Succession Planning for Board Members and Key Management

Succession Plan and Operation for Board Members

The Company's election of directors adopts a candidate nomination system in accordance with the "Articles of Incorporation." The "Corporate Governance Best Practice Principles" specify that the composition of the Board of Directors should consider diversity, and a diversity policy should be formulated based on the Company's operations, business model, and developmental needs, including but not limited to two major criteria: basic conditions and values, and professional knowledge and skills.

The structure of the Company's Board of Directors should be determined based on its business development scale and the shareholding of its major shareholders, taking into account practical operational needs.

The Company's ongoing director succession plan builds a candidate database based on the following criteria:

• Integrity, responsibility, innovation, and decision-making ability, consistent with the Company's core values, and possessing professional knowledge and skills conducive to business management.
• Possessing industry experience relevant to the Company's business operations.
• The addition of the member is expected to continuously provide the Company with an effective, collaborative, and diverse Board of Directors that meets the Company's needs.
• The overall expertise of the Board of Directors must encompass corporate strategy and management, accounting and taxation, finance, and law.
• The Company's selection process for the list of director candidates must comply with qualification reviews and relevant regulations to ensure that suitable new directors can be effectively identified and elected when board vacancies occur or when an expansion is planned.

The Company has also clearly established the "Board of Directors Performance Evaluation Methods." Through performance evaluation metrics—including control over company goals and missions, awareness of duties, participation in operations, management of internal relationships and communication, professional competencies and continuing education, internal controls, and expression of specific opinions—the effective operation of the Board is confirmed, and directors' performance is assessed to serve as a reference for future director selections.

To strengthen the functions of the Board, the Company arranges training courses for board members covering corporate governance-related topics such as finance, risk management, business, commerce, legal affairs, accounting, sustainable management, internal control systems, and financial reporting responsibilities. Each person receives at least 6 hours of continuing education per year to help directors acquire new knowledge, keep pace with the times, and familiarize themselves with their roles, functions, responsibilities, and duties on the Board, effectively implementing the corporate governance system.

Succession Plan and Operation for Key Management

Employees at or above the Assistant Vice President level are considered key management, responsible for related business management within the organization. Each management level has a designated deputy. In addition to possessing the necessary professional skills and background experience, key management's values and management philosophy must align with the Company's corporate philosophy, "Modesty and Pragmatism."

To cultivate key management and their deputies, the training mechanism includes not only professional competence and corporate governance courses but also practical on-the-job training. This is achieved by having them attend Board meetings, participate in regular internal key management meetings, and manage special projects. Furthermore, quarterly practical sharing and exchange sessions on management issues are arranged for supervisors, and monthly learning courses covering leadership, management, technology, innovation, and industry trends are provided for management to learn.

The Company conducts annual employee performance appraisals. Through daily observation and performance evaluation, we understand areas for improvement, individual development needs, and company expectations. The appraisal results serve as a reference for future succession planning.