In accordance with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, the Company established its Corporate Governance Best-Practice Principles on May 12, 2011, which was amended after a resolution was adopted by the Board of Directors on November 4, 2024, with disclosure announced on the Company’s website and MOPS.
(I) Has the Company established internal procedures to handle shareholders’ suggestions, doubts, disputes, and litigation matters; and have the procedures been implemented accordingly?
The Company has set up the "Whistle-blower Reporting and Protection Procedures" to handle matters concerning shareholders’ rights, interests, and disputes. Moreover, the Company has also set up a shareholder service unit to provide shareholder services, as well as a legal affairs unit to handle disputes and litigation matters in accordance with applicable procedures.
(II)Does the Company possess the list of the Company’s principal shareholders and the list of the ultimate controllers of the major shareholders?
Yes. The Company regularly keeps abreast of the list of the Company’s principal shareholders and the list of the ultimate controllers of the major shareholders.
(III)Has the Company established and implemented risk management and firewall mechanisms between related companies?
The Company has established the "Procedure for Transactions between Enterprise Groups, Specified Companies and Related Parties" and "Financial and Business Operations Guidelines for Stakeholder Relations" to govern the Company’s financial and business transactions between enterprise groups, specified companies and related parties to safeguard the Company’s interests, while protecting its shareholders.
(IV) Has the Company established internal regulations prohibiting insiders from trading securities based on undisclosed information in the market?
CMMT has established the "Procedures for Handling Material inside Information", explicitly stating that directors, managers, and employees of the company should conduct their business with the care of a prudent manager and a fiduciary duty. They are required to execute business operations in accordance with the principles of honesty and credibility, and to sign confidentiality agreements. Regarding information that has a significant impact on the company's stock price, upon the explicit disclosure of such information, individuals are prohibited from disclosing it publicly within eighteen hours. Moreover, they are not allowed to buy or sell the company's securities either personally or on behalf of others; The "Corporate Governance Best Practice Principles" specify that insider trading using undisclosed information in the market is prohibited. This includes trading by insiders based on the company's financial reports or related performance content, subject to control measures on stock transactions starting from the day of acquiring such information. These measures include (but are not limited to) directors refraining from trading their stocks during the thirty days prior to the announcement of the annual financial report and the fifteen days before the announcement of each quarterly financial report.
The implementation status for the year 2024 is as follows:
|
Date |
Target |
Course/Promotion |
Number of People |
Total Hours |
| 2024.06.07 | New Directors | Upon appointment, the corporate governance unit conducted a session on regulations for directors and supervisors, and securities market rules to ensure compliance. |
9 |
- |
|
2024.06.27 |
All Directors and Insiders | Email reminder promoting the prohibition of trading stocks during the closed periods of 30 days before the annual financial report and 15 days before the quarterly financial report announcement, to avoid violating regulations. |
14 |
- |
|
2024.10.18 |
Corporate Governance Team Members | 2023 Insider Trading Prevention Awareness Session |
2 |
6 hours |
|
2024.10.25 |
Corporate Governance Team Members | Attended a business promotion session organized by the competent authority for listed companies |
2 |
8 hours |
|
2024.11.08 |
Senior Management | Internal training session on the handling of material information and insider trading regulations |
70 |
70 hours |
|
2024.11.08 |
Senior Management | Course on the protection and management of trade secrets |
33 |
33 hours |
|
2024.11.22 |
All Employees |
Email - Promotion on the disclosure of internal major information and insider trading regulations analysis |
577 |
- |
The relevant course presentations are uploaded to the company's internal website after each session, providing employees with easy access for reference at any time. This effectively promotes the prevention of insider trading through education and training, actively implementing measures to prevent insider trading, emphasizing integrity, honesty, and ethical values, strengthening corporate governance and risk management, and fostering a culture of integrity to support comprehensive business operations.
In the fiscal year 2024, the company conducted education and promotion for a total of 694 individuals, including current directors, managers, and all employees.
(I) The current Board members of the Company come from diverse backgrounds, consisting of industry professionals, management experts, and academic specialists, all of whom maintain high ethical standards commensurate with their duties and powers.
The Board of Directors’ duties are to oversee, setting specific management objectives, providing guidance to the management, and assess the performance of the management team. The Board also wield the power to decides the best composition of the management team. The Company’s “Corporate Governance Practice Principles” with which the company complied requires directors who simultaneously serve as members of management team to be no more than one-third of the total board seats. The company should formulate appropriate diversity guidelines based on its operations, business model, and development needs, including but is not limited to the following two major aspects:
1. Basic conditions and values: gender, age, nationality, culture, and ethnicity.
2. Professional knowledge and skills: professional background, expertise, and industry experience.
Maintaining the diversity of the Board members is crucial to good corporate governance. Therefore, the Company endorses “Candidate Nomination System,” where all director candidates undergo nomination and qualification review by a regulated Nomination Committee before submitting to the shareholder meeting for election. In addition, the Company sets the objectives for managing Board diversity and engaging in annual review of the objectives set.
The specific management objectives and achievements of the diversity policy are as follows,
|
Item |
Management Objective |
Achievements |
|
Professional Skills |
Including Technology Industry, Financial & Accounting, Financial Investment, Corporate Sustainability, Legal Profession |
Achieved |
|
Composition of Seats |
Independent director seats account for one-third of all board seats. |
Achieved |
|
Gender |
At least two seats of Directors are different gender. |
Achieved |
|
Term of Service |
The independent directors shall not hold office for more than 3 terms. |
Achieved |
|
Concurrently Situation
|
Concurrently serve as the managers of the Company should not exceed one-third of the board seats. |
Achieved |
| No Independence Director serve as director (including independence director) or supervisor more than five other TWSE/ TPEx listed companies at the same time. |
Achieved |
Implementation of Board Member Diversity in 2024
|
Title |
Name |
Industry Experience |
Professional Expertise |
||||
|
Industry Knowledge |
Business Management |
Finance & Accounting |
Financial Investment |
Legal |
Corporate Sustainability |
||
|
Chairperson |
Yen-Yi Sung |
V |
V |
||||
|
Director |
Wei-Chung Lian |
V |
V |
V |
V |
||
|
Director |
Chiang-Huang Huang |
V |
V |
V |
|||
|
Director |
Jason C Kan |
V |
V |
V |
|||
|
Director |
Hui-Yu Lin |
V |
V |
||||
|
Director |
Zhi-Zhen Lin |
V |
|||||
|
Independent Director |
Yi-Zhang Lin |
V |
V |
V |
|||
|
Independent Director |
Heng-Zhen Ho |
V |
|||||
|
Independent Director |
Yi-Liang Chen |
V |
V |
||||
|
Title |
Name |
Gender |
Age |
Concurrent Management Position |
Independent Director's Concurrent Positions as Director (Including Independent Director) or Supervisor in Other Listed/OTC Companies |
Independent Director Tenure |
|
|
Below 3 years |
3-9 years |
||||||
|
Chairperson |
Yen-Yi Sung |
Female |
51~60 |
V |
|||
|
Director |
Wei-Chung Lian |
Male |
51~60 |
|
|||
|
Director |
Chiang-Huang Huang |
Male |
51~60 | ||||
|
Director |
Jason C Kan |
Male |
51~60 | ||||
| Director |
Hui-Yu Lin |
Male |
51~60 | ||||
|
Director |
Zhi-Zhen Lin |
Male |
41-50 |
||||
|
Independent Director |
Yi-Zhang Lin |
Male |
61~70 |
2 |
V |
||
|
Independent Director |
Heng-Zhen Ho |
Female |
41~50 |
0 |
V |
||
|
Independent Director |
Yi-Liang Chen |
Male |
41~50 |
2 |
V |
||
(II) Apart from the Remuneration Committee and Audit Committee, has the Company assembled other functional committees at its own discretion?
Apart from the Remuneration Committee and Audit Committee, the Company established the Sustainable Development Committee upon approval by the Board of Directors on December 30, 2022.
(III) Has the Company established the Regulations Governing the Board Performance Evaluation and its evaluation methods, and does the Company perform a regular performance evaluation each year and submit the results of performance evaluations to the board of directors and use them as reference in determining compensation for individual directors, their nomination, and additional office terms?
The Company passed the formulation of the Regulations Governing the Board Performance Evaluation on January 29,2021, and will carry out an evaluation on Q4 of each year. An evaluation should also be conducted at least once every three years by an external independent organization or team of experts and scholars. Performance evaluation results shall be submitted to the Board of Directors for consideration in determining director compensation and reappointment. The overall performance evaluation of the Board of Directors of the Company covers the following 5 aspects:
I. Participation in Company Operations.
II. Improvement of Board Decision-making Quality. III. Composition and Structure of the Board of Directors.
IV. Election and Continuing Education of Directors.
V. Internal Control. The self-assessment of the Company's Board members covers the following six areas:
I. IUnderstanding of Company Goals and Missions.
II. Awareness of Director Responsibilities.
III. Participation in Company Operations.
IV. Internal Relationship Management and Communication.
V. Professionalism and Continuing Education of Directors.
VI. Internal Control.
The Board of Directors and functional committees of the Company commissioned external professional independent organization Taiwan Institute of Ethical Business to conduct performance evaluation for 2023 through questionnaires, director interviews, and written review of internal regulations and records in December 2023. The Taiwan Institute of Integrity and Management (TIOM) designed the evaluation questionnaire and process based on the guidelines of Taiwan's Code of Governance and relevant laws and regulations, and the research published by The Institute of Internal Auditors Research Foundation (IIAF) on the effectiveness of the board of directors and the effectiveness of the audit committee. We designed the evaluation questionnaire and process to observe the effectiveness of corporate board operations in terms of how the board of directors grasps the company's operating conditions, how it communicates with shareholders, how it manages corporate risks and crises, how it verifies the implementation of the company's internal control and audit systems, and how it evaluates the management of the company's sustainable operations. The members of the Executive Board responsible for evaluating the effectiveness of the Board of Directors are all qualified as lecturers or above from public and private colleges and universities in finance, accounting, or law-related disciplines, and are scholars and experts with a long-term interest in corporate governance, have no business dealings with the Company, and are independent. The results of the Directors' performance evaluation were reported to the Board of Directors on December 18, 2023. Conclusion of the performance evaluation of the Board of Directors and functional committees by an external professional independent organization for 2023: Board of Directors:
I. Board of Directors' Professional Functions (Board Composition, Structure, Appointment, and the Continuing Education of Directors): Members of the Board of Directors who are not Independent Directors are mainly representatives of corporate shareholders. The Board of Directors is diverse, with backgrounds covering industries, business management, financial accounting, law, and environmental engineering, providing various opinions from diversified perspectives.
II. Board of Directors' Decision-making Effectiveness (Degree of Participation in Company Operations, Improvement of Decision-making Quality): All Board members expressed that there were ample opportunities for discussion during meetings, and all decisions were made based on thorough deliberation. The participation of Board members in company operations and effectiveness of Board decision-making were deemed sufficient.
III. Board of Directors' Supervision of the Company's Internal Controls: Although there is no dedicated risk management organization, the overall organizational structure is detailed, and the operational departments report risks faced at each level, which is conducive to the supervision of internal controls by the Board of Directors.
IV. Attitude towards Corporate Social Responsibility: There is a Sustainable Development Committee and specialized task forces for different issues. In the future, the Company will place focus on enhancing the functions of the committee, furthering the implementation of corporate social responsibility, and pursuing sustainable business goals. Audit Committee: Independent Directors can obtain sufficient information on motion content and maintain close communication with auditors of the evaluated company, which is beneficial for the evaluated company in strengthening the implementation of its internal control system. Remuneration Committee: Independent Directors can obtain sufficient information and engage in thorough discussions during meetings, enabling them to make appropriate decisions and evaluations regarding compensation strategies. Suggestions and matters to be improved of the Board of Directors and functional committees as noted by an external professional independent organization for 2023:
Board of Directors:
I. Strengthen the recording of Directors' remarks in the Board meeting minutes. Improvement status: The company will strengthen documentation based on actual meeting progressions.
II. Optimize the selection of Board meeting dates and provide ample time and comprehensive information for Directors and functional committee members to review meeting materials. Improvement status: The Company has already scheduled the 2024 annual meeting at the end of 2023 and ensured that meeting materials are adequately prepared for review.
III. If a candidate is to be nominated to be an Independent Director for more than three terms, it is necessary to improve the disclosure of nomination reasons. Improvement status: Should relevant circumstances arise, the Company will enhance disclosure in accordance with relevant regulations.
IV. Establish a concrete talent pool. Improvement status: The Company will address the issue with appropriate measures.
V. Increase the number of issues regarding sustainable development that are discussed at Board meetings. Improvement status: The Company established the Sustainable Development Committee in December 2022, and will actively promote sustainability issues and report on them during Board meetings. Audit Committee: None. Remuneration Committee: The Remuneration Committee may consider seeking professional consultants to assist in formulating compensation performance indicators, in order to balance the effects of talent retention and operating costs. Improvement status: The Company shall follow the guidelines set by professional consultants. 2023 internal Board performance evaluation was carried out and compiled by members of the board and the stock affairs office before the end of 2024 Q1. The evaluation was conducted using an internal questionnaire.
The overall performance evaluation results for the 2023 Board of Directors was excellent, and the board was able to perform its functions properly. It scored an average of 4.7 out of 5. The members on the board in 2023 did not make any other suggestions.
The assessment of the Company's Functional Committees covers the following five areas with 26 items:
I. Participation in Company Operations.
II. Awareness of Functional Committee Responsibilities. III. Enhancement of Functional Committee Decision-making Quality.
IV. Composition and Member Selection of Functional Committees.
V. Internal Control. The internal performance evaluation of the Company's Functional Committee for 2023 was performed and compiled by members of the Audit Committee and the Compensation Committee and the Stock Office prior to the end of the fourth quarter of 2023.
The assessment was conducted by means of an internal questionnaire. The performance evaluation of the Audit Committee for 2023 was excellent with an average score of 4.97 out of 5, indicating that the functions of the Committee were properly performed. There were no other matters raised by the Audit Committee. The performance evaluation of the Compensation Committee for 2023 was excellent with an average score of 4.85 out of 5, indicating that the functions of the Committee were properly performed. Some of the Remuneration Committee members suggested that more information could have been provided for the meeting. The results of the above appraisal were presented to the Board of Directors of the Company on December 18, 2023 for their report.
(IV) Is an external auditor’s independence assessed by the Company on a regular basis?
The Audit Committee of the Company evaluates the professionalism and independence of the CPAs once a year then submits the evaluation results to the Board of Directors. The latest evaluation was discussed and approved by the Audit Committee on January 29, 2024, and was submitted for approval by the Board of Directors on January 29, 2024.
I. None of the following matters were evaluated: 1. Whether the CPA has a direct or significant indirect financial interest relationship with the Company.
2. Whether the CPA engages in any financing or guarantee for the Company or its Directors.
3. Whether the CPA has a close business relationship and potential employment relationship with the Company.
4. Whether the CPA or their audit team members have served as Directors, Supervisors, or Managers at the Company or held a position with a significant influence on the Company’s audit case currently or within the last two years.
5. Whether the CPA has provided the Company with non-audit services that may directly affect the audit work.
6. Whether the CPA has served as a broker for the shares or other securities issued by the Company
7. Whether the CPA has acted as the Company’s defender or represented the Company in coordinating conflicts with other third parties.
8. Whether the CPA is a relative of any Director or Manager of the Company or a person with a significant influence on the audit work.
II. Whether the independence and suitability of the certified public accountants are assessed based on audit quality indicators (AQIs): Yes.
Based on the AQIs indicator information, it is confirmed that the audit experience, training hours, and the proportion of audit personnel in the professional audit department of the certified public accountant are all better than the industry average; In order to improve audit quality, the firm is continuously committed to digital transformation work and has established digital strategies and goals to import relevant system tools.
Evaluation result: The CPAs have passed the Company’s independent evaluation criteria.
In accordance with Article 3-1 of the Company’s "Corporate Governance Best Practice Principles," the Company has designated the "Investor Relations and Stock Affairs Office" as the unit responsible for corporate governance-related matters and has assigned an adequate number of competent personnel as corporate governance officers. Pursuant to the regulations on the appointment of a corporate governance officer, the Company’s Board of Directors has resolved to appoint Chi-Hsun Lin of the Investor Relations and Stock Affairs Office as the corporate governance officer to safeguard shareholders' rights and enhance the functions of the Board of Directors. He possesses more than three years of experience as a supervisor in units responsible for legal affairs, stock affairs, and corporate governance-related matters in publicly listed companies.
His primary responsibilities include: handling company registration matters; organizing and conducting Board of Directors meetings, Audit Committee meetings, Compensation Committee meetings, and shareholders’ meetings in accordance with the law; assisting directors with onboarding and ongoing training; providing directors with the necessary information to perform their duties; assisting directors in complying with relevant regulations; and managing investor relations to comprehensively and effectively improve corporate governance efficiency.
The implementation of corporate governance was reported to the Company’s Board of Directors on January 29, 2024, and will be regularly reported to the Board of Directors on an annual basis.
The Company has established communication channels with its stakeholders and responds accordingly to its stakeholders regarding important issues of their concern. There is a section on the Company’s website (www.cmmt.com.tw) dedicated to stakeholders. The website contains information on the major contact persons and communication channels: Spokesperson: Carol Lin, Acting spokesperson: George Yang; contact number: 06-5889988; and email: cmmt_ir@cmmt.com.tw. Please contact the contact persons for detailed contact information.
The Company has appointed a professional shareholders service agent to process the affairs related to shareholders’ meetings :
Stock Transfer Agency Department, Capital Securities Corp.
(I) Does the Company have a website set up and disclosed financial business and corporate governance information?
The Company discloses its financial and corporate governance information on the website (www.cmmt.com.tw).
(II)Has the company adopted other information disclosure methods (such as, establishing an English website, designating a responsible person for collecting and disclosing information of the Company, substantiating the spokesman system, placing the juristic person seminar program on the Company’s website, etc.)?
The Company has an official website in English to disclose financial, business, and corporate governance information. The Company has established a spokesperson, and a stock affairs department responsible to disclose relevant information in accordance with the regulations.
(III) Has the Company published and reported its annual financial report within two months after the end of a fiscal year, and published and reported its financial reports for the first, second, and third quarters, as well as its operating status for each month before the specified deadline.
The Company announces its financial report within 75 days after the end of an accounting year and publishes its operational information on time.
Intellectual Property Management Policy
The Company is not only engaged in the production of optical films, but also focuses on the research and development of optical films to provide customers with the required optical film solutions. In order to strengthen the Company's competitiveness in the optical film industry, the Company has formulated an intellectual property management policy in line with its operational objectives as shown below:
1. Accumulate R&D capabilities
2.Implement confidentiality management
3.Implement intellectual property management system
4. Enhance employee awareness of IP protection and IP professional capabilities
Intellectual Property Management Objectives
1. Apply for at least 2 patents in 2025
2. Apply for at least 1 trademark in 2025
3. Improve R&D record management system
4. Implement confidential document management measures
5. Pass the 2025 TIPS(A) level re-verification
6. Hold at least one educational training session for responsible personnel in authorized units
7. Hold at least one educational training session for responsible personnel annually
8. Include IP courses in new employee training
9. Include IP education and training in annual training plans
Intellectual Property Results
1.Passed the TIPS (A) level certification in 2024
2.Existing patents:
Taiwan: 6 invention patents, 6 utility model patents
China: 2 invention patents, 5 utility model patents
Pending patent applications:
Taiwan: 5 invention patents, 1 utility model patent
China: 1 invention patent, 1 utility model patent
Among these, 7 patents were applied for in 2024.
3.Existing trademarks:
Taiwan trademarks: 15
China trademarks: 12
Implementation status
The Company is on a regular annual schedule to report to the Board of Directors on matters related to Intellectual Property, with the most recent date of December 9, 2024.
(1) Succession Planning for the Board of Directors.
The Company’s "Articles of Incorporation" stipulate that the election of directors fully adopts a candidate nomination system. Candidates may be nominated by the Board of Directors or shareholders holding 1% or more of the Company's shares. Prior to nomination, both the Board of Directors and shareholders consider the professional background and skills of potential directors and refer to the results of director performance evaluations to plan for director succession and selection. The "Corporate Governance Best Practice Principles" and the "Director Election Procedures" specify that the composition of the Board of Directors should consider diversity. Based on the Company's operations, business model, and developmental needs, diversity guidelines are established, focusing on two major aspects: fundamental qualifications and values, as well as professional knowledge and skills. The selection of the Chairman is conducted through a comprehensive evaluation of qualifications and relevant experience to ensure the candidate meets the Company's operational needs and is capable of taking on significant responsibilities. The principle of meritocracy, ensuring the right person is in the right role, serves as the highest guideline for Chairman succession planning. The same principle applies to the appointment of the President. The Company also arranges for key management personnel to serve as Board members, allowing them to become familiar with Board operations and participate in the long-term strategic planning and vision-setting of the Company and its investment ventures. In addition, the Company periodically reviews changes in internal and external environmental conditions and developmental needs to plan annual training programs. These programs aim to enhance the professional knowledge of newly appointed or reappointed directors and strengthen Board functionality. Details of director training programs can be found in the Board Training section (Sustainability Report, page 20).
(2) Talent Development Strategy
1. Development Mechanism for Key Management Personnel:
The Human Resources Department establishes a development mechanism for key management personnel. Potential talent is reviewed annually, and a development plan focused on practical experience is created (Talent Management Mechanism).
2. Review of Key Position Talent: For each key position, at least two candidates are identified, with their readiness for succession categorized into two groups: immediate to within one year and one to three years (Key Talent Pipeline).
3. On-the-Job Learning: Through the assignment of deputy managerial roles, potential talent is given responsibilities for higher-level duties to develop broader perspectives and decision-making capabilities (Acting System).
4. Job Rotation Program: Key management personnel are required to undergo cross-functional job rotations to evaluate their adaptability, effectiveness, and leadership potential across functions (Job Rotation).
5. Management Competence Training Program:
Core Competence Training: Quarterly seminars are held on topics such as digital transformation, innovation management, new business models, corporate governance, and legal compliance, expanding managers' operational perspectives and strategic thinking.
Competence Training by Management Level:
(a) President and Division-Level Managers: Courses on vision leadership, business decision-making, and corporate governance, with one theme selected annually.
(b) Senior Managers: Courses on strategy formulation and implementation, change management, and coaching inspiration, with one theme selected annually.
(c) Mid-Level Managers: Courses on influencing others, employee guidance, leading teams to success, and performance improvement; mandatory courses for newly appointed mid-level managers.
