Company Governance

Chien Kuo Construction operates on the basis of honesty and integrity. The company values shareholders’ rights and interests and believes a sound and efficient board of directors is the foundation of good corporate governance. In the spirit of this principle, the Chien Kuo Construction board of directors authorized the establishment of divers committees, which assist the board in the execution of its supervisory duties. Everything in the company’s articles of association must be approved by the board to which the chairs of various committees regularly report their activities and resolutions.

Organization and operation of the board of director

Chien Kuo Construction’s 22nd board of directors was elected at a shareholder meeting on July 22, 2021. The board consists of thirteen members with extensive experience in business administration. We heavily rely on their knowledge, personal perspectives and business acumen. Three of the thirteen members are independent directors, who are outstanding representative in their professions, and responsible for the first level of the audit work. The board of directors is rigorous, professional and responsible in the execution of its responsibilities.

It is our philosophy of corporate governance that the primary responsibility of the board of directors is supervision. The board of directors ensures the company complies with laws and regulations, ensures transparency of financial information, discloses important information in a timely manner and exercises effective internal control.

The board of directors at Chien Kuo Construction has established the audit committee, compensation committee and internal audit department, to ensure it better fulfills its supervisory responsibilities.

The board of directors also advises the Chien Kuo Construction management team, which submits regular reports. It evaluates the likely success of strategies proposed by management, reviews progress made and asks for adjustments to be made when deemed necessary. The management team and the board maintain close contacts and work together to maximize shareholder profits.

Board of directors

Audit Committee

Chein Kuo Construction formally established Audit Committee in 2018, which is formed by the panel of independent directors under the Board. The Committee is held quarterly and extraordinary meetings accordingly. The Committee assists the Board to supervise the honesty, integrity and transparency of accounting, internal auditing and financial control. The responsibilities of the Committee are to audit the financial reports, hire or dismiss of an attesting CPA, or the compensation given thereto, assessment of the effectiveness of the internal control system, and to ensure the company compliance with laws and manage the potential risks.

Board committee membership

Compensation Committee

Chien Kuo Construction established the compensation committee to determine and review the performance of directors, supervisors and managers, as well as the company’s compensation and benefit policy, system and structure. The committee also regularly evaluates and determines the salaries and benefits of the aforementioned personnel.

The remuneration committee executes its duty based on the following principles:

The committee assesses performance and remuneration based on industry standards, personal performance, company performance and future risks. The committee seeks to prevent the board of directors and managers engaging in behavior that exceeds the company's risk tolerance for the sake of higher remuneration.

The compensation committee comprises three members and a minimum of one independent director. At least one of the independent directors must have legal or management expertise. Members of the compensation committee are proposed by the chairman to the board of directors for approval, and the committee convenes a minimum of twice per year. Members of the compensation committee must recuse themselves from voting on issues with which they or the legal person represented have a conflict of interest that could be deemed harmful to the interests of the company, or on any issue a committee member believes he/she should avoid due to a conflict of interest.

Board committee membership

Organization and operation of internal audits

• The Audit Office of Chien Kuo Construction, an independent entity staffed with professional auditors, reports directly to the Board of Directors. In addition to regularly reporting to the Board, the Audit Office also regularly or intermittently reports to the Chairman and the Board Supervisors.
• The audit office has an audit director, audit personnel and substitute staff, who must not only have qualifications stipulated by the Securities and Futures Bureau but are also required to complete advanced internal auditing related programs each year.
• The appointment, removal, performance appraisal, salary benefit package of internal auditors, which should be signed by the audit director and report to the chairman of the board for approval. The performance appraisal is implemented twice a year. The relevant regulations and procedures has been disclosed in the section of the company’s webpage.
• Internal audits review the internal control system of company protocols based on internal control processing rules, internal control systems and detailed internal audit regulations. In terms of scope, this covers all protocols at the company and its subsidiaries to ensure suitability, efficiency and effectiveness.
• The auditors execute the auditing items formulated based on risk identification and according to the board-approved annual audit plan. They then complete an audit report, periodically follow up and report on the progress of the audit improvement plan and implement a project-based audit or follow up audit as required.
• The internal audit team conducts regular reviews of the internal control/self-assessments conducted by departments to ensure implementation of it’s operations and documentation quality. The team reports the results of the internal audit and improvements to the general manager and board of directors to determine the efficacy of internal controls and then issues an internal control statement. According to regulations this statement is published in the company’s annual report, the stock issue prospectus. In accordance with regulations annual internal audit plans, audit plan execution, internal control findings and improvements should all be posted on the Market Observation Post System.

Articles of association and internal policies