2023 Board Composition

Duh, Jia-Bin

Pan, Yung-Tai

Pan, Yung-Chung

Cheng, Chih-Kai

Wu, Chun-Pang

Wang, Jia-Chyi

Shen, Ying-Chuan

Aduit Committee Roles

● For detailed organizational regulations and attendance at meetings, please refer to the Audit Committee Charter and the MOPS website

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Remuneration Committee Roles

Nomination Committee Roles

Risk Management Committee Roles

Diversification of The Board members

Board members at Primax Electronics are chosen through nomination and elected by all shareholders in a transparent, electronic voting session. All members possess the necessary abilities, knowledge, and experience to exercise their powers and responsibilities. All directors consider long-term interests of the  Company' and shareholders' to be their top priority, and formulate their strategies in an objective manner. The Primax Board is convened at least once a quarter. Ten Board meetings were convened during 2022 and the average attendance rate for all directors was 100%.

Board diversity is important to Primax and phased targets have been set: The number of women or foreigners sitting on the Board must exceed 10% by 2021 (completed), exceed 20% between 2024 and 2027, and exceed 30% between 2030 and 2033.

Eight people sat on the Primax Board in 2022 including four independent directors (50%). Two of the independent directors have been in the position for fewer than 3 years, and one independent director has been in position for 3 to 9 years. There were seven male directors (87.5%) and one female director (12.5%) on the board. Two directors were aged between 71 and 80 years of age (25%), five were aged between 61 to 70 years of age (62.5%), and one was aged between 51 and 60 years of age (12.5%). Board directors, therefore, come from different age groups and generational change is gradually taking place.

In terms of the professional backgrounds of the directors: eight had experience in the industry and management (100%), two had experience in R&D (12.5%), four had backgrounds in marketing (50%), and three had financial experience (37.5%). In terms of the professional knowledge and skills required for directors, eight possessed the necessary knowledge and skills for leadership, decision-making, operations, and management (100%); seven of them had knowledge and skills of risk management (87.5%); three had an IT background (37.5%); five had financial and accounting backgrounds (62.5%), and one had legal knowledge and skills (12.5%).

Continuing education of directors

To improve the performance of board members, training courses are arranged by the Company in accordance with "Primax Electronics Corporate Governance Principles", "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies", and other relevant regulations on the latest domestic and overseas developments in economic, environmental and social governance. Topics included finance, risk management, business, commerce, accounting, law, corporate governance, integrity, ethics, and corporate social responsibility. These training courses help board members maintain their values, professionalism and capabilities. The 8 Primax directors attended 51 hours of continuing in education during 2020 and complied with the requirements set by“Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.”Re-elected directors were required to complete at least 6 hours of training during their term, while newly-elected directors were required to complete at least 12 hours. Please refer to the table below for further details on the continuing education of directors during 2020.

Directors' remuneration

A Compensation Committee has been created directly under the board of directors in accordance with the "Primax Electronics Compensation Committee Charter" to review remuneration policies, systems, standards and structures, and to approve and evaluate performance targets for all directors, executives, and managers. None of the committee members have undertaken this role within concurrent Company service.

The remunerations of directors include rewards and compensations. The Company Articles of Association stipulate that should the Company make a profit, no more than 2% of it shall be used as rewards for the directors. This is subject to discussion by the Compensation Committee, resolution of the Board, as well as by presentation to a Meeting of the shareholders. Reasonable rewards are decided by reference to operation performance, contribution to such performance, and the outcome of appraisal by the Board. The Chairman’s remuneration is proposed by the HR Department after a consideration of the competitive environment, the operational risks on the basis of management regulations, and a bonus plan assessment. The Compensation Committee makes a proposal after an assessment of performance which is then submitted to the board for approval. The relevant appraisals and reasonableness of compensations are reviewed by the Compensation Committee and the Board. The remuneration system is subject to review based on the actual operation and relevant laws and regulations.

The Compensation Committee, which has been created directly under the board of directors in accordance with "Primax Electronics Compensation Committee Charter", reviews the remuneration policies, systems, standards and structures, and approves and evaluates performance targets for all directors, executives, and managers. None of the committee members have undertaken this role while concurrently serving with the company.

Directors' remuneration is paid according to the Company Articles of Incorporation. The remuneration of Executives and managers is a combination of fixed salary, a year-end bonus, and variable bonuses that are determined based on yearly performance results. Fixed salaries are set at a level deemed competitive within the industry, whereas variable bonuses are calculated at the beginning of each year based on a number of factors including the overall business environment, company growth, performance targets and weights, and how these targets are accomplished. These sums are reviewed by the Compensation Committee and are subject to approval by the board of directors. The Company may issue stock options, restricted shares or use other incentives of material effect to retain managers who exhibit long-term potential. These incentives are also reviewed by the Compensation Committee and are subject to approval by the board of directors.

Performance Evaluation for Board of Directors

The Board of Directors undergoes a performance evaluation each December in accordance with the Primax "Rules for Performance Evaluation of the Board of Directors." An external evaluation of Board performance must also be conducted once every three years. According to the aforementioned rules, the performance evaluation should cover the following areas at a minimum:

Outcome of the evaluation is rated using a 5-grade scale. Results of the evaluations are also reported to the BOD for review and improvement.

Grade Description

Performance evaluations are conducted by Primax for the entire Board, individual Board members, and functional committees (Audit and Compensation) in accordance with the aforementioned rules and scope of evaluation. Evaluations take the form of internal self-assessment by the Board, self-assessment by Board members, and performance evaluations conducted by external bodies, experts or other means as appropriate.

Internal performance evaluation for the 2020 Board of Directors was completed at the end of 2020 in accordance with the rules. The evaluation of the Finance and Administration Department was conducted in questionnaire format. Performance evaluations of the Board, the Board members, and of the Audit and Compensation Committees all produced outcomes ranging from Good to Excellent. The average scores given by directors for each questionnaire ranged from 4.96 (Agree) to 5 (Strongly agree). The Directors concluded that the Primax Board and its functional committees were working smoothly and effectively.

The most recent external evaluation of Board performance was conducted in 2020 by KPMG Taiwan which satisfies the criteria for an external evaluation institution as defined in Article 7 of the “Sample Template of "Self-Evaluation or Peer Evaluation of the Board of Directors of XX Co Ltd." Services provided by KPMG Taiwan include education and training courses for company boards, the improvement of corporate governance, risk management, internal controls and audits. The KPMG evaluation team has all the necessary independence and professionalism.

KPMG completed the assessment in December 2020, using domestic and international tools to carry out an evaluation of best practices. This took three forms: data analysis, questionnaires, and interviews. The areas assessed, including individual aspects, are listed below:

The outcome of the 2020 external evaluation of general Board performance:

Polices and processes have been put into place for the Board as a whole and for individual directors in accordance with the relevant laws and domestic corporate governance indicators. Board directors possess the relevant qualifications and ability, and there is appropriate division of labor to ensure the effective function of the Board and functional committees (Audit and Compensation Committees). Overall performance was found to range from Good to Excellent.

Recommendations and future improvements derived from the 2020 external performance evaluation of the Primax Board of Directors:

The general outcome of all the internal and external performance evaluations were reported to the Board on January 22, 2021. Please refer to the 2020 Annual Report for further details.

The Company "Rules for Performance Evaluation of the Board of Directors"

The avoidance of conflicts of interest

The Company has implemented a "Corporate Governance Code of Conduct" and "Business Integrity Procedures and Behavioral Guidelines." These clearly state, that should a director, manager, board meeting participant, or any of the corporate entities represented by them, be a stakeholder in a matter under discussion at a board meeting, the party must make this fact known to the meeting, disclose the stakes involved, and shall disassociate themselves from all discussions and voting in conflict with the interests of the company. Furthermore, the concerned party may not exercise proxy voting rights on behalf of any other directors. All Company directors are highly disciplined in their conduct and have always managed to disassociate themselves from agendas that present conflicts of interest. For more disclosures regarding avoidance of such conflict by the highest governance body, please refer to the corporate governance chapter on "Page 22 of the 2021 Annual General Meeting Report."