Corporate Governance

Specialized Corporate Governance Personnel

The Board of Directors of the Company passed the personnel case of the Group’s “Corporate Governance Officer” and the “Standard Operating Procedures for Directors' Requirements Handling” on March 18, 2019, appointing Jean Liu (Chairman’s Office) as the head of corporate governance, who has more than three years of experience in management of public offering companies in stock affairs and conventions.

The main duties of the Corporate Governance Executive include at least:

• Handling matters relating to the Board of Directors and the shareholders' meeting in accordance with the law.
• Making reports of the board of directors and shareholders' meetings.
• Assisting the directors in taking up their posts and further education.
• Providing the information required for the directors to perform their business.
• Assisting the directors in complying with the laws and regulations.
• Other matters stipulated in the company's articles of incorporation or contracts.

The business implementation of year 2021 was as follows:

• Provide directors with information that required by their duty performances.
• Arranging for further study of directors. (All directors completed the training hours in 2021 in accordance with the regulations.)
• To draw up the agenda for the board of directors, inform the directors seven days in advance, convene the meeting and provide information for the meeting. Any issue concerns director’s interests that required a particular director to avoid should be reminded beforehand and complete the meeting minutes of the board of directors within 20 days after the meeting.
• Assist the board of directors and shareholders in the proceedings and compliance matters.
• Responsible for reviewing material information announcement of important resolutions of the board of directors after the meeting, ensuring law conformity and correctness of the content of the material information.
• The date of the shareholders' meeting shall be registered beforehand according to the law, the meeting notice, the proceedings handbook, and the journal shall be made during the statutory period, and the change of registration of the company shall be carried out along with the amendment to the articles or the re-election of the directors.
• Handle the annual performance evaluation of the board of directors and its members.
• Responsible for corporate information disclosure.
• Continuous training. (Corporate governance executive completed 12 hours of training in 2021.)

Board of Directors

The board of directors is composed of eight directors with rich management or academic experience, including four independent directors, and one of the four directors was female. Dynamic is looking forward to leading the group towards sustainable development with more professional, independent and diverse structure of the board of directors.

Directors are:

• Ken Huang, current Chairman of the Board cum CEO
• Hung-Li Investments Co., Ltd.
• Chien-Hung Investment Co., Ltd.
• Ming-Ji Investments Co., Ltd.

Independent directors are:

• Yi-Chia Chiu, Vice President of Business School, Chengchi University
• Vincent Lin, Technical VP, Emotibot Technologies Limited.
• Cheryl Chien, LIAO, SUNG & TSENG ATTORNEYS-AT-LAW
• Vincent Weng, Former Executive Director, Standard Chartered Bank

The resumes of independent directors are as follows:

Implementation of Diversified Members of the Board

The Company's Code of Corporate Governance Practices article 20 indicates that the composition of the board of directors shall be diversified. one should also formulate an appropriate diversification policy for his/her own function, operational style and development needs, including but not limited to the following two standards:
1. Basic conditions and values: gender, age, nationality and culture.
2. Professional knowledge and skills: professional background (such as law, accounting, industry, finance, marketing or technology), professional skills and industry experience.

The board members should generally possess the necessary knowledge, skills and literacy to perform their duties. In order to achieve the ideal goal of corporate governance, the overall ability of the board of directors should be as follows:
1. Good judgement in operations.
2. Accounting and financial analysis capabilities.
3. Business management capabilities.
4. Crisis handling abilities.
5. Industrial knowledge.
6. Vision to international market.
7. Leadership.
8. Decision-making ability.

The board of directors is composed of eight directors with rich management or academic experience, including four independent directors, and one of the four directors was female. The background and expertise of the present four independent directors cover strategy, technology management, intellectual property, finance, law and technology.

The specific management goals and current implementation of Dynamic’s Diversity Policy:

Goal: At least one female director and independent directors with legal and financial expertise.

Implementation situation: The board of directors has been fully re-elected in 2021, and a female lawyer and a male financial expert have joined as independent directors to achieve the goals.

Future goals: Continue to increase the number of female directors and directors with ESG expertise.

Performance Assessment of the Board of Directors and its Members

Year 2021 the communication between independent directors and internal auditor and CPA

Principles of the communication between independent directors and internal auditor and CPA

1. The auditor and CPA may directly contact independent directors as necessary, and the communication went well.
2. In addition to receiving monthly audit reports by the independent directors of the company, the auditors also separately reported to the independent directors on the important affairs of the company and its subsidiaries in the annual convention, and have fully communicated the implementation and results of the audit business. .
3. The CPA reported to the independent directors on the audit results and findings of the financial statements in the annual discussion.

Summary of the 2021 communication discussion between independent directors, internal auditors and CPA

Internal audit

I. Internal audit organization:

1. Establish an internal audit unit: under the board of directors
2. Appoint designated audit personnel: 2 people
3. The appointment and dismissal of the company's internal audit supervisors shall be approved by the Audit Committee and a resolution of the Board of Director; the appointment, dismissal, assessment, and compensation of the internal auditors shall be signed by the audit supervisor and submitted to the Chairman for approval (Refer to Article 3 of Corporate Governance Best Practice).

II. Internal audit operation:

1. The objective for implementation of internal audit is to assist the board of directors and managers in examining and reviewing defects in internal control systems and the results and efficiency of balanced management, and provide appropriate improvement recommendations. This ensures that the internal control system can continuously and effectively be implemented, and can be used as a basis to review and correct the internal control system.
2. Audit work shall be processed based on Regulations Governing Establishment of Internal Control Systems by Public Companies and Financial Supervisory Commission (Executive Yuan) announced regulations.
3. Internal audit work procedure:

1. Draft the audit plan for the next year for this company and subsidiary companies prior to the end of December each year based on risk evaluation results. The drafted plan shall be submitted to the Audit Committee and board of directors. The scope of audit items shall cover important control work. The same process goes for any revisions.
2. Implement audit work according to plan and submit the Internal Audit Report and Monthly Internal Audit Summary.
3. Produce an Abnormal Item Improvement Recommendation and Contact List for internal control defects and abnormalities discovered in audit reports. Notify the audited department to conduct defect improvements.
4. After the Internal Audit Report, Monthly Internal Audit Summary, and Abnormal Item Improvement Recommendation and Contact List has been submitted, the documents shall be given to each Audit Committee member for review before the end of the month following the date that the audit items are due to be completed. If major violations are discovered or the company might potentially sustain severe damage, these items shall be immediately reported and each Audit Committee member notified.
5. Each unit and subsidiary company’s internal control system self-evaluation results shall be reviewed, compiled, and analyzed prior to the end of March each year. The results shall be made into an Internal Audit Self-Evaluation Report and submitted to the management. The report shall be made into an Internal Control System Statement and submitted to the Audit Committee and board of directors.
6. Internal audit reporting:
   1. Prior to the end of December each year: the audit plan for the following year (passed by the board of directors)
   2. Prior to the end of January each year: register internal audit personnel
   3. Prior to the end of February each year: actual audit plan implementation status for the previous year.
   4. Prior to the end of March each year: Internal Control System Statement (passed by the board of directors)
   5. Prior to the end of May each year: improvement status for internal control system defects and abnormalities discovered in previous year’s internal audit.
7. Audit supervisor shall report audit work to attending directors according to regulations.

The Information Security Management

1. The Definition of Information Security Information security management is a management issue that cannot be ignored nowadays. Its main spirit is to identify the organization’s important information assets and the threats they face, and to plan reasonable control measures under the effective allocation of resources to reduce risks to the acceptable level of the enterprise.
   This is a risk management process. The focus of management should be on the protection of the organization's confidential information, rather than the access to all information assets as this will increase the company’s cost and sidetrack the main purpose. In recent years, the endless information security incidents worldwide are mostly caused by the lack of the above-mentioned information security risk management mechanism.
2. Information Security Risks The main information security risks we face are as follows:
   • Virus/worm/ransomware attack: caused by accidental or malicious click on unknown files or links.
   • Natural disasters: typhoons, floods, etc. that cause power outages and indirectly interrupt the operation and maintenance service of the system/equipment.
   • Man-made disasters: carrying or sending confidential information, improper destruction process... etc.
   • Recovery plan: The likelihood of the backup data being completely recovered to use.
   The company will plan response plans for the above-mentioned information security issues, and perform drills for different information security situations to strengthen the response capabilities of the processing personnel, so as to detect and block in the first time; in addition, Dynamic conducts security audits regularly , Such as vulnerability scanning or penetration testing to ensure that the information system and network environment meet security standards.
3. Information Security Policy
   • Establish the concept of "Everyone is responsible for information security", enhance the colleagues' awareness of information security, and guide them to implement information security protection work.
   • To comply with international information security standards and local information security laws and regulations.
   • Carry out appropriate protection measures for customer information and the company's important information assets to maintain the company's normal and continuous operations.
   • Continue to pay attention to changes in the information environment and conduct related risk assessments.
4. Information Security Implementation Plan
   • Establish a compliance cycle mechanism, regularly review and revise internal operating regulations to conform to the international information security standards and local information security laws and regulations.
   • Well equipped with all relevant information security norms and train excellent information security personnel.
   • Keep the colleagues well informed of the risks of using e-mail, Internet and daily file access, and improve colleagues' crisis awareness of preventing attacks to reduce risks, so as to achieve the purpose of protecting customer data and important company operating information and services.
   • Formulate disaster prevention countermeasures and disaster recovery plans for the company's important information assets.
   • Review the information security policy regularly and report to the board of directors regularly (at least once a year).
5. Information Security Management Committee

   

   

6. Information Security Accountabilities Company employees, contracted personnel and outsourced personnel are required to comply with the relevant provisions of the information security policy to ensure the safety of the company's production area, office area and information assets and equipment.
   • All units: The operation content of all the equipment in the work area must comply with the company's information security policy.
   • Information unit: Advocate information security risks and put forward risk issues and improvement measures.
   • Subcontractor: Must follow the company's information security policy and adapt to the mechanism of necessary inspection.
   • Information Security Committee: The increase, revision and abolishment of management measures
7. ISO27001 Certificate
   • Kunshan Plant ISO 27001 Certificate (Valid: 2022.01.24~2025.01.23)
   • Huangshi Plant ISO 27001 Certificate (Valid: 2022.01.24~2025.01.23)

If you need to make further inquiries or have any recommendations for stakeholder services, please use the following methods to contact us.

Jean Liu, Special Assistant of Chairman  Tel: +886 3349 3300 #7721 #7721  E-mail: jean_liu@dynamicpcb.com