Professional Qualifications and Independence of the Board
Cathay FHC features a Corporate Governance and Nomination Committee and adopts the candidate nomination system. All director candidates are nominated and their qualifications are reviewed by the Corporate Governance and Nomination Committee. After candidates are approved by the Board of Directors, they are elected and appointed during the shareholders' meeting. According to Paragraph 3, Article 30 of Cathay FHC's Corporate Governance Best Practice Principles, the members of the Board of Directors shall possess the knowledge, skills, and experience necessary for performing their duties. In response to issues concerning corporate governance and corporate sustainability in Taiwan and abroad, the directors of Cathay FHC actively participate in relevant internal and external training, which covers issues including risk management, corporate governance, corporate social responsibility, AML/CFT, and information security. The average training hours for the directors stood at approx. 10 in 2020.
Cathay FHC completed its 7th election of Directors in 2019 and increased from 3 to 4 Independent Directors. Two of the newly elected Independent Directors, Ms. Li-Ling Wang and Mr. Tang-Chieh Wu, have professional experience and expertise in insurance, securities, risk management, finance, and banking, effectively improving the effectiveness of corporate governance of the Company’s Board. To achieve an ideal level of corporate governance, the Board of Directors shall possess the following abilities:
Cathay FHC continues to improve the composition and structure of the Board of Directors in accordance with Paragraph 2, Article 30 of the Corporate Governance Best Practice Principles. The Company elected the 7th-term Board of Directors, added 1 female independent director, and increased Board diversity in 2019.
Board Operations and Performance Evaluation
Operatioms in 2020
- Audit Committee：Committee meetings are convened at least once each quarter. A total of 8 meetings were convened in 2020; attendance rate was 100%.
- Remuneration Committee：Committee meetings are convened at least twice a year. A total of 3 meetings were convened in 2020; attendance rate was 100%.
- Corporate Governance and Nomination Committee：Committee meetings are convened whenever deemed necessary. A total of 3 meetings were convened in 2020; attendance rate was 100%.
To implement corporate governance and improve the Board and Functional Committee’s efficacy, Cathay FHC pays special attention to the overall operations of the Board and Functional Committee and thus set up the Regulations Governing the Evaluation of the Board and Functional Committee’s Performance in addition to the Guidelines for Evaluation of Directors' Performance and the Guidelines for Directors' Remuneration. Performance indicators, such as compliance, corporate governance, risk management, and corporate sustainability and corporate social responsibility, were also incorporated in the Regulations Governing the Evaluation of the Board and Functional Committee’s Performance to ensure the Board and Functional Committee’s fulfillment of corporate governance, operations, and corporate social responsibility. In 2020, the result of Cathay FHC's Board and functional committee performance evaluation was “above standard.”
To strengthen the independence and effectiveness of the Board performance evaluation, Cathay FHC will appoint an external independent institution or an expert to carry out the Board performance evaluation once every three years, starting from 2017. Cathay FHC has commissioned the "Taiwan Institute of Ethical Business and Forensics" to conduct the external performance evaluation of the company's Board of Directors in 2019, and discusses and implements enhancement measures in accordance with the Institute's optimization recommendations. For the results of Cathay FHC's internal and external Board and functional committee performance evaluations in 2019, please see our 2019 Annual Report P.43-49.
In order to lower the risks taken on by directors, supervisors, and the Company in general, Cathay FHC has purchased liability insurance since 2007 for its Directors, supervisors, and key staff members, including those from its subsidiaries. This is in line with the legal requirements during their terms in office. The contents of the insurance policy are reviewed annually and reported to the Board after the policy is renewed each year.
Remuneration of Senior Management
Manager performance evaluations and the remuneration policy, system, standard, and structure are reviewed by the Remuneration Committee of Cathay FHC, and then submitted to the Board of Directors for resolution. Our goal is for managers to fulfill their duties to improve our long-term business performance, and further achieve our business strategies and ensure shareholders equity. Cathay carries out performance management and pays remuneration in accordance with the Manager Performance Development Guidelines and Guidelines for Remuneration of Senior Management. The performance of managers is evaluated based on annual goal attainment, and results serve as the basis for remuneration. For more information on remuneration of Cathay FHC’s CEO, please refer to 2020 Cathay FHC's Report on Remuneration of the President.