The composition of the Board of Directors is determined through a vote by all shareholders in accordance with the ’Company Act’ and the ‘Securities and Exchange Act’, as well as other related regulations and governance principles. The function of the Board is strengthened through the creation of functional committees under the Board. Realtek directors are selected and assessed on their business acumen, management skills, accounting and financial analysis, crisis management, industry knowledge, understanding of the international market, leadership ability, decision-making ability, and risk management. The 12th Board of Directors added one director, with a total number of 10 directors, consisting of nine male directors and one female director, with an average age of 61.5 years old. All directors possess the requisite knowledge, skills, and sophistication to carry out their duties, and each director has a diverse professional background. They are required to exercise their authority in an objective and independent manner based on the long-term interests of the Company and all shareholders. Corporate governance policy shall be set to a high standard to ensure the effectiveness of the Board. This will in turn protect interests of shareholders while enhancing benefits for stakeholders. For more information on Board members, refer to page 11~12 of the Realtek 2021 Annual Report.
Board of Directors Functions
The Board of Directors diligently carries out corporate governance responsibilities by overseeing operational strategies of the Company’s management and evaluating business performance, including corporate governance, environmental and social impacts, risks, and opportunities. The Board considers the viewpoints of stakeholders then provides professional and objective views in order to ensure sustainable development of the Company. Every important resolution of the Board is published on the Market Observation Post System of the TWSE and the Company website in a timely manner. Information such as the Articles of Incorporation, rules of procedure for Board meetings, directors’ compensation, Board operations, and motion for recusals with a conflict of interest are also posted publicly for reference by international and domestic stakeholders.
The tenure of Realtek’s 12th Board of Directors is from August 9th, 2021 to August 8th, 2024. The Board includes three independent directors. The 2021 Board meetings were chaired and run by Chairman Sun-Chien Chiu to advance corporate governance. The Board convened at least once a quarter. There were a total of seven Board meetingsin 2021, and the average attendance rate of Board members was 98%. Board members attended external continuing education courses in accordance with the ‘Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies’. The courses covered risk management, climate change response and management, internal control, anti-corruption, anti-bribery, and corporate governance. Topics studied in 2021 included ‘2030/2050 Net Zero Emissions – Sustainability Challenges and Opportunities for Global Enterprises’, ‘Net Zero Carbon Emissions International Trends and Taiwan’s Zero Carbon Transformation’, ‘Key Points Behind the Success or Failure of Digital Transformation – International Case Study’, ‘2021 Insider Share Transactions Legal Compliance Advocacy’, and other professional continuing education courses. The directors attended a total of 24 hours of classes. All Board members gained professional knowledge and kept pace with the latest corporate governance topics, thereby making them more effective directors.
Key Functional Committees of the Board of Directors
Audit Committee
The Audit Committee consists of three independent directors. The committee assists the Board of Directors with performing its supervisory duties and other responsibilities as specified by the ’Securities and Exchange Act’, the ‘Company Act’, and other relevant regulations. Responsibilities include reviewing possible director conflicts of interest, material asset or derivative product transactions, annual financial reports and semi-annual financial reports, and other important matters as specified by the Company or competent authorities. The committee meets regularly with the Company’s CPA and reviews the CPA’s appointment, independence, and performance. The committee convened six times in 2021 with attendance rate of 100% for the committee meetings.
Remuneration Committee
Realtek established the Remuneration Committee in accordance with the ‘Securities and Exchange Act’ and ‘Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock Is Listed on the Stock Exchange or the Taipei Exchange’. The committee consists of three independent directors and is appointed through a resolution of the Board. Responsibilities include assisting the Board with evaluating connections between the Company’s business performance and the remuneration for directors and managers, as well as defining and regularly evaluating the systems, standards, and structures of performance targets and remuneration policies for directors and managers. The function of Remuneration committee is to perform duties diligently with focus on sound management then propose related recommendations to the Board for consideration. The Remuneration committee convened three times in 2021 with attendance rate of 100%.
Nominating Committee
The Nominating Committee performs duties diligently with focus on sound management, under authorization of the Board of Directors, and submits recommendations to the Board for discussion. The Nominating Committee consists of three independent members and is determined through a resolution of the Board. The committee defines the criteria for diversity and independence of Board members, such as professional knowledge, skills, experience, and gender, then applies the criteria to find, review, and nominate candidate directors. The committee shall construct and define the organizational structure of the Board and each committee; evaluate the performance of the Board, directors, and committees; and defineㄖand regularly review the succession plan for directors and executives. The committee convened five times in 2021 with attendance rate of 100%.
Training Information
Board members attended external continuing education courses in accordance with the ‘Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies’. The courses covered risk management, climate change response and management, internal control, anti-corruption, anti-bribery, and corporate governance. Topics studied in 2021 included ‘2030/2050 Net Zero Emissions – Sustainability Challenges and Opportunities for Global Enterprises’, ‘Net Zero Carbon Emissions International Trends and Taiwan’s Zero Carbon Transformation’, ‘Key Points Behind the Success or Failure of Digital Transformation – International Case Study’, ‘2021 Insider Share Transactions Legal Compliance Advocacy’, and other professional continuing education courses. The directors attended a total of 24 hours of classes. All Board members gained professional knowledge and kept pace with the latest corporate governance topics, thereby making them more effective directors.