UMC Corporate Governance Policy

UMC has an effective corporate governance framework that is consistent with Taiwan's Company Act, Securities and Exchange Act, and other related laws and regulations. UMC also established the "UMC Corporate Governance Practice Principles", "UMC Ethical Corporate Management Best Practice Principles" and "UMC Corporate Social Responsibility Principles" as practical company considerations to protect shareholders' equity, respect stakeholders, enhance information transparency, strengthen the competency of the Board, and uphold corporate integrity and code of conduct.

UMC has established the Nominating Committee to strengthen the functions of the Board of Directors, ensure shareholders' rights, and supervise relevant departments in the formulation of corporate governance rules and systems. The appointment of the Head of Corporate Governance was approved by the Nominating Committee and Board of Directors on March 6, 2019. The Head of Corporate Governance is the Chief Financial Officer, who has been in a managerial position for at least three years in a public company in handling financial and stock affairs, and has in-service professional training in according with the law. The key task of the Head of Corporate Governance is supervising finance division of convening Board meetings and shareholders meetings, producing meeting agenda, minutes and information disclosure, providing business information required by the directors, assisting the directors with legal compliance, and assisting the directors with their responsibilities and in-service training. The following are the 2019 Corporate Governance tasks, and a report has been submitted to the Nominating Committee and Board of Directors:



Ensure that Board members are promptly informed of key company information, and immediately notified after the company has issued a press release.



Institute a Nominating Committee under the Board of Directors to supervise corporate governance plans and implementation by UMC and its subsidiaries. Regularly report UMC's key operational and governance issues or legal amendments to the Board.



Arrange the required number of hours of in-service education for members of the Board, evaluate and purchase appropriate Directors' and Officers' Liability Insurance and report its contents to Board of Directors.



Convene communication meetings on an as needed basis for independent directors, independent auditors and the head of auditing, finance and accounting to implement internal control.



Notify Board of Directors members of the agenda seven days before Board meetings, convene meetings and provide meeting materials. Avoid presence during discussion and voting where a motion presents a conflict of interest. Complete and submit minutes of the Board of Directors meeting to each Board member within 20 days after the meeting.



To fulfill corporate governance, evaluate the performance of the Board of Directors and subcommittees according to the Rules for Performance Assessment of the Board of Directors, and accept external evaluation at least once every three years.



Conduct investor briefings on quarterly business performance, participate in periodic investment forums, designate specialists to service shareholders and establish multi communication channels for investors.



Schedule shareholders' meeting in accordance with the law, complete and post meeting notification, meeting handbook and minutes within legally mandated time frame, record changes such as constitution amendments or Board re-election within legally mandated time frame.

Board of Directors

Nomination and Election

The Company shall have nine (9) to eleven (11) directors who serve a term of three years, elected at the shareholders’ meeting from persons of legal capacity through a nominating system adopted from 2006. A director may be re-elected.

At least three (3) directors or one-fifth of all directors, whichever is higher, shall be independent directors. Their qualifications, shareholding limitations, whether or not they concurrently serve in other positions, methods of nomination and election, and other related matters shall be subject to applicable laws.

According to Article 192-1 of the R.O.C. Company Act, UMC announced on March 20, 2018, the period for accepting the nomination of director candidates (including independent directors), the number of directors to be elected, the place designated for accepting the roster of director nominees and other necessary matters. Any shareholder holding 1% or more of the outstanding shares of the Company may nominate candidate(s) for directors in writing. Any shareholder qualified to nominate may submit nominee(s) to the director, and shall send, during the nomination period from April 3 to April 16, 2018, the name, educational background and past work experience of the nominee(s), a letter signed by each nominee consenting to act as director if elected, a written statement issued by each nominee assuring that he/she is not prohibited from acting under any of the circumstances set forth in Article 30 of the R.O.C. Company Act, and other relevant documents signed and provided by each nominee to UMC via registered mail sent to the Finance Division of the Company. There were no nominations from stockholders except those from the Board during the nomination period.

> Director Candidate List

> Directors' Professional Knowledge and Independence Information

> List of Directors Elected

The Company established "the Rules for Performance Assessment of the Board of Directors" in October of 2015 and conducts annual self-assessment of the BOD, its functional committees and individual board members' performance. The assessment covers aspects such as awareness of the duties of directors, the degree of participation in the Company's operations, understanding the business and its risks, the improvement of policy decision quality, the composition and structure of the board of directors, the election and continuing professional development of directors, internal control and Audit Committee communications, oversight of the financial reporting process, oversight of the external audit function and so on.

In 2018, the self-assessment of the Board of Directors, functional committees and individual board members concluded that the performance result was "Excellent," and the reports were submitted to the Nominating Committee and Board of Directors on March 6, 2019.

To improve the operating efficiency of the Board of Directors and enhance corporate governance, “the Rules for Performance Assessment of the Board of Directors" was revised by UMC and approved by the Board of Directors in October of 2017, which requires the Company's board performance assessment to be conducted by an external independent professional institution or a panel of external experts and scholars at least once every three years.

The Company engaged with Taiwan Corporate Governance Association to conduct an assessment of board performance and efficiency, and completed the evaluation on March 7, 2018. The assessment comprised of 8 scopes and 38 indicators including Composition, Direction, Authorization, Monitoring, Communication, Internal control, Risk management and Discipline of the Board, and was executed through online self-assessment and due diligence.

The report concluded that the discretion of the company's long-term strategy was incorporated into the composition of the Board, and the establishment of the Nominating Committee surpassed governmental regulations; the independent directors with diversified backgrounds were devoted to and were fully accountable with regard to their duties of direction and monitoring; the intensive communication between board members and management team ensured timely and sufficient information delivery, thus building an open and transparent culture for the Board. The report also provided recommendations on periodic assessment and human resource development for the Company to enhance the efficiency of the Board.

Audit Committee

The Audit Committee assists the Board of Directors in performing its supervision functions. It is also responsible for tasks defined by the Company Act, Securities and Exchange Act and other relevant regulations. Since UMC is listed on the NYSE, it also has to comply with the U.S. regulations regarding foreign issuers. The Audit Committee is comprised of all independent directors. Cheng-Li Huang and Wenyi Chu qualify as audit committee financial experts. The Committee shall meet at least once every quarter, and may be convened any time if necessary.

The Committee's duty and responsibility includes the following items: supervising the financial reporting of the Company, internal audit, internal control of the Company, material transactions of assets and derivatives, loans, endorsements, guarantees, engaging and removing the Company's independent auditors and accessing such auditors' compensation and independence, and appointing or removing managers of finance, accounting and internal audit divisions. The Committee is also responsible for dealing with any whistleblower cases received and periodically reviewing the Company's compliance with government law, documentation that involves government agencies, and the compliance of the employees' Code of Conduct. The Committee may also engage an attorney, certified public accountant, or other professional to assist them in exercising the Committee's duties. For further information regarding UMC's audit committee charter, please click on the link below.

Remuneration Committee

The goal of Remuneration Committee's operation is to strengthen corporate governance and risk control, and to evaluate and monitor the Company's remuneration system for its directors and managers while considering the provision of incentives to facilitate talent retention. The committee shall be composed of all the Company's independent directors, and convene meetings accordance with the laws.

Capital Budget Committee

The Capital Budget Committee shall comprise of members from the Company's independent directors and non-executive directors. The Committee's goal includes review of the Company's capital expenditure budget, with the intent to strengthen long-term corporate strategy, financial planning and business performance.

> Link to Capital Budget Committee Charter

Nominating Committee

The Nominating Committee shall comprise of members from the Company's independent directors. The Committee's goal is to assist the Board of Directors (“the Board”) to enhance management mechanism and to improve corporate governance for the Company’s sustainable development. The objectives of the Committee are as follows: 1. To constitute nomination policy and succession plans of the directors and the executives, then to search, to review and to propose the candidate list of the directors and the executives accordingly. 2. To construct and to develop the operation of the Board and the sub-committees, as well as to plan and to execute the performance assessment of the Board, the sub-committees and the executive(s). 3. To enhance corporate governance system and practices in order to protect the interests of stakeholders.

> Link to Nominating Committee Charter

Full Version

> Download UMC Corporate Governance Statement (pdf, 29kb)

Individual Sections

> The Board of Directors' Responsibilities and Meetings
> Audit Committee's Responsibilities
> Structure of the Board of Directors

> Download Articles of Incorporation of UMC (pdf, 41kb)
> Download the UMC Acquisition or Disposal of Assets Procedure (pdf, 242kb)
> Download the UMC Financial Derivatives Transaction Procedure (pdf, 131kb)
> Download the UMC Loan Procedure (pdf, 95kb)
> Download the UMC Endorsements and Guarantees Procedure (pdf, 101kb)
> Download the Organization and Operation of UMC's Internal Audit (pdf, 27kb)
> Download the UMC Ethical Corporate Management Best_Practice Principles(pdf, 143kb)
> Download the UMC Code of Ethics for Directors and Officers(pdf, 38kb)
> Download the UMC Employee Code of Conduct (pdf, 119kb)
> Download the UMC Corporate Social Responsibility Principles (pdf, 225kb)
> Download the UMC Procedures for Handling Proprietary/Strictly Confidential Information (pdf, 160kb)
> Download the UMC Corporate Governance Practice Principles (pdf, 96kb)
> The differences between the UMC's corporate governance practices and those required of domestic companies under NYSE listing standards

> Code of Conduct violations can be reported by e-mail or phone:
Phone: 0800-024-399 (toll free) or 03-5782258 ext.31425

Please note that all information is governed by the following Terms & Conditions.

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