Corporate Governance

The UMC Board of Directors comprises of 9 members, including 5 seats for independent directors and 1 for a non-executive director; 3 serve as administrative directors. More than half of the director seats are filled by members of outside companies. There are 2 seats currently reserved for a female director. Based on our policy of gender equality, UMC will increase the female director seats progressively.

The tenures of independent directors are also diversified; there is 1 director that has served for 6 years, 2 directors for 3 years and 2 newly elected directors.

The board of UMC is composed of members with diversified backgrounds of industry, government and academy. The experiences of board members include the president of national university, academician of Academia Sinica, the Minister of Science and Technology, the president of ITRI, financial experts in finance, accounting and strategy management fields, and professionals from the semiconductor industry, ICT business administration and financial institutions. The directors satisfy basic criteria and professionalism requirements, and through activities of the sub-committees, can also contribute their experiences to supervise and govern issues related to corporate governance, environmental sustainability, corporate social responsibility, legal compliance and human rights protection.

All independent directors meet the restriction of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies for other mandates, each independent director concurrently does not serve as an independent director for more than 3 listed companies.

The Company conducts annual self-evaluation of the performance of the Board of Directors, its functional committees and individual board member based on the “Rules for Performance Evaluation of the Board of Directors" approved by the Board of Directors. The performance results are graded as "Excellent", "Good", or "Room for Improvement". The Nominating Committee conducted the self-evaluation for 2023 of the Board of Directors, Audit Committee, Remuneration Committee, other functional committees(Capital Budget Committee and Nominating Committee) and individual board members and reported the result to the Nominating Committee and Board of Directors on February 27, 2024. The evaluation content is listed below, and the performance result was "Excellent". The Chief Corporate Governance Officer will persist in improving communication with directors to enhance the quality of the Board of Directors' meetings.

1. Performance evaluation of the Board of Directors
   Evaluation content：
   (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.
   Evaluation period：2023/1/1~2023/12/31.
   Performance result：Excellent.
2. Performance evaluation of the functional committees (includes Audit Committee, Remuneration Committee, Capital Budget Committee and Nominating Committee)
   Evaluation content：
   (1)Participation in the operation of the company;
   (2)Awareness of the duties of the functional committee;
   (3)Improvement of quality of decisions made by the functional committee;
   (4)Composition of the functional committee and election of its members; and
   (5)Internal control.
   Evaluation period：2023/1/1~2023/12/31.
   Performance result of Audit Committee：Excellent.
   Performance result of Remuneration Committee：Excellent.
   Performance result of Capital Budget Committee：Excellent.
   Performance result of Nominating Committee：Excellent.
3. Performance evaluation of individual board members
   Evaluation content：
   

(1)Familiarity with the goals and missions of the company;
(2)Awareness of the duties of a director;
(3)Participation in the operation of the company;
(4)Management of internal relationship and communication;
(5)The director's professionalism and continuing education; and
(6)Internal control.
Evaluation period：2023/1/1~2023/12/31.
Performance result：Excellent.

To improve the operating efficiency of the Board of Directors and enhance corporate governance, “The Rules for Performance Evaluation 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 evaluation 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 an external independent institution, Taiwan Corporate Governance Association, a professional institution is independent and has no business relation with the Company, to conduct an assessment on board performance, and completed the evaluation on October 25, 2023. The assessment comprised of 8 scopes including Composition, Direction, Authorization, Monitoring, Communication, Internal control, Risk management and Discipline of the Board, and the external institution executed the review through online self-assessment and interview. The assessment report was released on December 8, 2023 and reported to the Nominating Committee and the Board on December 13, 2023.

  The report concluded that UMC paid significant attention to the professionalism and diversity of the composition of the Board, and rigorously selected qualified candidates based on the Company's development needs and strategic goals. The seats of independent directors and female directors has exceeded the regulatory requirements, the Company has made leading arrangements with international perspective and which is praiseworthy. Board members actively speak on various issues and directly communicate with the management, the Board share a good culture with aggressive and effective benefits. The Board focused the importance in sustainable development and risk management issues, which not only integrated sustainable goals with business operations, but also linked employee compensations with the achievement of ESG KPIs, which will strive to enhance the effectiveness of sustainable management. The Company emphasized on the development and cultivation of high-level management, and the succession plan in management team to reserve talents for the company's sustainable development. The report addressed a recommendation on renaming the Nomination Committee to the Sustainability and Nominating Committee, and improving the relevant rules and regulations of the ESG organization, in order to enhance the effectiveness and efficiency of the Board. The company will implement the improvement plan within the next year in accordance with the recommendations of the report.