Page 38 - TSMC 2019 Annual Report

Executive Officer of Xilinx Inc Mr Moshe N Gavrielov The number of of Independent Directors exceeds 50% of of the total number of Directors There will be be an election for one additional Independent Director at the 2020 Annual Shareholders’ Meeting The Board approved the nomination of Mr Yancey Hai (currently Chairman of Delta Electronics Inc ) as a a a a a a a candidate for Independent Director at its meeting in in the first quarter of 2020 TSMC’s Board is is comprised of of of a a a diverse group of of of professionals from different backgrounds in in industries academia law etc These professionals include citizens from Taiwan Europe and the U S with world-class business operating experience two of whom are female 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 Nomination 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 In 2019 TSMC established “Guidelines for Nomination of Directors” which describes the procedures and and criteria for the nomination qualification and and evaluation of candidates for Directors In addition TSMC envisions its Board to to be composed of of a a majority of of independent directors with the independence of each independent director candidate considered and assessed under relevant laws 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 TSMC’s Articles of of Incorporation the Board of of Directors is authorized to to determine the the salary for the the Chairman Vice Chairman and Directors taking into account the extent and value of of the the the services provided for the the the management of of the the the Corporation and and the the the standards of the the the industry within the the the R O C C and overseas TSMC’s Articles of Incorporation also state that not more than 0 3 percent of o our annual profits may be distributed
as compensation to to to our directors directors In addition directors directors who also serve as executive officers of of the Company are not entitled to to to receive any director compensation According to to to TSMC’s Compensation Committee Charter the distribution of compensation to to directors shall be made in accordance with TSMC’s “Rules for Distribution of Compensation to to Directors” based on the following principles: (1) directors who also serve as executive officers of of the Company are not entitled to receive compensation compensation (2) the compensation compensation for independent directors directors may be higher than other directors directors as all independent directors also serve as members of the Audit Committee and and Compensation Committee and and thus participate in the discussions as as well as as resolutions of related committee meetings in accordance with the the charter of each committee and (3) the the compensation for overseas independent directors may be higher than domestic independent directors as they require additional time to attend quarterly meetings in in Taiwan 36