:::
Organization ChartDirectors, Supervisors & Top ManagementExecution of Corporate GovernanceSocial ResponsibilityEthical Corporate Management Best Practice PrinciplesProcedures for Ethical Management and Guidelines for Conduct

Execution of Corporate Governance

Corporate Governance Implementation Status and Deviations from “Corporate Governance Best-Practice Principles for Banks”
As of December 31, 2017
Corporate Governance Implementation Status and Deviations from Corporate Governance Best-Practice Principles for Banks and reasons
Evaluation Item Implementation Status Deviations from the Principles
Yes No Abstract Illustration
A. Ownership Structure and Shareholders’ Equity
  1. Does the Bank establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure?
 

  • The Bank is a 100% owned subsidiary of Mega Financial Holding Company (“Mega FHC”). The Bank's operation and management, financial business information and audit management are handled in accordance with the “Regulations on Supervision of Mega FHC's Subsidiaries”. Recommendations or questions regarding the Bank's operations may be conveyed through formal letters, telephones, emails, etc. The Bank's business supervisory units will handle or explain the case, in accordance to the internal operating procedures.
  • Mega FHC is the Bank’s sole shareholder. Any shareholders’ dispute or litigation shall be handled by the supervisory units. However, if due to complexity of the case or other special factors, where it is necessary to engage a lawyer, the units, according to Article 3 of the Bank’s Directions for Handling Legal Cases, shall request for approval from the authorized level before engaging a lawyer.
None
  1. Does the Bank possess the identities of its major shareholders as well as the ultimate owners of those shares?
 
  • Mega FHC is the Bank's sole shareholder and ultimate controller.
  1. Does the Bank establish and execute the risk management and firewall system within its conglomerate structure?
 
  • The responsibilities for the management and risk control mechanism of personnels, assets and financial matters of the Bank and affiliated companies are completely independent; and tight firewall mechanisms are established and executed:
    • Information security: The internet between the Bank and affiliated companies is connected directly through peer-to-peer which is the safest way of internet connection, and controlled by Firewall to avoid unauthorized connection.
    • Client confidentiality: The person in charge of processing and using customer information has to be authorized for entering and removing customers' personal particulars, and a post-execution supervision mechanism is in place to ensure the appropriateness of authorization.
    • Stakeholder transactions: The Bank has established “Rules on Handling Stakeholder Transaction”. Also, in accordance with the relevant laws and regulations, the stakeholder transaction balance is submitted to the parent company, Mega FHC, regularly. Mega FHC then discloses the related information and submits it to the competent authority.
B. Composition and Responsibilities of the Board of Directors
  1. Does the Bank voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?



  • After joining Mega FHC, the Bank is delisted from the stock market and is not mandatory to set up a Remuneration Committee. The design and adjustment of the Bank's remuneration is submitted to Mega FHC for approval.
  • Mega FHC has set up an Audit Committee. According to the regulations issued by Financial Supervisory Commission, a company 100% owned by a financial holding company may choose to set up an audit committee or appoint supervisors, and the Bank has adopted the latter. The Bank's supervisors may communicate with the Bank's employees, head of internal audit and shareholders at any time, and convene supervisors meetings from time to time, with the attendance of a CPA where necessary.
  • The Bank has 16 committees, and the board of directors is in charge of the Risk Management Committee, Compliance Committee, Compliance Action Committee, and Ethical Management Committee.
  1. Does the Bank regularly evaluate the independence of CPAs?
  • When appointing a CPA, the Bank shall assess its independence and request it to provide “Independence Declaration on the Auditing and Attestation of Financial Report by the Certified Public Accountant”.
C. If the Bank is a listed or OTC company, is it required to set up dedicated (non-dedicated) unit or personnel in charge of matters related to corporate governance?
  • The Bank is a 100% owned subsidiary of Mega FHC, and is not listed on Taiwan Stock Exchange or Taipei Exchange. However, the Bank’s General Affairs and Occupational Safety & Health Department is in charge of matters related to company registration and registration change. The office of the board of directors is in charge of matters related to the board of directors meetings, and providing information regarding professional practice to directors and supervisors.
D. Does the Bank establish a communication channel with interested parties?
  • The Bank has diverse communication channels with interested parties such as customers, employees, suppliers, community residents, etc. These parties may contact the Bank through the 24-hour customer hotline or public website; or may communicate with the Bank through letter or meeting. Also, a labor union bulletin in the Bank’s intranet allows employees to express their opinions.
  • In terms of communicating with interested parties defined in The Banking Act and Financial Holding Company Act, the Bank’s Head Office request all unites to provide the interested parties list according to The Banking Act of The Republic of China and Financial Holding Company Act to related interested parties for confirmation. Upon confirmation by the related interested parties, the interested parties profile shall be maintained in the Bank's e-Loan System and Mega Financial Holding Company's network information system. Should there be any change in the duties of the interested parties, the person concerned shall be communicated, and the profile updated immediately.
E. Information Disclosure
  1. Does the Bank have a corporate website to disclose both financial standings and the status of corporate governance?

  • The Bank's official website (https://www.megabank.com.tw) is maintained by dedicated personnels regularly to disclose information regarding the Bank’s business, financials and corporate governance.
  1. Does the Bank have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?
  • The Bank's official website has an English version, https://www.megabank.com.tw/en/. If there’s information needed to be made public in accordance with the relevant laws and regulations, the Bank shall, within the legal time limit, designate a personnel to report and disclose immediately.
  • The Bank has established “Procedures for Releasing Information by Spokesperson and Acting Spokesperson”. The Spokesperson and Deputy Spokesperson speak publicly on behalf of the Bank by means of press release, website disclosure or disclosure of information.
  • The investor conference is handled by the parent company, Mega FHC.
F. Is there any other important information to facilitate a better understanding of the Bank’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors, and donations to political parties, stakeholders, and charity organizations)?
  • Employees' rights: The Bank shall inform the employees in advance of any job relocation. If the change of business nature results in no suitable jobs for the employee, or the employee is incompetent in taking up the job, the Bank shall, according to the Labor Standards Act, inform the employee in advance of the termination of employment contract at least 10 to 30 days. In addition, the Bank and the Union have established a collective agreement. The Bank has set up the Personnel Appraisal Committee, formed by the Bank and union representatives, responsible for the review of awards and penalties of the employees. It has also established the Occupational Safety & Health Committee, responsible for the planning and handling, review and supervision of matters related to labor safety, hygiene and health. Employees’ Retirement Fund Supervisory Committee is also set up to safeguard employees' pension.
  • Employee welfare: The Bank has set up the Employee Welfare Committee, responsible for the review and planning of employee welfare services and fund allocation. In addition, the Bank conducts regular employees' health checkup and seminars. Employees can also obtain health knowledge through e-learning to achieve the objective of preventive health care.
  • Investor relationship: The Bank is fully answerable to its parent company, Mega FHC, for its business performance.
  • Directors to recuse themselves from cases in which they have a material interest: As per Rules and Procedures of shareholders meeting of the Bank, interested parties with respect to proposals shall recuse themselves from discussions or voting to avoid the conflict of interest.
  • Advanced studies of directors and supervisors: the Bank provides directors and supervisors with opportunities enhancing their professional competency.
  • Execution of customer policies: According to the various regulations of the competent authority and bank union, the Bank shall state in the contract, regulations to be complied, whereby customers can claim the right based on the contracts.
  • Purchasing liability insurance for directors and supervisors: The Bank purchases “Directors and Key Employees Liability Insurance” for all directors and supervisors.
  • Donations: The Bank has, over the years, organized various activities and donated to charities and non-profit organizations. The donation process strictly complies with the various internal and external laws and regulations.