Accountable Governance

Corporate Governance

CTCI is committed to promoting a transparent, responsible and effective overseeing corporate governance system, and implementing the diversity and independence of board members. We are looking forward to inspiring visionary decisions to respond potential risks and challenges of the Company by integrating different views. CTCI has achieved the highest recognition, 8 times in the “Top 5% of the Corporate Governance Evaluation System “and 6 times in the “Top 10% of listed companies in the non-finance and non-electronics industry with a market value of TWD 10 billion.” The performance is highly recognized and making a leader in the listed companies and corporate governance.

Composition of Board of Directors

CTCI's Board of Directors is the Company's highest decision-making team, responsible for overseeing CTCI's overall operational responsibilities while overseeing management's policy implementation and results. To establish sound and effective board operations, CTCI has adopted the candidate nomination system for electing its Board of Directors according to its "Articles of Incorporation" and the "Rules Governing the Election of Directors." CTCI has elected 12 Directors (including four Independent Directors within one woman Independent Director) who are composed of the Board of Directors; each Board member term is for three years. Pursuant to the "Rules Governing Procedure for Board of Directors' Meetings," the Board shall convene a meeting at least once every quarter. To follow principles of integrity and avoiding conflict of interest, CTCI has adopted "Ethical Corporate Management Principles." Whenever a meeting proposal involves a board member, his/her spouse, a blood relative within the second degree of kinship, or any company which has a controlling or subordinated relation, he/she shall recuse himself/herself and may not act as a proxy of another director to exercise voting rights on that matter.
　
To keep improving operation efficiency of the Board, there is "Regulations Governing the Board Performance Evaluation" in place that evaluates the whole Board of Directors, individual directors and functional committees. Such board performance evaluation is carried out at least once a year. Above results are considered by nominating the candidate of Directors. The Board performance evaluations in 2022 were carried out at the beginning of 2023 by self-evaluation of individual Board members, the results of which showed that the board is operating well. As to external evaluation, CTCI updated its guidelines in November 2018 that requires a board performance evaluation to be carried out by external evaluation unit once every 3 years. The latest external evaluation is completed in June, 2021, and report to Nominating Committee and the Board of directors in November, 2021. The report result has been disclosed on official website.

Directors' Diversity

CTCI's Board of Directors serves as the Company's highest decision-making body, overseeing the Company's overall operations and the implementation of management's policies. The Board meets at least once a quarter, and as of the end of 2023, the average attendance rate among board members was 88.89%. To establish a sound and effective board operation, CTCI, in accordance with its Articles of Incorporation and Director Election Procedures, adopts a candidate nomination system to elect 12 directors (including 4 independent directors, of which 1 is a female independent director) to serve on the board for a three-year term. The Board meets at least once a quarter pursuant to the Board Meeting Procedures and adheres to the principles of integrity and avoidance of conflicts of interest. The company has established a Code of Conduct stipulating that directors must recuse themselves from discussions and voting on matters involving their personal interests, those of their spouses, or of companies with which they have a controlling or subordinate relationship.
　
To keep improving operation efficiency of the Board, there is "Regulations Governing the Board Performance Evaluation"(the “Regulation”) in place that evaluates the whole Board of Directors, individual directors and functional committees. Such internal board performance evaluation is carried out at least once a year and external board performance evaluation is carried out at least once every 3 years by an external independent professional institution or a panel of external experts and scholars. The “Regulation” was revised with the resolution of the board of directors on December 15, 2023, and “Participation in sustainable management (ESG)” was included in the evaluation indicators.
　 
to strengthen the aspect of sustainable governance. The Board performance evaluations in 2023 were carried out at the beginning of 2024 by self-evaluation of individual Board members, the results of which showed that the board is operating well. As to external evaluation, the latest external evaluation is completed in June, 2021, and report to Nominating Committee and the Board of directors in November, 2021. We will arrange another external evaluation in 2024. Above results are considered by nominating the candidate of Directors. The report result has been disclosed on official website.
　

Directors' Diversity

CTCI's "Corporate Governance Principles" demands that the Board composition should be diverse, and that appropriate policies should be formed with regard to the Board's operations, operating dynamics and development needs, which includes but is not limited to the following two major aspects. All members of the Board should possess necessary knowledge, skills, and experience to perform their duties. To achieve the ideal goal of corporate governance, the following eight types of abilities are what we expect the Board of Directors to have:
　

According to corporate principles, among the 12 directors of CTCI's 15th board of directors, Chairman Michael Yang, Director John T. Yu, Director Quintin Wu, Director Johnny Shih, Director Yancey Hai, Director An-Ping Chang, Director Wenet Pan, and Director Paul Chen are all corporate managers of listed companies from different industries. These industries include engineering consultants, plastics, textiles, electronics, optoelectronics, and cement. These members not only excel at leadership, management, decision-making, and execution -- they are also prominent leaders in their respective industries. As for the independent directors, we have, Jack Huang with experience in practicing law, former Minister of Economic Affairs Yen-Shiang Shih, former Public Construction Committee Chairperson Frank Fan, and qualified accountant Yi-Fang Chen. These four members are either iconic figures from their respective industries, government, the legal field, or academia. This allows CTCI to attain its goals of diversity and complementarity professionals to serve on its Board. In order to implement the diversification policy of the composition of the board of directors, CTCI aims to have at least one female director. Currently, there is 1 female director already. Moreover, CTCI . Chairman is also the member of Managing officer as Vice Chairperson of Management Strategy Committee.

The Operation of Board of Directors

Remuneration policy

The Remuneration Committee formulates and reviews the performance evaluation and remuneration policies of the Company's directors and managers on a regular basis. The remuneration policy, long-term incentives and payment standards for the Chairman (CEO) and all managerial officers are reviewed by the Remuneration Committee and submitted to the Board of Directors for approval. The remuneration to directors (including the Chairman (CEO)) is determined by the Board of Directors with reference to the standards of listed companies in the industry and their contribution, and the Company's operating performance (consolidated revenue, earnings per share, and return to shareholders). Managerial salaries are closely tied to the Company's operational results and performance. Each year,  based on the Company's performance indicator scores and in reference to the compensation levels in the industry, the proposal for managerial remuneration is determined. For the details of the remuneration policy, standard, and combination of the Company, the association in setting remuneration, and the correlation with the business performance and future risk, please refer to the 2023 CTCI Annual Report.
　
CTCI connects the CEO's and other senior executives' performance to sustainability targets in order to integrate the Company's operational goals with sustainability outcomes. Financial objectives include the "Green Engineering Contract Amount Achievement Rate,"(10%) while non-financial objectives include the "Environmental Protection (Incl. Net Zero Results)"(15%) and the "Net Zero EPC Achievement Rate."(10%) 
　

In addition, for the variable remuneration of the Chairman (CEO), the performance score is obtained by comparing the consolidated revenue, return on equity (ROE), and earnings per share (EPS) data for the current year with the values of the past 5 years. The basis for achieving the financial performance indicators. In 2023, CTCI's highest personal annual income is 23.35 times the median annual total remuneration of other employees, and the highest personal annual income growth rate is 1.35 times the median of other employees' annual total remuneration.