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 December 18, 2023, 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" 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Material Internal Information", which stipulates that the Company prohibits insiders from trading in securities using unpublished information in the market, including that directors and insiders are not allowed to trade in their stocks during the closed period of 30 days prior to the announcement of the annual financial report and 15 days prior to the announcement of the quarterly financial report. Directors, managers and employees of the Company shall perform their duties in good faith and in accordance with the principles of good stewardship and fidelity, and shall sign a confidentiality agreement not to divulge any information that may have a material effect on the Company's stock price, and not to buy or sell the Company's securities on their own behalf or on behalf of another person, until such information has been made known to the public, or within eighteen (18) hours after it has become known to the public.
The implementation of the procedures in 2023 is as follows:
|
Date |
Target |
Course/Promotion |
Number of People |
Total Hours |
|
03/14/2023 |
Newly appointed Director |
When a new director takes office, the Corporate Governance Unit completes the dissemination of the Board of Directors and Supervisors Act and the securities market regulations that should be observed in order to facilitate compliance. |
1 |
- |
|
02/01/2023 04/20/2023 07/18/2023 10/19/2023 |
All Directors and internal personnel |
Using e-mails to reminder for Directors and insiders not to trade stocks during the 30 days prior to the financial report and 15 days prior to the quarterly financial report announcement, in order to avoid violating regulations. |
16 |
- |
|
10/17/2023 |
All employees |
E-mails - Promotion and Analysis of Internal Information Disclosure and Insider Trading |
544 |
- |
|
10/17/2023 |
Senior Executives |
In-house education and training - Course on Internal Major Information Disclosure and Insider Trading Regulations Analysis |
58 |
58 hours |
|
10/26/2023 |
Colleagues of corporate governance dedicated units |
Participating in Conference for Business Promotion of Listed Companies organized by the competent authorities |
2 |
7 hours |
|
11/03/2023 |
Directors and Senior Executives |
In-house education and training - Promotion of Internal Major Information Processing Procedure |
13 |
13 hours |
|
11/29/2023 |
Colleagues of corporate governance dedicated units |
Insider Trading Law Seminar on Compliance Promotion |
3 |
7.5 hours |
|
12/13/2023 |
Senior Executives |
In-house education and training - Protection and Management of Trade Secrets |
19 |
19 hours |
(I)The Company’s Corporate Governance Best-Practice Principles state that the composition of the board should take diversification into consideration.
The primary responsibility of our company's board of directors is the supervision, guidance, and assessment of the performance of the executive team, as well as the appointment and removal of executives. The composition of the board members is characterized by diverse backgrounds, encompassing rich experiences in corporate management or academia, all of whom adhere to exceptionally high ethical standards. Our company adheres to a "Candidate Nomination System," wherein all director candidates undergo a meticulous process of nomination and qualification review. Following approval by the board of directors, these candidates are presented to the shareholders' meeting for official appointment.
In accordance with our company's "Corporate Governance Best Practices, “The composition of the board of directors shall be determined by taking diversity into consideration. Apart from Directors concurrently serving as company executives shall not exceed one-third of the total number of the board members, the formulation of appropriate diversification policies takes into consideration the operational aspects, and business model, and developmental needs of the company. This includes, but is not limited to, the following two major criteria:
1. Basic requirements and values: Gender, age, nationality, culture, and ethnicity.
2. Professional Knowledge and Skills: Professional background, expertise, and industry experience.
All members of the board shall have the knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities:
1. Operational Judgment. 2. Accounting and Financial Analysis Proficiency.3. Business Management Competence.4. Crisis Management Aptitude. 5. Industry Knowledge. 6. International Market Insight. 7. Leadership Skills. 8. Decision-Making Ability.
The current board comprises eight members, all esteemed figures from both the industry and academia.
The specific management objectives and achievements of the diversity policy are as follows,
| Management objective | Achievement |
|---|---|
|
Independent director members not less than one-third. |
Achieved |
|
Less than one-third of directors concurrently serve as company executives |
Achieved |
|
At least one female director |
Achieved |
The implementation of the diversification policy for the composition of Board of directors is as follows(2023),
| Age | 40-50 | 50-60 | 60-70 | 70-80 | ||||
|---|---|---|---|---|---|---|---|---|
| Gender | Male | Female | Male | Female | Male | Female | Male | Female |
| Number of Board member | 1 | 0 | 3 | 1 | 1 | 0 | 2 | 0 |
| Ratio (by gender) | 12.5% | 0% | 37.5% | 12.5% | 12.5% | 0% | 25% | 0% |
| Ratio (by age) | 12.5% | 50.0% | 12.5% | 25.0% | ||||
(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. At least one internal performance evaluation is performed each year and the result is reported to the board of directors to be used as a reference for directors’ remuneration and candidate nomination.
The scope of the overall performance evaluation of the board of directors of the Company covers the following 5 aspects, with a total of 45 items evaluated:
I. Participation in the operation of the Company.
II. Improvement of the quality of the board of directors’ decision making.
III. Composition and structure of the board of directors.
IV. Election and continuing education of the directors.
V. Internal control.
The scope of the self-performance evaluation of the Company’s board members covers the following 6 aspects, with a total of 23 items evaluated:
I. Their grasp of the Company’s goals and missions.
II. Their recognition of duties of the functional committee.
III. Participation in the operation of the Company;
IV. Their management of internal relationships and communication.
V. Their management of internal relationships and communication.
VI. Internal control.
The scope of the performance evaluation of the Company’s functional committee covers the following 5 aspects, with a total of 26 items evaluated:
I. Participation in the operation of the Company.
II. Their recognition of the duties of the functional committee.
III. Improvement in the quality of decision making by the functional committee.
IV. The composition of the functional committee, and election and appointment of committee members.
V. Internal control.
The performance evaluation stated above was carried out and compiled by members of the board, members of the functional committee, and the stock affairs office before the end of 2023 Q1.
The evaluation was conducted using an internal questionnaire.
The result of the director performance evaluation stated above is provided to directors and is used as a reference basis for determining their remuneration as well as for nominating directors or selecting remuneration committee members.
The overall performance evaluation results for the 2022 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 performance evaluation result for the functional committee is excellent and that it is able to perform functions properly. It scored an average of 4.9 out of 5.
The members on the board in 2022 did not make any other suggestions. The aforementioned evaluation results were submitted to the board meeting held on March 13, 2023.
(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 and then submits the evaluation results to the Board of Directors. The latest evaluation was discussed and approved by the Audit Committee on January 16, 2023, and was submitted for approval by the Board of Directors on January 16, 2023.
I. The evaluation items for the independence of CPAs are as follows:
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.
As per Article 3-1 of the Company’s Corporate Governance Best-Practice Principles, the Company has designated the Service Office as the unit in charge of corporate governance affairs and has staffed it with qualified and an appropriate number of corporate governance personnel. As per the regulations on the appointment of the corporate governance executive, the Board of Directors has passed a resolution to appoint Lian Wei-Chung, Vice President and CFO, as the chief corporate governance officer to protect shareholders’ rights and interests and reinforce the board’s functions. He has held managerial positions in charge of the legal affairs, stock affairs, and corporate governance at publicly listed companies for more than three years. He is mainly responsible for business registration and matters associated with the convening of board meetings, meetings of the Audit Committee and the Remuneration Committee, and shareholders’ meetings, while assisting board members with taking office and continuing education, providing assistance to directors with compliance, and handling matters related to investor relations, to improve the effectiveness of corporate governance comprehensively. The implementation of corporate governance has been reported to the Company’s Board of Directors on March 16, 2022, and will be reported to the Board of Directors regularly every year.
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: Huang Pei-Ming, Acting spokesperson: Ma Shao-Heng; 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. The Company’s website also discloses relevant information on the investor conference.
(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
Our company is not only engaged in the production and manufacturing of optical films but also focuses on the research and innovation of optical films to provide customers with the necessary optical film solutions. In order to strengthen our competitiveness in the optical film industry, our company has formulated the following intellectual property management policy, aligned with operational objectives:
1.Enhance employees' expertise in intellectual property rights.
2.Strengthen intellectual property management systems.
3.Accumulate research and development capabilities.
4.Enhance brand value.
Intellectual Property Management Goals
1.Conduct at least one intellectual property education and training session for new employees and intellectual property personnel each year.
2.Achieve TIPS (Technology and Intellectual Property Services) Level A certification by the year 2024.
3.Apply for a minimum of two patents by the year 2024.
4.Complete an inventory of domestic and international trademarks by the year 2024.
Intellectual Property Achievements
1. Submitted a total of 5 patent applications from 2022 to 2023 (with another 5 technologies under internal review). 2 More patent applications are still in progress with 18 patents being granted so far.
2. Registered for 27 trademarks (one is under review).
Implementation status
The Company regularly reports matters related to intellectual property to the Board of Directors each year, with the most recent report being submitted on Dec 18, 2023.
