Sustainable Governance

Putting Sustainable Governance into Practice

Vision

Fubon Financial Holdings has championed an “ESG Visioning Project” consisting of six strategies. One of them is a sustainable governance strategy that addresses several United Nations sustainable development goals (SDGs). As part of the strategy, several action plans have been established based on the Taiwan Stock Exchange’s 2018-2020 Corporate Governance Roadmap and the Bankers Association’s “Corporate Governance Best Practice Principles for Financial Holding Companies.”

These action plans, which involve 1) deepening the Company’s corporate governance and CSR culture; 2) Enhancing board director functions; 3) fostering shareholder activism; 4) improving the quality of information disclosures; and 5) strengthening compliance with relevant laws and regulations, are aimed at reinforcing the integrity of ESG practices and monitoring their implementation.

Formation of Specialized Teams

In 2015, Fubon Financial Holdings established the Corporate Governance and Sustainability Committee and set up an ESG Task Force under it. Within the ESG Task Force’s Corporate Governance and Ethical Management Team, the Legal & Compliance Division is responsible for legal compliance, ethical management, internal controls, risk management, and information transparency. The team is headed by the Legal & Compliance Division’s top executive and compiles the ESG activities and plans of relevant units in Fubon subsidiaries. It reports its execution situation and plan to the Corporate Governance and Sustainability Committee every six months, and that report is then submitted to the board of directors.

Management Policies

Fubon Financial Holdings has established several rules and guidelines to implement standardized and consistent corporate governance and management practices and promote the spirit of sustainable governance. These rules and guidelines include “Corporate Governance Best Practice Principles,” “Articles of Incorporation,” “Rules Governing the Procedures for Shareholders Meetings,” “Rules Governing Procedures for Meeting of Board of Directors,” and “Ethical Corporate Management Best Practice Principles.”

Corporate Governance and Sustainability Committee

The Company’s determination to meet its responsibilities as a corporate citizen and embrace sustainability was made clear when it set up the 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. In 2020, the six working teams under the Task Force were reorganized and are now focused on corporate governance and ethical management, responsible finance, social commitment, environmental sustainability, employee care and innovative services.

The ESG Task Force is required to submit a report at the beginning of each year on the results of the previous year’s initiatives and its plans for the new year and then produce a report on the implementation of the new plans every six months. The reports are then submitted to the Corporate Governance and Sustainability Committee and the board of directors to deepen the Company’s ESG commitment.


Audit Committee

The Audit Committee under the board of directors, which has been in place for many years, assists the board in overseeing the effectiveness of the Company's internal controls and risk management and the appropriateness of compliance procedures. It also assesses the independence of CPAs hired by the Company and major investment projects under consideration, and makes related recommendations.

All of the Company’s important rules and systems are also submitted to and reviewed by the Audit Committee before being forwarded to the board of directors for discussion. In 2019, the Audit Committee reviewed and approved the Company’s “Personal Information Protection Policy,” “Group Policy for AntiMoney Laundering and Countering the Financing of Terrorism,” and “Policy on Handling an Operational Crisis or Contingency.”


Remuneration and Nomination Committee

At the beginning of 2020, the name of the “Remuneration Committee” was changed to the “Remuneration and Nomination Committee” in recognition of the change in responsibility for the board nominating functions.

  • The major additions and revisions to the committee’s authority are as follows:
    • Given new “nominating” powers
    • Shall set and regularly review the “Performance Evaluation Guidelines for the Board of Directors and Functional Committees” and related performance evaluation indicators
    • Will be briefed on the performance evaluations and development plans for senior managers
    • Newly added a provision that when the committee makes compensation recommendations to the board of directors, it should consider the type of compensation involved, the method of payment and the future risk to the Company.

Beyond following the “Guidelines on Executive Performance Evaluations and Payment of Remuneration,” the committee looks at an executive’s individual performance, the Company’s operating performance, the individual’s contribution to the Company’s overall performance and future risk exposure when considering an executive’s performance and remuneration. It also refers to global compensation surveys and salary information from competitors and consults an international compensation consultant for advice to ensure that the compensation of top executives is competitive in the marketplace.