Rules of Procedure for Board of Directors Meetings of CSBC Corporation, Taiwan
Rules of Procedure for Board of Directors’ Meetings of CSBC Corporation, Taiwan
Adopted in the 16th Board meeting of the 12th Board of Directors on July 30th, 2007
First amendment in the 2nd Board meeting of the 13th Board of Directors on January 25th, 2008
Second amendment in the 4th Board meeting of the 13th Board of Directors on February 22nd, 2008
Third amendment in the 9th Board meeting of the 13th Board of Directors on June 23rd, 2008
Fourth amendment in the 6th Board meeting of the 14th Board of Directors on June 30th, 2011
Fifth amendment in the 9th Board meeting of the 14th Board of Directors on March 21st, 2012
1.These Rules of Procedure are instituted pursuant to Article 2 of the “Regulations Governing Procedure for Board of Directors Meetings of Public Companies” to establish a good governance system for the Board of Directors, perfect its supervision function and strengthen its management capacity.
2.These Rules shall applyto the Board of Directors’ meetings, the major agenda items, operational procedures, items to be recorded in the minutes, announcements and other matters for compliance, except otherwise stipulated in the Company Act and articles of incorporation.
3.The Board of Directors meetings shall be convened and chaired by the Chairman. However, the first Board meeting for each term of Board of Directors is to be convened by directors winning the greatest number of votes in the shareholders’ meeting. The person with the convening right shall act as the chairman of the meeting. When there are two or more directors with convening right, a mutual election shall be conducted to select one as the chairman of the meeting.
When the Chairman is on leave or unable to exercise his/her power of office, he/she shall designate a director as the acting chairman. When no acting chairman is designated, a mutual election shall be conducted among directors to select an acting chairman.
4.The Secretariat Office deals with affairs for the Board of Directors’ meetings. The Secretariat Office shall draft the agenda of the Board meetings, and provide sufficient meeting materials, to be sent together with the notice of meeting.
5.The Company shall convene a Board of Directors meeting at least once a quarter. Reasons for convening a Board meeting shall be clearly defined, and the directors and supervisors shall be informed in writing or electronicallyof the date, place, agenda of the meeting, as well as relevant meeting materials seven days in advance. However, a meeting may be convened from time to time in case of emergency by means of written notice or in electronic form.
Items listed in Paragraph 1 of Point 8 of these Rules shall be specified as reasons for convening a meeting, but shall not be raised as extemporaneous proposals or motions, except in emergency or with a valid reason.
If directors find the meeting materials insufficient, they may request supplements from the Secretariat. If the supplementary materials are still insufficient, deliberation of the relevant motion may be postponed based on the Board’s resolution.
For meetings postponed or continued on a specific date as decided by the Board of Directors, with unchanged agenda, the provision in Paragraph 1 does not apply.
6.The Board of Directors meetings shall be carried out in the location of the Company’s head office or Taipei representative office, or other locations convenient to the directors and suitable for Board meetings. Meetings shall start no earlier than 9:00 a.m. or later than 8:00 p.m.
7.Agenda of regular Board of Directors meetings shall at least include the following:
(1) Minutes of last meeting:
Consult the present directors and attending supervisors for any objection to the minutes of the last Board meeting. When there are objections, which the chairman believes are grounded, correction or supplementary note should be made. Invalid objection shall also be recorded in the minutes of the Board meeting.
(2) Report items:
1. Report on the execution status of resolutions in the last meeting
2. Important financial reports
3. Internal audit reports
4. Other important report items
(3) Discussion items:
1. Issues outstanding from last meeting
2. Issues to be discussed in this meeting
(4) Extemporaneous motion
8.The following issue shall be raised in the Board of Directors meeting for discussion:
(1) Business plan of the Company
(2) Annual financial reports and semi-annual financial reports
(3) Formulation or amendment of internal control systems pursuant to Article 14-1 of the Securities and Exchange Act
(4) Formulation or amendment of the procedures for handling major financial behaviors such as acquisition or disposal of assets, engagement in derivatives transaction, lending of capital to others, endorsement or provision of guarantees for others, pursuant to Article 36-1 of the Securities and Exchange Act
(5) Offering, issuance or private placement of securities that involve shareholding
(6) Appointment and dismissal of the heads of finance, accounting or internal audit
(7) Appointment, dismissal or remuneration of the CPA
(8) Recommendations submitted by the Remuneration Committee
(9) Other issues that should be decided in the shareholders’ meeting or raised in the Board of Directors meeting pursuant to Article 14-3 of the Securities and Exchange Act, other laws or the articles of incorporation, and major issues specified by the competent authority
Any objection or reservation of the present directors shall be recorded in the minutes of the Board meeting. The independent directors shall present in person or designate another independent director as substitute to present in the meeting for matters that should be decided in the Board of Directors meeting as specified in Article 14-3 of the Securities and Exchange Act. If an independent director could not attend the Board meeting in person to express his/her objection or reservation,a written comment shall be submitted in advance, and be recorded in the minutes of the Board meeting, unless with a valid reason.
Issues listed in Paragraph 1 shall be specified as reasons for convening a meeting, but shall not be raised as extemporaneous motions, except in emergency or with a valid reason.
9.The Company may ask managers, department heads or undertaking officers of relevant departments who are not directors to attend the Board meeting for making report or answering questions, depending on the content of discussion.
The chairman may also designate or invite experts in technology, business administration, finance, accounting and laws, etc. or related parties to attend the Board meeting for answering questions when necessary.
Supervisors may attend the Board meeting to raise questions and state their opinions, but should not vote.
The chairman may ask persons in Paragraphs 1 and 2 to enter and exit the meeting at any time.
10.When a Board of Directors meeting is convened, the present directors, attending supervisors, and all persons listed in Paragraph 1 of Point 9 of these Rules shall sign in on the attendance book.
11.Directors shall attend the Board meeting in person. When a director is unable to attend a meeting in person, he/she may designate another director to be his/her representative pursuant to the articles of incorporation. An independent director who is unable to attend a meeting in person concerning issues that should be raised in the Board meeting specified in Article 14-3 of the Securities and Exchange Act may only designate another independent director as a representative.
The representative as mentioned in the previous paragraph may represent one person only.
When designating another director as representative to attend the Board meeting, a director should produce a letter of authorization in each occasion, and state clearly the scope of authorization concerning the reasons for which the meeting is convened.
Directors attending a meeting via video conferencing are considered present in person, but a sign-in sheet shall be faxed as substitute for attendance book.
12.Agenda of the Board meetings shall be drafted by the Secretariat Office, and then reviewed and approved by the chairman. Apart from the items included in the agenda, extemporaneous motions may also be included.
Proposals that are not listed in the agenda by the department concerned may be raised as extemporaneous proposals when approved by the chairman in case of emergency or with a valid reason. The proposal materials may be distributed during the meeting.
13.Chairman of the Board of Directors meeting shall declare commencement of the meeting when it is time for meeting and over half of the directors are present. When it is time for meeting, but over half of all directors have not shown up, the chairman may declare postponement of the meeting. Two postponements are allowed, and if present directors are still less than half after two postponements, the chairman may re-convene the meeting according to the procedure specified in Paragraph 1 of Point 5 of these Rules.
All directors as mentioned in the previous paragraph and Point 21 of these Rules refer to those actually serving in office.
14.The Board of Directors meeting shall proceed according to the scheduled agenda in the notice of meeting.
However, the agenda may be changed with the consent of over half of the present directors.
Time for the discussion of extemporaneous proposals or extemporaneous motions shall be after the discussion of all agenda items. However, the chairman may carry the extemporaneous motions to the next meeting for discussion with the consent of over half of the present directors.
The chairman are not entitled to announce dismissal of the meeting without the consent of over half of the present directors.
If less than half of the present directors are in seat during the meeting, the chairman shall announce suspension of the meeting at the proposal of the directors in seat, and the provision of Paragraph 1 of the previous article shall apply.
15.After a present director speaks, the chairman may reply by himself/herself or designate related personnel attending the meeting to provide a reply, or designate experts attending the meeting to give relevant and necessary information.
When directors are making repetitive speech concerning the same proposal, or are speaking outside the scope of the issue under discussion, and thus affecting other directors’ speech or disturbing the proceeding of the meeting, the chairman may stop them from speaking.
16.When the discussion of a proposal in the Board meeting has come to a conclusive extent, the chairman may stop the discussion and propose to take a vote.
Voting may be done in one of the following ways at the chairman’s choice:
(1) Show of hands or vote by voting machine
(2) Vote by roll call
(3) Vote by ballot
(4) A voting method at the Company’s choice
If there is no objection by all present directors upon the chairman’s inquiry, the motion is considered adopted. If there is any objection upon the chairman’s inquiry, one of the voting methods from the previous four subparagraphs shall be selected and used.
All present directors as mentioned in the previous paragraph do not include the directors who should not exercise their voting right pursuant to Paragraph 1 of Point 18 of these Rules.
17.For voting of a proposal, there shall be over half of the directors present in the meeting, and over half of the present directors voting for the proposal, unless otherwise stipulated by the Company Act, other laws, articles of incorporation, or in case of the following two conditions.
(1) When an Audit Committee is set up, the matters listed in Paragraph 1, Article 14-5 of the Securities and Exchange Act may be adopted with over two thirds of all directors’ consent if not agreed by over half of all members of the Audit Committee.
(2) In case of rejection or amendment of the Remuneration Committee’s recommendations, the Board of Directors shall have over two thirds of all directors present, and over half of the present directors' consent.
Results of the voting shall be reported on the spot, and shall be kept in record.
When there is an amendment or alternative to the original proposal, the chairman may set the priority of voting together with the original proposal. If any one of these proposals is adopted, the others are deemed rejected, and no voting is needed.
18.When directors have interest conflict concerning the agenda item, either personally or when representing a corporate body, they shall give a detailed account of their personal interest conflict in that Board meeting, but are not allowed to participate in discussion and to vote. These directors should also retreat when discussion and voting is in progress. They should not represent another director to exercise the voting right.
In the event where a director is not entitled to exercise his/her voting right, the Board of Directors shall make resolution according to Paragraph 2 of Article 180 when Paragraph 3 of Article 206 of the Company Act is applicable.
19.Ballot examiners or vote counters, when needed for the voting of a proposal, shall be designated by the chairman, but ballot examiners should be a director or supervisor.
20.Record keeper of the Board of Directors meeting shall be designated by the chairman.
21.Minutes shall be taken for the discussion in the Board of Directors meetings, which shall faithfully record the following in details:
(1) Number, time and location of the meeting
(2) Name of the chairman
(3) Attendance of directors, including the name of directors who are present, on leave and absent.
(4) Name and job title of people who attend the meeting as a non-voting member.
(5) Name of the record keeper
(6) Report items
(7) Discussion items:
1. the way by which the decision is made and the result for each proposal
2. summary of the speech of the directors, supervisors, experts and other persons; opinions of objection and reservation with record or written allegation, and written opinions of independent directors presented pursuant to Paragraph 2, Point 8 of these Rules.
3. For remuneration package adopted by the Board of Directors that is superior to the Committee’s recommendation, the difference between the two and reasons shall be detailed.
(8) Extemporaneous motions: Name of the proposer, the way by which the motion is decided and the result; summary of the speech of the directors, supervisors, experts and other persons; opinions of objection and reservation with record or written allegation.
(9) Other matters that should be recorded
When the Board of Directors is making resolution on one of the following issues, it shall not only be recorded in the minutes, but also be announced and declared on the Market Observation Post System specified by the Financial Supervisory Commission, Executive Yuan within two days from the date of the Board meeting:
(1) Objection or reservation of independent directors with record or written allegation.
(2) When an Audit Committee is set up, issues not approved by the Audit Committee, but adopted with the support of two-thirds of all directors or above.
(3) Remuneration package adopted by the Board of Directors which is superior to the Remuneration Committee’s recommendation.
Minutes shall be signed and sealed by the chairman and record keeper of the meeting, andbe filed in the Company’s important documentation, to be kept permanently and properly during the existence of the Company.
The attendance book of the Board meeting is part of the minutes, and shall be kept permanently.
The minutes as mentioned in Paragraph 1 may be prepared and distributed in electronic form.
22.The Company shall keep audio or video record of the whole session of the Board meetings for legal attestation. The record shall be kept for at least five years, which may be done in electronic form.
When litigation concerning resolutions made in a Board meeting arises before the end of the storage period as mentioned in the previous paragraph, the relevant audio or video record shall continue to be kept until the litigation ends.
For Board meetings carried out by means of video conference, the audio and video record of the meetings is part of the minutes, and shall be kept permanently during the existence of the Company.
23.When the Board of Directors meeting is in session, people other than those who should be present in or attending the meeting, the record keeper and other necessary assistants shall not enter the meeting venue.
24.Confidential proposals may be released upon dismissal of that meeting, except otherwise specified in the proposal or when the chairman announces the condition or time for release on the spot.
People who are present in or attending the Board meeting, the record keeper and other necessary assistants shall keep the confidential proposals not yet released and the discussion process, resolution content strictly secret.
25.Agenda and minutes of the Board of Directors meetings shall be submitted to the competent authority as stipulated by relevant regulations. Moreover, recipients of the agenda and minutes are restricted to the directors, supervisors, the Company’s personnel attending the whole session of the meeting, the record-keeper and government shareholders, and those who have gained the consent of the Board of Directors. Minutes shall be sent to the aforesaid recipients within 20 days after the meeting, and the recipients shall keep it properly and cautiously.
26.Apart from the matters that should be raised in the Company’s Board of Directors meeting for discussion pursuant to Paragraph 1 of Point 8 of these Rules, the Board of Directors shall authorize the exercise of the Board power pursuant to the laws or articles of incorporation, while the level, content and items of authorization are in accordance with the Company’s “Division of Rights and Responsibilities between the Board of Directors and Managers”.