Director Election Mechanism
Fubon Financial Holdings’ Board of Directors is the Company’s highest corporate governance body. Board members are elected once every three years (their current terms run from June 16, 2017 to June 15, 2020), and a system requiring all director candidates to be nominated has been in place since 2014. The Corporate Governance and Sustainability Committee recommends director (and independent director) candidates based on independence standards set by regulatory agencies and the Company’s "Procedures for the Election of Directors".
The Corporate Governance and Sustainability Committee is also responsible for nominating candidates to serve on Fubon Financial Holdings' Board of Directors. Since 2017 was a board election year for Fubon Financial Holdings, a comprehensive re-election was conducted, and six nominees for independent director were recommended to the board. With independent directors accounting for 40% of all directors, Fubon has the highest proportion of independent directors of any financial holding company.
|Age Distribution of Fubon Financial Holdings Board Directors|
|Age||30 and Below||31~49||50 and Above|
“Directors and Officers Liability Insurance” has been purchased on an annual basis since 2002 to mitigate the legal and financial risks of Fubon Financial Holdings and its subsidiaries and their board directors, board supervisors, and key personnel. The step was taken in consideration of the importance of board members and key personnel being able to exercise their rights and fulfill their duties and has reinforced the Company’s corporate governance mechanism.
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Board of Directors’ Independence and Diversity
Fubon Financial Holdings and its subsidiaries do everything they can to strengthen the independence and diversity of their boards of directors. Independent director candidates are required to personally fill out "nominee qualification checklists" before they are nominated to confirm their professional qualifications and independence. To maintain the board’s independence, external directors (including independent directors) continue to account for more than half of the seats on the board. Also, no independent directors have effective terms of longer than nine years, ensuring that their independence will not be compromised by serving in the same role for too long and that they will fulfill their duties objectively.
In order to increase the independence of the boards of directors of subsidiaries, the Company has gone to great lengths to implement a diversity policy for the composition of the Board of Directors which ensures that professional ability and gender are given balanced consideration. It is hoped that this will facilitate the inclusion of different backgrounds and pool together different views for more optimized decision-making. In 2015, the Company amended the "Procedures for the Election of Directors" to clearly stipulate that the composition of the board members shall take into consideration certain basic criteria including gender, age, nationality, and culture in addition to professional background, industry experience, and other professional knowledge and skills. At present, the Board of Directors of Fubon Financial Holdings includes one independent director who is a foreign national along with four directors who are women. (2019/2/28)
Seats on the Boards of Fubon Financial Holdings and its Subsidiaries
|Internal Directors||External Directors (including independent directors)||Total|
|Fubon Financial Holdings||6||9(6)||15|
|Taipei Fubon Bank||9||6(5)||15|
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Board of Directors’ Operations
Fubon Financial Holdings’ Board of Directors meets at least once per quarter. The Company has set a goal of 80% attendance for each Board member in the self-assessed evaluation of board performance. In 2018, it held six regular meetings and the actual attendance rate was 91% (100% if attendance by proxy is included).
1. In order to establish a good corporate governance environment, the Company has established important corporate governance systems such as the "Human Rights Policy", "Code of Ethical Conduct", "Ethical Corporate Management Best Practice Principles", "Corporate Social Responsibility Best Practice Principles", and “Performance Evaluation Policy for the Board of Directors and Its Functional Committees". The Company also continues to revise internal regulations in order to keep up with domestic and foreign corporate governance systems as well as legal and practical operations (see "Important Company Regulations" on the Company official website).
2. An overview of important company rules and guidelines formulated and passed or amended by the Board of Directors in 2018 is as follows:
|Board Rules and Regulations||Rules Governing Procedures for Meeting of Board of Directors, Candidate of Directors Nomination and Shareholder’s Proposals Guideline|
|Corporate Governance||Corporate Governance Best Practice Principles, Institutional Investor Relationship Maintenance Policy|
|Internal Control||Internal Control System, Accounting Policy, Accounting System|
|Investment Management||Governing the Reporting of Major Asset Transactions by Subsidiaries to the Board of Directors Policy, Regulations on Short-term Fund Transfer Operations|
|Risk Management||Credit Risk Management Policy, Firewall Management Policy, Market Risk Management Policy, Capital Adequacy Risk Management Policy|
|Legal Compliance||Legal Compliance System and Management Policy, Operational Guidelines for Financial examination report of Competent Authority, Whistleblowing Policy|
|Personnel Management System||Working Guidelines, Performance Evaluation Policy, Policy on personal engaging in external part-time work or teaching jobs|
|Anti-Money Laundering||Group Policy for Anti-Money Laundering and Countering the Financing of Terrorism|
For details concerning important resolutions reached by the Board of Directors in 2018, please refer to Section 3.4.13(2) "Major Resolutions of the Annual General Meeting and the Board of Directors" on page 145-147 of the 2018 Annual Report.
3. In order for directors to have immediate knowledge of the Company's operating status, the Company has amended the "Operational Guidelines for Notifying Directors of Major Incidents" to include major violations of the law, downgrading events, major changes in the law, and major financial inspections as major incidents in need of notification, and extended notification to all directors.
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Board of Directors’ Performance Evaluation
In order to establish a director feedback mechanism to improve the effectiveness of the Board of Directors' operation, the Company conducts evaluations based on the "Performance Evaluation Policy for the Board of Directors and Its Functional Committees". The Company's board of directors and functional committees are subjected to internal performance evaluation at the end of each year. At the end of each year, the Company evaluates year's performance using various indicators. Internal and external performance evaluations shall be completed before the Board of Directors' meeting that is to be convened within three months from the beginning of the following year. 2018 performance of the Board of Directors and functional committee was reported and discussed during the Corporate Governance and Sustainability Committee meetings dated March 2019. For information regarding the results of the Board Performance Evaluation, please visit the official website https://www.fubon.com/financialholdings/governance/governanceRegular/Board PerformanceEvaluationResults.pdf or see the 2018 annual report 3.4.1(3)b. page 45-47.
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Directors’ Continuing Education
The company puts a premium on the continuing education of board members and has initiated “Directions for the Implementation of Continuing Education for Directors" to help directors keep up with the latest corporate governance and CSR concepts. The Company invites experts and scholars from relevant fields as lecturers for the "in-home lecture" courses held for the directors and supervisors of Fubon Financial Holdings and subsidiaries each year. From time to time, the Company also provides diversified courses or seminars held by external institutions. For example, in 2018, the Company invited Executive Vice President Wan Yu-Yun and Vice President Liu Hsiao-Hsuan from of Deloitte host a seminar on “AML and CTF by Directors and Senior Managers” on September 11, 2018, and Director/President Niven Huang of KPMG Sustainability Consulting Co., Ltd. to deliver “Responsible Investment Trends of the International Banking Industry - 2018” on November 27, 2018. The board as a whole completed 160 hours of training in total.
For more details concerning the continuing education of Fubon Financial Holdings' directors, please refer to Section 3.4.1 "Functionality of Board of Directors ", "Refinement of directors' professionalism", "Directors' continuing education in 2018", on page 49-53. of the Fubon Financial Holdings Annual Report.
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