The Articles of Incorporation of Mega Holdings specified that the election of directors shall be conducted based on a candidate nomination system starting from 2013. Directors are elected in the shareholders' meeting from a list of candidates and they are eligible for reelections. The number of independent directors shall not be less than three persons and shall not be less than one fifth of the seats of directors.
Mega Holdings holds elections of directors every three years in accordance with the Articles of Incorporation, "Regulations Governing the Election of Directors", and the candidate nomination system. The qualifications of all director and independent director candidates must be reviewed by the Board of Directors in accordance with the Company Act and Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies to ensure the transparency of the procedures for the nomination and election of directors. The Board of Directors shall verify the professional qualifications and independence of the candidates before they may pass the candidates in a resolution before submitting the list of candidates to the shareholders' meeting for election.
The composition of the members of the Board of Directors of Mega Holdings is based on requirements for the Company's operations, business models, and development. Among the 11 directors and 3 independent directors in office as of the end of 2019, only 2 directors are managerial officers of Mega Holdings. The professional background of the directors covers law, accounting, banking, finance, and economics; the professional skills include risk management, compliance, anti-money laundering, finance, economic analysis, business management, internal control, and industry knowledge. Each board member has the necessary knowledge, skill, and experience to perform their duties. In addition, at least one director with professional knowledge of the operations of subsidiaries is appointed. 3 out of the 14 directors specified above are female. The directors' average age is 57.42 years old. The structure and diversity of the directors are provided in the table below.
Mega Holdings values the independence of directors. The Chairman and President are not the same individual or have relations such as spouses or relatives within the first degree of kinship. Directors also do not have relations within the second degree of kinship. Independent directors retain independence qualifications required by the competent authority and they do not serve as directors or independent directors in more than two other companies. In addition, the Company's Corporate Governance Best Practice Principles specify that independent directors may not serve more than three consecutive terms to ensure that independence is not reduced by extended association. The average term of the current independent directors is 2.32 years.
Please refer to the Company's Annual Report for information on the directors.
Online Annual Report: https://www.megaholdings.com.tw/tc/Yearreport.aspx
Major deficiencies identified by regulators at home and abroad and in internal / external audit reports and their corresponding improvements, and major issues concerning operation and business were reported to the Board of Directors for timely responses.
A total of 12 meetings of the Board of Directors was held in 2019 and board members averaged an attendance in person rate of 99.40%. At least one independent director attended in person the Company's board meetings and the attendance of independent directors in board meetings is detailed in the table below.
Mega Holdings has established clear regulations on the avoidance of conflicts of interests for directors who shall uphold a high level of discipline. Directors shall explain and recuse themselves from discussions and votes of the proposals involving the conflict of interests with themselves or their representative corporations in the board meeting, and shall not exercise voting rights on behalf of other directors.
To implement corporate governance and strengthen the functions of the Board of Directors, the Company established the Guidelines on the Performance Evaluation of the Board in 2015 and had the Guidelines published on its website and the Market Observation Post System. Starting from 2015, the Board of Directors, each functional committee, and all directors conducted the self-evaluation every year; the Company also engages an external independent institution or expert team to evaluate the performance of the Board of Directors and each functional committee at least every three years. The results of evaluation and recommendations for improvement for 2019 were reported to the Board of Directors in November 2019. The implementation status and explanation of the evaluation methods were disclosed in the Company's Annual Report. The Company appointed an external evaluation institution to execute the performance evaluation of the Board of Directors in 2018. The Company disclosed the names and professional qualifications of the external evaluation institution, experts, and scholars and explained whether it has business relations with the Company, and its independence status in the Annual Report.
To strengthen the integrity of the performance evaluation and implement related information disclosure requirements for the Corporate Governance Evaluation of the Taiwan Stock Exchange Corporation, Mega Holdings amended the title and certain articles of the Board of Directors Performance Evaluation Guidelines in July 2019 to improve the information transparency of the evaluation guidelines and results.
Please refer to the Company's website for the results of the Company's board performance evaluation in 2019.
https://www.megaholdings.com.tw/tc/boardDirectors.aspx