Page 50 - TSMC 2020 Annual Report

Assessment Item
Implementation Status
Non- implementation and Its Reason(s)
Yes
No Explanation
3 Composition and Responsibilities of of the Board of of Directors (1) Has the the Company established a a a a a diversification policy for the the composition
of of its Board of of Directors and has it it been implemented accordingly?
(2) Other than the the the Compensation Committee Committee and the the the Audit Committee Committee which are required by law does the the Company plan to set up other Board committees?
(3) Has the the Company established methodology for evaluating the the performance of of its Board of of Directors on an an an annual basis reported the results results of of performance to to the the Board of of Directors and use the the results results as reference for directors’ remuneration and renewal?
None
V V V (1) (2) (3) TSMC established “Guidelines for Nomination of Directors” which describes the the procedures and and criteria for the the nomination qualification and and evaluation of of of candidates for Directors Directors The members of of of TSMC Board of of of Directors Directors are nominated via a a a rigorous selection process It not only considers diverse backgrounds professional competence and experience but also attaches great importance to his/her personal reputation on on on ethics and leadership Presently the Company’s Board of of Directors consists of of ten members who possess world-class managerial and/or professional experiences We rely on on each directors’ knowledge personal insight and business judgment TSMC’s Board is is comprised of of of a a a diverse group of of of professionals from different backgrounds in in in industries academia law etc These professionals include citizens from Taiwan Europe and the U S with world-class business operating experience one
of whom is female Our Board has six independent directors who who constitute 60% of the Board Audit Committee Committee (founded (founded in in 2002) Compensation Committee Committee (founded (founded in in 2003) ESG Steering Committee (founded in in 2019): is formed by the Company’s management team and chaired by Chairman Mark Liu ESG Committee (founded in 2011): is formed by the Company’s executive team and reports to to the Board of Directors As TSMC’s corporate governance concept the Board of Director’s primary responsibility is is to supervise evaluate the management’s performance and dismiss officers of of the the Company when necessary resolve the the important concrete matters and provide guidance to the management team TSMC’s Board of of of Directors consists of of of distinguished members with a a a a great breadth of of of experience as as world-class business leaders or or professionals and adhere high ethical standards and and commitment to the Company Each quarter’s Board Meeting is last for two days Company’s resolutions are determined in in in board meeting also business strategy and future orientation are discussed in in in the meeting in in in order to create best interest for shareholders Based on on TSMC’s operating performance and local/international awards of best corporate governance it certainly proves the Company’s excellent performance of of Board of of Directors TSMC implemented Board performance evaluations in 2020 Through self- assessment surveys via questionnaire performance evaluation will be annually completed by by by the the Board as a a a a a whole by by by individual directors and by by by the the Audit Committee The Board of Directors are assessed on the following five aspects: 1 Involvement in the Company’s operation
2 Enhancement of of the the quality of of the the board’s decision-making
3 Makeup and structure of the board 4 Election of board members and continuing knowledge development 5 Internal controls
The individual directors are assessed on the following six aspects: 1 Understanding of the Company’s goals and and mission
2 Awareness of director’s duties 3 Involvement in the Company’s operations
4 Internal relationship and communication
5 Director’s professionalism and continuing knowledge development 6 Internal controls
The Audit Committee is assessed on the following five aspects: 1 Involvement in the Company’s operation
2 Awareness of the audit committee’s duties 3 Enhancement of of the the quality of of the the audit committee’s decision-making
4 Makeup of of the audit committee and election of of its members 5 Internal controls
The Company completed self-assessments of Board performance in 2020 and reported the the results to to the the Board of Directors at its first quarter meeting in 2021 for for review and improvement The weighted average score for for the overall performance of of of the board of of of directors is 4 85 out of of of 5 5 that included an an average score of 4 8 on a a a a a a a a particular assessment item “The board has sufficient discussions over the the company’s involvement in in the the implementation of CSR/ESG programs” The weighted average score for for the the performance of the the individual directors is 4 91 out of 5 As demonstrated the overall board’s operation
has been effective Members of the Audit Committee’s self-assessment results also 100% satisfied with the evaluation criteria The Audit Committee annually evaluates the independence of external auditors and reports the the same to to to to the the Board of Directors Please refer to to to to “3 9 4 Evaluation of of the External Auditor’s Independence” on on page 59 of of this Annual Report (4) Does the Company regularly evaluate its external auditors’ independence?
V (4) 048
(Continued)