The Firsteam Charter specifies a director election system based on candidate nomination, upholding principles such as diversity of members and merit-based employment. Through regular elections, outstanding individuals are selected to serve in accordance with the company's operational needs. Directors, besides possessing professional competence in the industry, also have extensive practical experience and a keen understanding of industry dynamics. Currently, there are 7 director seats, including 3 independent directors. At least one meeting is held per quarter, with a total of 10 meetings in 2022. Directors also adhere to a high level of self-discipline in avoiding conflicts of interest. If a director has a conflict of interest with an agenda item, they are required to explain the essential content of the conflict of interest at the meeting. They are not allowed to participate in the discussion or vote if there is a risk of harm to the company's interests. Furthermore, Firsteam has established rules for the proceedings of the board of directors and the responsibilities of independent directors. To effectively manage risks and enhance the willingness of professional talents to serve as directors, Firsteam provides directors with liability insurance, relieving them of concerns while performing their duties and reducing the risk of significant damage to the company and shareholders due to errors or negligence of directors. During the process of formulating operational policies, the board of directors prioritizes meeting customer demands promptly in the shipping business and providing outstanding performance, while emphasizing service excellence in the department store business. These two core concepts guide the planning of work objectives by departmental colleagues, leading to the implementation of related business activities and concerted efforts to achieve goals. Additionally, in March 2021, Firsteam established a governance supervisor position, appointed by the Chief Financial Officer. The main responsibilities include assisting independent directors and general directors in performing their duties, providing necessary information, arranging training for directors, maintaining smooth communication between directors and business managers, and arranging communication meetings between independent directors and internal audit managers or certified public accountants. Depending on the characteristics of Firsteam's industry and the educational and experiential background of directors, assistance is provided in arranging courses for independent directors and general directors. Furthermore, assistance is provided in the procedures and decision-making of board meetings and shareholder meetings, ensuring compliance with regulations. After meetings, important decisions made by the board are reviewed for appropriate messaging to ensure legal compliance and accuracy. Additionally, the supervisor is responsible for drafting the agenda for board meetings, notifying directors seven days in advance, providing meeting materials, and completing meeting minutes within twenty days after the meeting. They are also responsible for pre-registering for shareholder meetings, preparing meeting notices, agenda books, and meeting minutes within the statutory deadlines, and handling changes in registration due to amendments to the articles of association or director elections.
Diversity and Independence of the Board of Directors:
(I) Diversity of the Board of Directors:
The Company advocates and respects the policy of board diversity in order to strengthen corporate governance and promote the sound development of board composition and structure, believing that the diversity approach will help enhance the overall performance of the Company. Board members are selected on the basis of merit and have diverse and complementary abilities across industries, including basic composition (e.g., age, gender, nationality, etc.), industry experience and related skills (e.g., marine, department stores, finance, accounting, legal affairs, and business), as well as business judgment, operation management, leadership, and crisis management. In order to strengthen the functions of the Board of Directors to achieve the desired goals of corporate governance, Article 20 of the Company's “Corporate Governance Principles” state that the Board of Directors as a whole should possess the following competencies:
1. The ability to make judgments about operations.
2. Accounting and financial analysis ability.
3. Business management ability.
4. Crisis management ability.
5. Industry Knowledge
6. An international market perspective.
7. Leadership ability.
8. Decision-making ability.
(1) The 7 members of the 21st Board of Directors of the Company (including 3 independent directors) are as a whole capable of business judgment, leadership, business management, international market perspective and crisis management, and have industry experience and professional capabilities. Among them, Director Chien-Wan Chuang and Director Dennis Wai-Tak Yau are experienced in the maritime industry; Director Qing-Hai Ng in the department store industry; Director Jen-Hao Kuo, Director Qing-Hai Ng, and Independent Director Bing-Sen Lei in professional services and marketing; Director Jen-Hao Kuo, Director Dennis Wai-Tak Yau, Independent Director Tseng-Ping Chao, Independent Director Hsin-Kai Kung, and Independent Director Ping-Sum Lui in finance and treasury; Director Jen-Hao Kuo in construction and engineering; Director Jen-Hao Kuo, Independent Director Tseng-Ping Chao, Independent Director Hsin-Kai Kung, Independent Director Jung-Tsung Yang, and Independent Director Ping-Sum Lui in banking, insurance and real estate; Director Qing-Hai Ng and Independent Director Tseng-Ping Chao and Independent Director Ping-Sum Lui in business and supply; Independent Director Tseng-Ping Chao and Independent Director Hsin-Kai Kung, and Independent Director Ping-Sum Lui in information and technology; Director Dennis Wai-Tak Yau and Independent Director Jung-Tsung Yang in legal; Director Jen-Hao Kuo, Director Qing-Hai Ng, Director Dennis Wai-Tak Yau, Independent Director Hsin-Kai Kung, and Independent Director Ping-Sum Lui in accounting; Director Jen-Hao Kuo, Director Qing-Hai Ng, Director Dennis Wai-Tak Yau, Director Chien-Wan Chuang, Independent Director Tseng-Ping Chao, Independent Director Hsin-Kai Kung, Independent Director Jung-Tsung Yang, and Independent Director Bing-Sen Lei in risk management.
(2) The average term of office of the Company's incumbent directors is 4.7 years. Among them, independent director Bing-Sen Lei has been in office for 0.8 years (newly elected in the by-election on June 24, 2022); independent director Jung-Tsung Yang 2.8 years; director Wei-Te Chiu 4.8 years; director Chien-Wan Chuang 5.3 years; independent director Tseng-Ping Chao 5.8 years; and director Jen-Hao Kuo and director Ching-Hai Huang 6.8 years separately. None of the independent directors has been in office for more than three terms.
There are 3 foreign (Hong Kong and Australia) and 4 local directors, all of whom are male, and the composition is 43% of 3 local independent directors and 43% of 3 employee directors. The age distribution of the board members is 2 directors aged 41 to 50, 2 directors aged 51 to 60, and 3 directors aged 61 to 70.
In addition to the above, the Company also places emphasis on gender equality in the composition of the Board of Directors and intends to add at least one female director at the most recent shareholders' meeting and will continue to strive to have the Board of Directors comprise at least 2 female directors in the future.
(3) The aspects, complementarity and implementation of the diversity of the Board of Directors have already been carried through and are superior to the standards set forth in Article 20 of our Corporate Governance Principles. In the future, we will continue to revise the diversity policy, including but not limited to the basic requirements and values, professional knowledge and skills, and other standards in accordance with the operation of the Board of Directors, business model and development needs, so as to ensure that the members of the Board of Directors are generally equipped with the necessary knowledge, skills and education to perform their duties.
(II) Independence of the Board of Directors: The 21st Board of Directors of the Company consists of 7 directors, with a composition of 4 regular directors and 3 independent directors, with 43% of the composition being independent directors. No independent Director has been an employee, director, or supervisor of the Company or its affiliates within two years prior to his or her election and during his or her term of office. None of the individual’s spouse, relative within second degree of kinship, or lineal relative within third degree of kinship holds is an employee, director, supervisor, or managerial officer of the Company or its affiliates, and I am not related to any other director as a spouse or relative within two degrees, and the individual is not related to any other director as a spouse or relative within second degree of kinship or has not been elected by or on behalf of the government or a juristic person as provided in Article 27 of the Company Act.
Note 1: Professional qualifications and experience: Specify the professional qualifications and experience of each director and supervisor, and in the case of audit committee members with accounting or financial expertise, specify their accounting or financial background and work experience, and state whether they have any of the circumstances under the provisions of Article 30 of the Company Act.
Note 2: The status of the independence of independent directors should be stated, including, but not limited to, whether they, their spouse or relatives within second degree of kinship are directors, supervisors or employees of the Company or its affiliates; the number and proportion of shares held by them, their spouses or relatives within second degree of kinship (or in the name of others); and whether they are directors of companies with specific relationship with the Company (refer to Article 3, Paragraph 1, Subparagraph 5 to 8 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies). The amount of remuneration they received from the Company or its affiliates for business, legal, financial and accounting services in the last 2 years.
Note 3: Please refer to Eight. Special Matters of this annual report for I.(II)3. Directors, supervisors and general managers of affiliates