Fubon Financial-CSR-Corporate Governance

Sustainable Governance

Fubon Financial Holdings was included as a constituent in the Dow Jones Sustainability World Index for the first time in 2017, ranking fourth out of a total of 15 financial institutions in the world in the "FBN Diversified Financial Services and Capital Markets" category, making it the only Taiwanese financial holding company to be included.
Fubon Financial Holdings ranked in the top 5% of the Taiwan Stock Exchange’s “Corporate Governance Evaluation” of listed companies for the third year in a row.

Action Plans	2017 Results	Progress
Create a Strong CSR Oversight Mechanism	Had ESG (environmental, social and governance) issues supervised by the Corporate Governance and Sustainability Committee under the board of directors.	Two members of the Corporate Governance and Sustainability Committee (independent directors) oversee the operations of the ESG Task Force.
Create a Strong CSR Oversight Mechanism	Reports on the task force’s ESG initiatives and results were submitted to the board of directors.	Completed A report on initiatives carried out in 2016 and plans for 2017 was presented to the board at the beginning of the year. Another report was submitted in mid-2017 summarizing progress in 2017 H1 and plans for 2017 H2.
Optimize the Functions of Each of the Board’s Functional Committees	Helped the board select a nominee for the independent director by-election.	Completed The Corporate Governance and Sustainability Committee nominated 15 board member candidates (including 6 candidates for independent director), and re-election was completed during the 2017 shareholders' meeting. Independent directors account for 40% of all directors, which is the highest proportion of any financial holding company.
Mid-term Goals
Continue to strengthen ESG practices and earn an even higher DJSI grade. Create a fair and reasonable compensation system. See that at least 1/3 of the board of directors’ members are independent directors.
Long-term Goals
Help the board of directors establish a policy on board director diversity. Keep up with the times and solidify and maintain ESG performance.

Fubon Financial Holdings Corporate Governance Structure

Fubon Financial Holdings has established three functional committees under the board of directors — the “Corporate Governance and Sustainability Committee,” the “Audit Committee,” and the “Remuneration Committee” — to strengthen the board’s management functions.

Committee	Composition Rules	Members	Main Responsibilities	2017 Operations
Corporate Governance and Sustainability Committee	Members appointed by the board and must be board directors; must have no fewer than 3 members, and at least half of the members must be independent directors	Convener: Ind. director Chi-Yan Louis Cheung Members: Ind. director Ming-Je Tang; Ind. Director Chan-Jane Lin; Ind. Director Shin-Min Chen; Ind. Director Fan-Chih Wu ; Ind. Director Rong-Feng Chang; Director Chih-Ming Chen; Director Richard M. Tsai	Helps the board nominate board of director candidates and recommends potential independent directors for Fubon subsidiaries Develops initiatives and advises the board on its internal operations and management and issues Oversees implementation of CSR and sustainable operations initiatives and evaluates their effectiveness	Met 6 times; Average attendance was 92.38%.
Audit Committee	Made up of all of the Company’s independent directors; must have no fewer than 3 members	Convener: Ind. Director Chan-Jane Lin Members: Ind. Director Chi-Yan Louis Cheung; Ind. Director Ming-Je Tang; Ind. Director Shin-Min Chen; Ind. Director Fan-Chih Wu; Ind. Director Rong-Feng Chang	Oversees the fair presentation of the Company’s financial statements Hires (dismisses) the accounting firm used by the Company and certifies its independence and performance Monitors effectiveness of Company’s internal controls Supervises appropriateness of internal compliance procedures Oversees the management of existing or potential risks	Met 9 times; Average attendance was 90.55%.
Remuneration Committee	Members appointed by the board of directors; must have no fewer than 3 members, and at least half of the members must be independent directors	Convener: Ind. director Ming-Je Tang Members: Ind. Director Chi-Yan Louis Cheung; Ind. Director Chan-Jane Lin; Ind. Director Shin-Min Chen; Ind. Director Fan-Chih Wu; Ind. Director Rong-Feng Chang	Establishes and reviews the Company’s policies, systems and structures related to the performance evaluations and remuneration of board members and managerial officers Regularly assesses the actual remuneration paid to board members and managerial officers	Met 4 times; Average attendance was 88.88%.

Date: Dec. 31, 2017

Fubon Financial Holdings’ determination to meet its responsibilities as a corporate citizen and embrace sustainability was made clear when it set up an “ESG Task Force” under the Corporate Governance and Sustainability Committee. The Task Force, led by Fubon Financial Holdings’ president, is responsible for managing and implementing corporate sustainability initiatives and consists of six working teams focused on corporate governance, employee care, responsible finance, customer engagement, social commitment and environmental sustainability. The committee appointed independent directors Ming-Je Tang and Jason Wang to supervise the ESG Task Force. According to the Corporate Governance and Sustainability Committee Charter, the ESG Task Force is required to submit a report at the beginning of each year on its plans for that year and a progress report every half year. The reports are then submitted to the board of directors after review by the committee.

Working Team	2017 Results	2018 Implementation Plans
Corporate Governance Team	With respect to corporate governance, a performance evaluation of the functional committees and an external evaluation system of the Board of Directors were introduced to improve the efficacy of the Board of Directors. One result of this is Fubon ranking in the top 30 of TWSE-listed companies in the corporate governance evaluation system of the Taiwan Stock Exchange. Integrating identification and management mechanisms for emerging risks. Continual communication with legal persons on the Company's financial and ESG performance.	Fubon will continue implementing the external evaluation system of the Board of Directors to improve its efficacy. The intention of which is to rank within the top 5% of TWSE-listed companies in the corporate governance evaluation system of the Taiwan Stock Exchange. Establishing an environmental, social and governance (ESG) efficiency management mechanism, such as: establishing a supplier management policy and a sustainability evaluation system, etc. Initiate identification and management mechanisms for emerging risks. Continual communication with legal persons on the Company's financial and ESG performance.
Employee Care Team	Continual implementation of the Golden Practices of the five main strategies of the Fubon ESG Visioning Project. Continual promotion of unions and the signing of collective bargaining agreements in order to promote harmony and communications with Labor-Management Relations. An evaluation of risks to human rights has been conducted on the entire body of personnel; the Maternal Health Plan for Female Employees and the Ergonomic Hazards Prevention Program were fully implemented. Planned development of the employees' professional abilities and the establishment of a diverse and autonomous learning environment as a continual response to external trends and internal management strategies. Continual promotion of projects such as health care for the married and child-rearing employees, promotion of health, and environmental safety. Encouraging employees and their family members to participate in charity and environmental protection activities with the aim of promoting work-life balance.	Continual implementation of the Golden Practices of the five main strategies of the Fubon ESG Visioning Project. Continual evaluation of risks to human rights and full implementation of the Plan to Prevent Unlawful Harassment in the Workplace and the Plan to Prevent Unlawful Harassment in the workplace. Conducting employee engagement surveys. Continual promotion of health and safety-related projects in the aspects of systems, environment/facilities, and activities.
Responsible Finance Team	Continual realization of "leading investment" and "honest lending" among the five main strategies of the Fubon ESG Visioning Project. Taipei Fubon Bank continued promoting loans to integrated energy service companies (ESCOs), green buildings, and solar power system loans in support of government policy and continued providing the Taipei Young Entrepreneur Loan. Joined the Equator Principles Association in response to international trends; introduced the Principles in the credit risk management mechanism of significant financing projects. The Head Office of the Investment Management Division formulated responsible investment policies which apply to every level of the Group's subsidiaries; incorporated the human rights regulations and investment guidelines for high risk investment industries/targets in the policies. And all subsidiaries established responsible investment strategies for front office investment procedures based on each individual type of investment product. In addition, sector-based investments such as the following were added in response to the Sustainable Development Goals (SDGs): new drug development, alternative energies, infrastructure, and green construction. Furthermore, the Fubon TWSE Corporate Governance 100 ETF was issued, which is the first domestic stock ETF with an investment theme of corporate governance.	Continual realization of "leading investment" and "honest lending" among the five main strategies of the Fubon ESG Visioning Project. Establishment of regulations related to the Equator Principles for further management of the ESG-related risks of high-risk lending/investment targets. Issuance of green bonds and continual promotion of the green energy/energy conservation loans. The subsidiaries will establish and strengthen responsible investment strategies and action plans based on the Principles for Responsible Investment. The concept and decision-making process of ESG risk evaluation will be strengthened to establish control procedures for high-risk countries, industries or companies to be used in pre-investment evaluation. Detailed inventories of our existing investment portfolios will be taken in order to gradually increase the proportion of our responsible investments.
Customer Engagement Team	Continual realization of "innovative finance" among the five main strategies of the Fubon ESG Visioning Project. In order to achieve service excellence, the subsidiaries continued implementing digitization and innovative services in business and service. Continued conducting real-time satisfaction surveys and regularly reviewed the evaluation to raise the bar and improve efficiency. Improvement plans have been provided for cases in which the results were lower than the standard to effectively monitor service quality. Customer service and customer complaint processing training was strengthened and reinforced to maintain good customer relations. Digital financial services were optimized and improved to provide more convenient operation methods to employees and more convenient interfaces for customers. In addition, innovative technology was utilized to develop robo advisor services and wearable devices that provide customers with smart wealth management.	Continual realization of "innovative finance" among the five main strategies of the Fubon ESG Visioning Project. The subsidiaries will continue to dedicate themselves to customer-oriented fintech services. The focus will be placed on the two main concepts of digitization and mobilization in the continual establishment and optimization of the digital trading platform and the business system app. New functions and services will be developed for digital customer services, robo advisors, and big data marketing.
Social Commitment Team	Continual realization of "innovative finance" and "tender care" among the five main strategies of the Fubon ESG Visioning Project. Continual utilization of our core competencies to develop projects that benefit the society which will promote health management and improve the resilience of social assets. Continual sponsorship in sports tournaments and athletes to generate more societal interest in athletics and fitness and to support of the brand spirit of positive energy. Continual integration of the resources of Fubon Financial Holdings and subsidiaries to reinforce the support of charity activities in various fields through the four main foundations, which will develop holistic social welfare services.	Continual realization of "innovative finance" and "tender care" among the five main strategies of the Fubon ESG Visioning Project. Continual utilization of our core competencies to develop projects that benefit the society which will promote health management and improve the resilience of social assets. Continual sponsorship in sports tournaments and athletes to generate more societal interest in athletics and fitness and to support of the brand spirit of positive energy. Continual integration of the resources of Fubon Financial Holdings and subsidiaries to reinforce the support of charity activities in various fields through the four main foundations, which will develop holistic social welfare services.
Environmental Sustainability Team	Continual implementation of the Golden Practices of the five main strategies of the Fubon ESG Visioning Project. Incorporated ISO50001 Energy Management System; Continued to implement ISO14001 Environmental Management System and ISO14064-1 GHG Inventory Certificate. Continued to implement the energy conservation and carbon reduction practices internally and supported green energy and green procurement.	Continual implementation of the Golden Practices of the five main strategies of the Fubon ESG Visioning Project. In 2018, the ISO50001 Energy Management System will be introduced in Taipei Fubon Bank, Fubon Securities, and Fubon Life to fully realize and evaluate energy management and utilization efficiency. LED lighting and replacement of elevators and air conditioning systems in the Zhongshan Branch Building will fulfill energy conservation practices. Continual support of green energy, various energy conservation and carbon reduction plans, and environmental protection training and promotion.

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