Governance

The Major Board Resolutions

 

Accomplishments in Integrity Management

To ensure ethical business practices, AUO follows “ Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and establish “AUO Enterprise Integrity Policy” and “AUO Declaration Regulations for Conflict of Benefits”. HR Headquarters to be responsible for formulating the ethical management policy and preventive measures as well as supervising their implementation. A report must also be made to the Board at least once a year.

 

The enforcement of ethical business management includes requiring every new employee to take the integrity course (10 minutes) and to sign an integrity statement. In 2018 we have trained 1,992 employees. The signing rate is 100%. A global integrity awareness week is held every year in September. Integrity-related messages are announced by e-news and broadcast by voice record to ensure that all employees understand the core AUO values on integrity.

 

Employees in anti-corruption positions are also targeted for integrity education. Anti-corruption employees are required to report any conflicts of interest each year. In 2018, 153 employees in anti-corruption positions have reported and the reporting rate is 100%.

 

Communications between Independent Directors/ Internal / Independent Auditors

A. The channels of the communications between the independent directors, the internal auditors, and the independent auditors

  1. The Company’s independent auditors have presented the findings of their quarterly review or audits on the Company’s financial results. Under applicable laws and regulations, the independent auditors are also required to immediately communicate to the Audit Committee any material matters that they have discovered.
  2. The head of Internal Audit presents the findings of all audit reports in the quarterly meetings of the Audit Committee. If material unusual matters occur during the auditing process, the head of Internal Audit will report to the members of the Audit Committee immediately.

 

B. The major matters of the communications between the independent directors and the independent auditors

 

The communication between the Audit Committee and the independent auditors works well. The major matters of these communications since 2018 are as follows

Date Descriptions of the Major Matters Any Independent Director Had a Dissenting Opinion or Qualified Opinion
2018/02/06 The findings of the audits on the Company’s financial results for FY 2017 None
2018/04/25 The findings of the review on the Company’s financial results for the three months ended March 31, 2018 None
2018/07/25 The findings of the review on the Company’s financial results for the six months ended June 30, 2018 None
2018/10/30 The findings of the review on the Company’s financial results for the nine months ended September 30, 2018 None

 

 

C. The major matters of the communications between the independent directors and the internal auditors

 

The communication between the Audit Committee and the internal auditors works well. The major matters of these communications since 2018 are as follows:

 

Date Descriptions of the Major Matters Any Independent Director Had a Dissenting Opinion or Qualified Opinion
2018/02/06 1. The findings of the internal audit reports for the fourth quarter of 2017
2. Statement of Internal Control System for FY 2017
None
2018/04/25 The findings of the internal audit reports for the first quarter of 2018 None
2018/07/25 The findings of the internal audit reports for the second quarter of 2018 None
2018/10/30 The findings of the internal audit reports for the third quarter of 2018 None

 

 

Top 10 Shareholders

Top 10 Shareholders of AUO

Ex-dividend Record Date:2018.07.20

Shareholders’Names Shares Shareholding
Qisda Corporation 663,598,620 6.90%
ADR of AU Optronics Corp. 480,127,279 4.99%
QUANTA COMPUTER INC. 443,930,307 4.61%
Fubon Life Insurance Co., Ltd 367,500,000 3.82%
Trust Holding for Employees for AU Optronics Corp. 297,948,322 3.10%
Tong Hwei Enterprise Co., Ltd. 128,800,000 1.34%
VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS 92,924,669 0.97%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds 92,036,640 0.96%
Min Hwei Enterprise Co., Ltd. 90,000,000 0.94%
Acadian Emerging Markets Equity II Fund, LLC 66,606,000 0.69%
Total 2,689,328,817 27.96%

 

Diversity policy of the members of Board of Directors 

  

Name Gender Age Law, Finance or Accounting background Industry or Technology  background
Below 55 years old 56-65 years old Above 66 years old
Shuang-Lang (Paul) Peng Male   V     V
Kuen-Yao (K.Y.) Lee Male      V   V
Kuo-Hsin (Michael) Tsai Male V       V
Peter Chen Male   V     V
Vivien Huey-Juan Hsieh Female   V   V V
Mei-Yueh Ho Female     V   V
Ding-Yuan Yang Male     V   V
Chin-Bing (Philip) Peng Male   V   V V
Yen-Shiang Shih Male     V   V

* As of February 28, 2018

 

 

Full- (or part-) time unit of Corporate Governance, Corporate Social Responsibility and Ethical Corporate Management

Full- (or Part-) Time Unit Who Sets into Action and The Operation and Implementation Status of The Unit
Corporate Governance

The corporate governance affairs of the Company is supervised and arranged by Risk Management Team of CSR Committee and setting a goal to protect shareholder equity and to enhance BOD function. The Chief of Risk Management Team is occupied by CFO whose qualifications meet the regulations of Item 1 of Article 3-1 of Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. His functions include providing information to directors and audit committee for them to execute their jobs and the development of the latest regulations regarding corporate business and so as to assist directors and audit committee to comply with the law. Corporate governance related affairs (including handling matters relating to board meetings and shareholders meetings according to laws, handling corporate registration and amendment registration, producing minutes of board meetings and shareholders meetings, and periodically reporting the progress of corporate governance to the Board of Directors every year.) are executed by the secretary unit of Board of Directors and stock unit respectively.The corporate governance affairs of the Company is supervised and arranged by Risk Management Team of CSR Committee and setting a goal to protect shareholder equity and to enhance BOD function. The Chief of Risk Management Team is occupied by CFO whose qualifications meet the regulations of Item 1 of Article 3-1 of Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. His functions include providing information to directors and audit committee for them to execute their jobs and the development of the latest regulations regarding corporate business and so as to assist directors and audit committee to comply with the law. Corporate governance related affairs (including handling matters relating to board meetings and shareholders meetings according to laws, handling corporate registration and amendment registration, producing minutes of board meetings and shareholders meetings, and periodically reporting the progress of corporate governance to the Board of Directors every year.) are executed by the secretary unit of Board of Directors and stock unit respectively.

 

The execution progress in 2018 are as follows,

1. The Company convened 6 Board of Directors, 7 audit committee and 4 compensation committee.

2. The Company convened 1 Annual General Shareholders’ Meeting.

3. The members of Board of Directors finished at least 6 hours training lessons.

4. The Company insured the directors and important employees for their director responsibilities and reported to the Board of Directors after the renewal of the insurance.

5. The result of the internal self-assessment of the Board of Directors is exceeding standards. The Company also commissioned Taiwan Corporate Governance Association to process external efficacy assessment of the Board of Directors.

6. The Company is one of the top 5% companies for the Forth Corporate Governance Assessment.

Corporate Social Responsibility

The Company’s CSR Committee was established in September, 2013 and each sub-committees were created according to its substance importance. Secretariat Office oversees the operations of the CSR committee. From November, 2017, the Company processed a CSR 2.0 re-organization to respond accordingly to the international trend. The Committee is chaired by the Chairman/ CEO. Seven sub-committees were created to process their functions and were managed by senior supervisors.

 

The Committee adopts the PDCA approach (Plan, Do, Check, and Action), delivers stakeholders’opinion to each sub-committee in the end of the year and authorizes each sub-committee to develop action plan. Projects are carried out after reviewed and approved by the chairman of the Committee in the meeting next year.

 

In 2018, CSR Committee convened 4 quarterly meetings. The effectiveness of management guidelines and issues of stakeholders’ concern are delivered by each sub-committee to the chairman of the Committee in the meeting. CSR Committee will report to the directors in the first Board of Directors every year.

Ethical Corporate Management

To strengthen the management of integrity operations, AUO had its HR Headquarters implement and monitor the execution of integrity operations policies and corruption prevention solutions. The HR Headquarters reports to the Board of Directors at least once a year.


This integrity operations includes each new employee is required to attend an advocacy session on AUO Integrity Policy and sign a declaration of integrity. In addition, Global Integrity Advocacy Week is held annually to promote relevant information on integrity. Furthermore, divisions that engage closely with suppliers or are involved in supplier affairs have been identified as in positions of high integrity risk, for which the employees of these divisions are required to undergo mandatory training on an annual basis. This training covers reporting of conflict of interest and law compliance courses. On the other hand, AUO suppliers and subcontractors are required to sign a Statement of Compliance with AUO Supplier/Subcontractors Code of Conduct.

 

 

Comparison of NYSE Corporate Governance Rules and AUO Corporate Governance Practices

Please refer to the document.