UMC Ranked Top 5% in Corporate Governance Evaluation for 8 Straight Years and Aims for Greater Board Diversity
In 2022, UMC once again ranked in the top 5% in the Corporate Governance Evaluation conducted by the Taiwan Stock Exchange and Taipei Exchange. The Company is among the nine firms that have received this recognition every year since the evaluation was implemented in 2015.
UMC’s performance in the annual evaluation is due to thorough implementation of the four major dimensions of corporate governance improvement: Strengthening the operations of the Board of Directors and the functions of directors, protecting shareholders’ rights and interests, timely disclosure of information, and implementing corporate social responsibilities. One of the key areas UMC has focused on is the diversification of its Board of Directors.
After successive revisions of the Company Act, the role of boards of directors in the operations of enterprises has come to receive more emphasis, and the domestic corporate legal system has also gradually changed from being “shareholders’ meeting-centric” to being “board of directors-centric.” In addition to its traditional task of supervising company operations, the Board of Directors now also plays a mediating role in the conflicts of interest of its various stakeholders, and furthermore must also assist management in drafting important strategies with which the Company can use to respond to the complex and uncertain external environment, so as to improve the Company’s operational performance. When the status and importance of the Board of Directors has been so greatly elevated, the composition, functions, and operations of the board become some of the important issues in corporate governance.
Diversification of the Board is Key
Diversity is a key pillar of board effectiveness. The main aim of board diversification is to bring objective and diverse perspectives to the Board. The range of backgrounds, professional abilities, and experience among the members of UMC’s Board of Directors is very extensive, and this helps to endow the Board with a broader field of vision in the decision-making process, enabling it to perceive problems from different perspectives and propose solutions, and also enabling it to effectively supervise the management team and reduce the costs of agencies.
UMC’s implementation of board diversity begins with having a sound system. The Company has devised a policy on the nomination and selection of directors, which takes into account the organizational culture, nature of operations, and long-term development, and we have formulated guidelines which diversify the composition of the Board of Directors. The selection, review and nomination of board members is discussed and resolved by a nomination committee composed of independent directors, and nominations are then made to the Board of Directors and the Shareholders’ General Meeting.
The UMC Board of Directors is composed of nine directors with different professional backgrounds, who are responsible for the Company’s operation and supervision. In the Board, five are independent directors, one is an individual non-executive director, and three directors also serve as members of the Company’s management team. Independent directors account for more than half of the Board seats, and female directors account for more than one-fifth of Board seats. Going forward, the number of female directors will be progressively increased in accordance with gender equality principles.
Additionally, the tenures and seniority of the Company’s independent directors are also evenly distributed. One director has served for six years, two has served for three years, and two directors are newly elected. By ensuring a range of tenures, the Board can combine both accrued experiences and fresh perspectives to enhance its effectiveness.
UMC’s board members have diverse academic and industry backgrounds. Their experiences include serving as presidents of national-level universities, fellows of Academia Sinica, and heads of the Ministry of Science and Technology and of other research institutes. Other professional backgrounds of the board include financial expertise in the fields of financial accounting and strategic management, as well as management experience industries including semiconductor, electronics, and finance. In addition to professional knowledge and technical skills, the experiences and opinions of board members, through the operations of various functional committees, contribute significantly to corporate business decision-making and to medium and long-term strategic planning. Furthermore, directors are also able to advise on ESG issues, which include corporate governance, environmental sustainability, corporate social responsibility, regulatory compliance, and protection of human rights.
For the composition of UMC’s Board of Directors, as well as the implementation of its diversity policy, please refer to the Company’s website for relevant information:
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