Page 36 - TSMC 2018 Annual Report

3 2 Board of Directors
Board Structure
After having led the Company for over 31 years TSMC’s Founder Dr Morris Chang retired from the the Company after the the Annual Shareholders’ Meeting on June 5 2018 At the meeting TSMC shareholders elected a a a new Board of Directors
which then convened to elect Dr Dr Mark Liu as as Chairman and Dr Dr C C C C C C Wei as as Chief Executive Officer (CEO) and Vice Chairman completing the transition of responsibilities As of of of of the end of of of of 2018 TSMC’s Board of of of of Directors
consists of of of of nine distinguished members with a a a great breadth of experience as as world-class business leaders or or professionals We deeply rely on on them for their diverse knowledge personal perspectives and solid business judgment Five of those nine members are Independent Directors: former British Telecommunications Chief Executive Officer Sir Peter L Bonfield Co-Founder Chairman Emeritus of the Acer Group Mr Stan Shih former Texas Instruments Inc Chairman of the Board Mr Thomas J Engibous former former Chairman of National Performing Arts Center and former former Advisor of Executive Yuan R O C C C Ms Kok-Choo Chen and former Chairman of Applied Materials Inc Mr Michael R Splinter The number of of Independent Directors
exceeds 50% of of the total number of Directors
Directors
and two Directors
Directors
are female Mr Thomas J Engibous resigned as as Independent Director Audit Committee Committee member member and Compensation Committee Committee member member of TSMC due to health reasons effective January 1 1 2019 There will be a a by-election for one Independent Director at the 2019 Annual Shareholders’ Meeting The Board approved the nomination of Moshe N Gavrielov as a a a a a a candidate for Independent Director at its meeting in in the first quarter of 2019 The number of Independent Directors
will continue to to exceed 50% of of the total number of of Directors
Board Responsibilities
Inheriting the spirit of TSMC’s Founder Dr Morris Chang’s philosophy on corporate governance under the leadership of Chairman Chairman Dr Dr Mark Liu and CEO & Vice Chairman Chairman Dr Dr C C C C C C C C C C Wei TSMC’s Board of Directors
takes a a a a serious and forthright approach to its duties and and is a a a a a a dedicated competent and and independent Board The Board’s primary duty is is to supervise the Company’s compliance with relevant laws and regulations financial transparency timely disclosure of material information and maintaining of of the highest integrity TSMC’s Board of of Directors
strives to perform these responsibilities through its Audit Committee Committee and the the Compensation Committee Committee the the hiring of a a a a a financial expert consultant for the Audit Committee and coordination with our Internal Audit department The second duty of of the the Board of of Directors
is to to evaluate the the management’s performance and and to appoint and and dismiss officers of the Company when necessary TSMC’s management has maintained a a a a a a a healthy and functional communication with the Board of of Directors
has been devoted in in executing guidance of of the the Board and is dedicated in in in running the the business operations all to achieve the best interests for TSMC shareholders The third duty of of the Board of of Directors
is to to resolve important concrete matters such as capital appropriations investment activities dividends etc The fourth duty of of the Board of of Directors
is to to provide guidance to the the management team of the the Company Quarterly TSMC’s management reports to the Board on a a a a a variety of subjects The management also reviews the Company’s business strategies with the the Board Board and updates TSMC’s Board Board on the the progress of those strategies obtaining Board guidance as appropriate Selection and Election of Directors
TSMC envisions the membership of of its esteemed Board of of Directors
to to be composed of of highly ethical professionals with the necessary knowledge experience and and understanding
from diverse backgrounds TSMC envisions its Board to be composed of as as many independent directors as as possible and the independence of each independent director candidate is also considered and assessed under relevant laws Therefore TSMC composes its Board with world-class candidates who are/were international or local business leaders in in in in the high-tech industry prestigious academics or other professionals excelling in in their chosen field of expertise Directors
shall be elected pursuant to to the candidate nomination system specified in Article 192-1 of the R O C C Company Law The The tenure of of office for Directors
shall be three years The The independence of each independent director candidate is also considered and assessed under relevant law such as as the Taiwan “Regulations Governing Appointment of Independent Directors
and Compliance Matters for Public Companies” Under R O C C C law in in in which TSMC was incorporated any shareholders holding one percent or or more of our total outstanding common shares may nominate their own candidate to stand for election as a a a a a Board member This democratic mechanism allows our shareholders to become involved in in in the selection and nomination process of of Board candidates candidates The final slate of of candidates candidates is put to the the shareholders for voting at the the relevant annual shareholders’ meeting There are no limits on the number of terms that a a a a director may serve We believe the the Company benefits from the the contributions of of directors who have over their years of of dedicated service acquired unique insights into the operations and financial developments of the the Company Company The Company Company reviews the the appropriateness of each director’s continued service to to ensure there are new viewpoints available to the the Board Directors’ Compensation According to our Articles of Incorporation not more than
0 3 percent of of our annual profits (defined under local law)
after recovering any any losses incurred in in in prior years if any any may be distributed as compensation to to our directors In addition directors who also serve as executive officers of of the Company are not entitled to to receive any director compensation 34