines for Conduct" was approved by the Board of Directors on May 8, 2020, and the results of implementation and operation are reported to the Board of Directors at least once a year.
  • The members of the Board of Directors, senior executives and all employees of SOLAR are committed to the implementation of the policy of ethical corporate management. All employees and new recruits are required to attend training courses related to ethical corporate management. The contents of the courses include internal material information, confidential operations, public operations and handling of violations. Meanwhile, SOLAR begins to require suppliers to comply with relevant regulations concerning ethical and honest operations in their business activities.

The following courses were held in 2023 to promote ethical corporate management:

ethical
 

Tax Governance

In 2022, SOLAR achieved an effective tax rate of 14.43% and a cash tax rate of 13.47%, both of which were below the industry average defined by S&P CSA at 24.5% and 20.82%, respectively. This tax outcome can be primarily attributed to the tax incentives provided under the R&D Expense Super Deduction Policy and the Statue for Industrial Innovation, which reduced income tax payments.
 
2022 Income Tax Expense


Risk management

Risk Management Structure
  1. Board of Directors: The company's Board of Directors serves as the highest supervisory body for risk management, with the objective of ensuring compliance with laws, promoting and implementing comprehensive corporate risk management, gaining a clear understanding of operational risks, ensuring the effectiveness of risk management, and bearing ultimate responsibility for risk management.
  2. Risk Management Team: The company has established a Sustainable Development Committee under the Board of Directors and has further established a Risk Management Team to execute risk management responsibilities. The Risk Management Team holds meetings at least twice a year and regularly reports the results of risk management to the Corporate Sustainability Committee.
  3. Business Units: Heads of business units bear the responsibility for risk management within their respective areas. They are tasked with analyzing and monitoring relevant risks within their units to ensure that risk control mechanisms and procedures are effectively implemented.
  4. Risk management processes and internal control systems undergo regular audits conducted by internal audit department. The frequency of these audits is determined based on the level of risk associated with each area.
Risk Management Strategy

Affected by market, environment, climate change, information security, and financial market upheaval, the volatility of various operational factors that affect the business has increased, leading to higher operational risks. It is crucial for the company to acknowledge the necessity and urgency of risk management. As a result, SOLAR has formulated risk management procedures, identified and defined the scope of risk management, assigned organizational responsibilities, strengthened corporate governance, and established an effective risk management mechanism.

The risk management scope of SOLAR covers various types of risks faced in daily operations, including market risk, operational risk, investment risk, environmental risk and so on. We regularly conduct operational impact analysis and risk identification, adopt corresponding risk management strategies, and thereby promote our sound operation and sustainable development.
 
Risk Management Process

Our risk management is authorized by the President, who delegates the daily implementation of risk management measures to the respective functional unit managers based on the types of risks. Moreover, we emphasize the importance of comprehensive risk control by all employees and the proper execution of internal control system regulations to ensure the risk management can be executed effectively.


 
Emerging Risks


Risk Culture
 
In order to foster a corporate culture that prioritizes risk management, SOLAR has integrated a range of risk management indicators into its daily management routines and performance evaluations. Additionally, the company conducts targeted in-house training sessions centered on risk management. Beyond offering online courses to bolster risk awareness among its workforce, SOLAR actively encourages individual employees to proactively identify and report potential risks within the organization. This proactive approach serves to enhance employee engagement in risk management practices.

SOLAR has ingrained risk awareness within its management structure. Routine meetings, including weekly, monthly, annual planning, and five-year strategy evaluations, regularly incorporate discussions on risk management. These discussions dynamically address emerging and potential risks. By incorporating risk management into the objectives of senior executives, the company comprehensively reinforces awareness of its risk culture.

The company provides a wide array of incentives to motivate employees to propose ideas, fostering innovative thinking and the identification and mitigation of potential risks. A review and bonus incentive mechanism is in place for this purpose. Furthermore, SOLAR employs various communication methods, including television screens, posters, and corporate panels, to ensure that the risk management culture is deeply ingrained in the mindset of every employee.

Intellectual Property Management System and Implementation Status

SOLAR has formulated four intellectual property (IP) policies: “Keep improving intellectual property management systems and implement compliance with Corporate Governance Regulations “, “Strengthen employee knowledge about intellectual property”, “Respect others' intellectual property rights to reduce operational risks”, and “Protect and accumulate intellectual property”, to protect relevant IP rights.

SOLAR establishes a department specifically for intellectual property affairs, formulates intellectual property management systems, and raises awareness on intellectual property rights, so as to avoid the loss of intellectual assets, and reduce the risks of operation. Additionally, SOLAR values innovation in research and development, and establishes the systems to reward innovation and protect intellectual property.
 

SOLAR's Intellectual Property Policy and Goal

智財政策


SOLAR holds the intellectual property committee at least once a year to review intellectual property policies, intellectual property portfolio and intellectual property quality. Additionally, an annual report on the execution status of the Intellectual Property Management Plan for the current year is presented to the Board of Directors in the fourth quarter, ensuring the effectiveness of intellectual property management. As of the end of 2023, SOLAR has more than one hundred granted and valid patents, spanning industries such as hard drives, semiconductors, panels, solar energy, and optical discs. In the future, the company will focus on innovation in industries such as storage media, electronic semiconductors, displays, and continue to strategically apply for patents.

Since 2021, SOLAR has actively promoted a confidential and trade secret management system. Each department follows the " Management Regulations for Confidential Information " to classify information and implement appropriate confidentiality measures to reduce the risk of information leakage by managing access control to specific locations, documents, and personnel, etc.. Additionally, SOLAR formulates the "Regulations for the Registration and Management of Trade Secrets" to standardize the process of generating and protecting trade secrets. By the end of 2023, the number of registered trade secrets has exceeded 3000. Through the Research and Development Innovation Incentive System, SOLAR encourages the employees to actively innovate and preserves their results of innovation, and accumulates them to become SOLAR's competitiveness, and enhance the protection of intellectual property. SOLAR has implemented and passed the Taiwan Intellectual Property Management Specification (TIPS A-level) certification in 2023. The certification is valid until December 31, 2024.


Information Security Management Measure and System

Information security and protection of confidential information is the commitment of SOLAR to our clients, shareholders and colleagues. SOLAR actively promotes the information security management system, formulates relevant policies, management procedures and regulations, and further publishes the "Information Security Policy" to declare the determination to defend information security and aim to achieve the goal of information security. This is done in order to safeguard SOLAR's competitiveness and protect the interests of the clients and partners.

Information Security Management Strategy and Framework

Public Advocacy


 

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