Audit Committee is chartered to audit the regulation, adjustment and effectiveness of the company internal control system, and to audit the formulation or amendment of procedures for handling major financial activities. It is also chartered to supervise the transaction of major business assets or derivatives; major financial activities such as loans, endorsements, and guarantees; interests of personal concern to BOD members; the authorization, termination and compensation of certifying accountants; the appointment and termination of financial, accounting, and internal auditing managerial personnel within the company; annual, semi-annual and quarterly financial reports, as well as business operation reports and earnings distribution or deficiency appropriation.
Audit Committee is set up to enhance the supervising function of the board. The purpose of this committee is to supervise the proper presentation of company financial reports; the selection, termination, suitability, independence and performance of certifying accountants; the effectiveness of company internal control processes; company compliance of laws, regulations and legal terms; and the existing or potential risk management of the company
Audit Committee Charter
Communication between independent directors and internal audit managers
Summary of communication between Independent Directors and Internal Audit Managers
The independent directors of the Company convene an audit committee meeting at least once every quarter and meet with internal audit managers behind closed doors. The units shall each perform their assessments of the company's internal audits and environmental health and safety practices before entering into discussion and communication.
Internal audit managers submit audits under the annual audit plan and follow-up reports to the independent directors for review every month. In the event of any serious violation, the management should be updated with written reports and the independent directors be notified, and meetings shall be convened as needed.
Communication between independent directors and accountants
Summary of communication between Independent Directors and External Auditor
The independent directors of the Company meet with the audit committee and accountants behind closed doors every quarter. The accountants will report on the results of audits/reviews of the financial statements of the Company and its subsidiaries, and discuss with the independent directors the methods and scopes of audits/reviews, key accounting estimates, selection or modification of accounting principles, important issues discussed with the supervisory authority, any material adjustment, any difference in opinion with the supervisory authority, any difficulty encountered during audits/reviews, potential impact of material exposures to financial statements, changes in securities and tax laws, and the statement of independence issued by the accountants.
Compensation Committee is to establish a sound corporate governance and assist the board to perform its responsibilities related to corporate compensation and benefit policies, plans and programs to attract and retain talent for the company.
Compensation Committee is chartered to propose the overall company compensation policies and structure, the compensation implementation for BOD and Chairman; the compensation implementation for executives including the President, the bonus and inspiration implementation for executives including the President, the proposal and implementation of performance review for BOD, Chairman, and executives including the President and other issues authorized by the board.
Organizational Regulations of the Compensation Committee
The implementation of performance review for BOD
VIS has established "Board of Directors Performance Assessment Policy" for evaluating the performance of its Board of Directors.
The Company's Board assessment scope may cover the assessment of individual Board members,the Board as a whole, and functional committees.Internal assessment shall be adopted for the assessment of individual Board members and functional committees.Both internal and external assessments shall be adopted for the assessment of the Board as a whole.
The criteria for evaluating the performance of the individual Board members shall cover the following five aspects:
(1) Board meeting attendance and continuing education;
(2) Participation in supporting the company's objectives and strategies;
(3) Instructions to and communication with management executives;
(4) Supervision of the execution of business plans and tracking the progress of such execution;
(5) Internal control and avoidance of conflicts of interest;
The criteria for evaluating the performance of the Board as a whole and each functional committee shall cover the following five aspects:
(1) Participation in the operation of the company;
(2) Improvement of the quality of the Board of Directors' decision making;
(3) Composition and structure of the Board of Directors;
(4) Election and continuing education of the directors; and
(5) Internal control
The indexes for Board Performance Assessment shall be determined based on the operation and needs of the Company and suitable and appropriate for evaluations by the company.
Scoring criteria may be modified and adjusted based on the company's needs. The weighted scoring method may be adopted based on the aspects of evaluation.
The Company appointed the Taiwan Corporate Governance Association (TCGA) to conduct the external assessment based on eight major aspects and 38-question indicators on October 14, 2019, including the composition, guidance, authorization, supervision, communication and self-discipline of the Board of Directors as well as internal control, risk management and others, via questionnaire survey and on-site visit. TCGA has no dealings with the Company, and is independent of the Company.
The external performance assessment result for the Board of Directors will be reported to the Board of Directors' meeting on February 20, 2020.
1. Assessment period: October 1, 2018 to September 30, 2019
2. Overall assessment results and enhancement suggestion:
The report concluded that the Company's Board of Directors has a balanced internal and external director structure and seats, and is in line with the diversity of professional skills and industrial experience. Moreover, the operation and communication of the Board of Directors is smooth. The Company held special discussions and courses irregularly, which helps to improve the efficiency of board operations. The Company has established a sound risk management operating mechanism and internal control system, which helps members of the Board of Directors to grasp the Company's risk management situation and reduce the Company's operating risks. The Company has established "Ethics and Business Conduct ", "Code of Ethics for Directors ", "Ethical Corporate Management Best Practice Principles" and "Guidelines for Reporting and Handling Ethical Conduct Violations", with a view to promoting self-discipline of the Board of Directors and all members of the Company and abiding by business ethics. In addition, the Company's high-performance in corporate governance evaluation represents that the Company has highly implemented corporate governance and that is praiseworthy. And from the planning of various meetings and the provision of information, convenient for directors to grasp important company information in real time, which can prove that the relevant support system of the Board of Directors is quite complete.
The report also provided suggestions on the establishment of an induction course for the newly elected directors, the performance evaluation of the internal audit officer, and the approval level of "Guidelines for Reporting and Handling Ethical Conduct Violations" for the Company to enhance the efficiency of the Board. Based on its suggestions, the Company will plan the induction course for newly-elected directors, the performance of the internal audit officer will be reviewed by the Board of Directors, and the approval level for implementing the "Guidelines for Reporting and Handling Ethical Conduct Violations " will be raised.
Board of Directors Performance Assessment Policy