The Board of Directors of Realtek is elected by all shareholders through a voting process. Evaluation of directors are based on background diversity, professional ability and experience, and the criteria consist of operation judgement, operation management, accounting and financial analysis, crisis management, industry knowledge, international marketing, leadership, decision-making capability and risk management. The current Board of Directors consists of 10 directors, including 3 independent directors, 4 executive directors and 1 female director, with an average age of 62.5 years old. Over half of the members are shareholders. The tenure of Realtek’s director is three years (currently from August 9, 2021 to August 8, 2024). The Board has set up various functional committees to strengthen its operating efficiency, thereby protecting the interests of the shareholders while enhancing benefits for stakeholders. For more information on Board members, please refer to Realtek 2022 Annual Report or the Market Observation Post System.
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. At the same time, the Board listens to the operation strategies of the Company at the operating level and considers the viewpoints of stakeholders, providing professional and objective opinions with a high degree of self-discipline and prudence to ensure the implementation of sustainable development of the Company. The 2022 Board meetings were chaired by Chairman Sun-Chien Chiu to advance corporate governance. The Board convened at least once a quarter, with 5 meetings being held with 100% average attendance rate of Board members; proposals made by each unit to the Board covered important economic, environmental, social and risk management issues.
Key Functional Committees of the Board of Directors
Board Performance Evaluation
The Board of Realtek conducts regular internal performance evaluation for the year in December every year. The scope of evaluation covers the entire Board, individual Board members and functional committees, and is completed through internal self-evaluation of the Board and self-evaluation of Board members. The Nominating Committee acts as the executive unit in the evaluation process, collects relevant information and implements a scoring questionnaire. The evaluation results along with specific explanations are compiled and reported to the Board of Directors in order to improve corporate governance and achieve the goal of sustainable business operation.
Remuneration Policies for Directors and Managers
The remuneration of directors and managers is conducted in accordance with the Articles of Incorporation. The remuneration of directors is determined based on the performance evaluation results of the Board in terms of the participation in operation, the quality of the Board’s decisionmaking, the knowledge of the Company’s objectives and tasks, the awareness of directors’ duties, the maintainence and communication of internal relations, the professional and continuing education of directors, internal control, etc. The performance of evaluation also emcompass the entire Board, individual Board members and functional committees, considering factors such as time invested and responsibilities assumed to assess the correlation between individual performance and the Company’s operating performance and future risks. Additionally, the remuneration of the managers is determined based on performance assessment indicators such as their years of work and responsibilities, performance, contribution to the Company’s operation, industry standards and profitability of the Company.
The remuneration of directors and managers is determined by the Remuneration Committee with reference to the results of performance evaluation, Company’s operating performance and future risks. After the resolution is passed, the remuneration is proposed to the Board of Directors, and is determined after its approval. The remuneration of directors and employees is reported to the shareholders’ meeting. The Remuneration Committee and the Board of Realtek will review the remuneration policy for directors and managers in a timely manner based on the actual operating conditions and relevant laws and regulations, to seek a balance between the sustainable operation and risk management of the Company. The details of the remuneration of the directors and supervisors can be referred to the Realtek 2022 Annual Report.
Board members of Realtek 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”. By enhancing learing and strengthening professional competence of the directors, Realtek keeps pace with the latest corporate governance practices, thus achieving sound and effective corporate governance. In 2022, the Board’s studied topics including “The future of Metaverse and Cryptocurrency blockchain”, “Introduction to corporate management disputes and the commercial court ajudiction act”, “The value of information security in the post-COVID-19 era amid US-China trade war”, “Virtual World Explosion: the future development of Metaverse and Cryptocurrency blockchain”, “Response to international order variances and corporate governance”, “The 18th (2022) Corporate Governance Summit Forum enhancing director competence for sustainable corporate governance” and “Analysis of business ownership disputes and prevention strategies”, and other professional continuing education courses. The directors attended a total of 21 hours of classes.