Committee functions

Framework and Operation of the Board

According to the "Bank of Taiwan Articles of Incorporation", our Board of Directors comprises 15 directors (including three independent directors and three employed directors) for a term of three years. Directors are appointed by Taiwan Financial Holdings who meet the qualifications described in "Regulations of Ministry of Finance on the Appointment of Heads, Managers, Directors and Supervisors of Public/Private-Operated Institutional Organizations" and the "Regulations Governing Qualification Requirements and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Banks". The Charter specifies that there should be at least three independent directors comprising no less than one-fifth of overall seats. The directors specialize in their own fields, ranging from business management, economics, finance, and accounting, to legal affairs and information communications, and equipped with the necessary knowledge, skills, and qualities to perform their duties.

2023 directors background

Evaluation of Board Performance

The Board meets once quarterly and as often as needed. In 2023, the Board held 11 meetings (including provisional meetings) and 48 managing directors' meetings (provisional meetings included) with an overall attendance rate of 95.3%.

To functions of the Board of Directors and corporate governance, we follow the "Regulations of Ministry of Finance on the Appointment of Heads, Managers, Directors and Supervisors of Public/Private-Operated Institutional Organizations" to conduct performance reviews of directors within two months after the end of each year. Attendance, engagement in important topics in meetings, participation in and contribution to the business (specific proposals made to mid-long term business objectives, operation goals, annual plans, annual budget, operation performance risk control, compliance, internal control, the internal audit system, achievements, and major penalties are taken into consideration in evaluations, along with self-reviews forwarded to Taiwan Financial Holdings. The results are critical indicators for subsequent election and appointment.

Directors Continuous Learning

To ensure strong competence, we engage courses that focus on corporate governance. In 2023, learning hours totaled 181 hours; an average of 12.9 hours per director. The courses covered environmental sustainability, sustainable finance and investment, climate change and the net-zero transition, financial technology and information security, global economic development, and risk control to enhance corporate governance.

Course projects	Course	Participants	Courses Hour
Environment	Environmental and developmental sustainability	5	15
Environment	Climate change and the net-zero transition	9	27
Society	Risk management, internal control, digital governance	9	27
Society	Business related to the banking industries	2	6
Governance	The framework, operation, internal control and digital governance	15	59
	Finance, accounting, economy	6	18
	Sustainable finance and investment, Financial technology, and the information security	10	29
Total		56	181

Remuneration Process

BOT is owned by the Government of the Republic of China, and the guidelines governing the pay for directors, supervisors, the president, and senior executive vice president follows the "Regulations of Ministry of Finance on the Appointment of Heads, Managers, Directors and Supervisors of Public/Private-Operated Institutional Organizations" and applicable MOF regulations. The Projects and Goal Achiever for the Central Policy for the first half and second half of 2023 has been incorporated in the Government ESG Initiative Platform Execution Plan. The salary of BOT employees is also governed by the "Key Points for the Management of Employee Expense Payments for Public Institutions Subordinate to the Ministry of Finance" and the "Operating Regulations for Salary Adjustments of Employees in State-owned Banks Subordinate to the Ministry of Finance", which dictate the framework when connecting pay and ESG performance.

Please refer to p.39-41 of the Annual Report 2023 for further details on the remuneration of directors, supervisors, the president, and senior executive vice president in 2023.

Items	Highest governance body (directors and independent directors, including the chairperson)	Senior management unit (senior managerial position, including the president)
Basic pay	• The basic pay for directors follows the "Regulations of Ministry of Finance on the Appointment of Heads, Managers, Directors and Supervisors of Public/Private-Operated Institutional Organizations". • The chairperson's basic pay is governed by the "Key Points for Salary Adjustments for Directors of Institutions Affiliated with the Ministry of Finance". The assessment considers the operation results against goals, operation performance, and how closely they reflect on the director's duties and business performance.	• The "Key Points for Salary Adjustments for Directors of Institutions Affiliated" with the Ministry of Finance applies. The assessment looks at the operation results against goals, operation performance, and how closely they reflect on the director's duties and business performance. • The "Operating Regulations for Salary Adjustments of Employees in State-owned Banks Subordinate to the Ministry of Finance" with the Ministry of Finance apply to the remaining senior management unit. The assessment looks at consumer price index, employee productivity, profitability, scale of operations, and peer salary levels.
Variable pay	• Not applicable to directors. • Based on the "Key Points for the Implementation of Operating Performance Bonuses for Institutions Affiliated with the Ministry of Finance", the "Notes on BOT's Bonuses Issued for Operating Performance", and the "Key Points for BOT's Issuance of Operating Performance Bonuses", to assess whether the allocation of bonuses meet employees' contributions and work performance.	The issuance of operation performance bonuses follows "Key Points for the Implementation of Operating Performance Bonuses for Institutions Affiliated with the Ministry of Finance", "Notes on BOT's Bonuses Issued for Operating Performance" and "Key Points for BOT's Issuance of Operating Performance Bonuses", and the allocation of bonuses meets employees' contributions and work performance.
Severance and pension	• Not applicable to directors. • The chairperson's severance pay follows the "Retirement and Pension Principles for Managers in Charge of Publicly Owned Institutions".	• President severance pay is regulated by the "Retirement and Pension Principles for Managers in Charge of Publicly Owned Institutions". • The "Measures for Pensions and Severance for Personnel of Financial and Insurance Institutions Affiliated with the Ministry of Finance" apply and the self-contributing principal and interest returns to the non-president senior management unit.
Retirement benefits	No applicable regulation.	The "Measures for Pensions and Severance of Personnel of Financial and Insurance Institutions Affiliated with the Ministry of Finance" apply to the senior management unit, except for the president. Management shares the same scheme with other employees in terms of pension contribution rate and pension plan.

Note: In 2023, the annual total salary of the executive vice president was 2.19 times compared with the median total salary of all employees, and the annual total salary and compensation change rate was 99.8%.

Function-specific Committee

We introduced independent directors and established the Audit Committee in 2009, making us the first sole shareholder banking service and first public business in Taiwan. The committee exercises its rights on the basis of the "Audit Committee Charter", ensuring good audit work and corporate governance for a better board performance. In 2023, the Audit Committee held eight meetings with 100% attendance.