Corporate Governance

Corporate Governance Structure

The fundamental philosophy of Qisda is to create profits for shareholders and to contribute to society. The Company supports and promotes transparency and fairness of information transmission, providing a uniform channel for shareholders, customers and stakeholders of the Company to obtain business and financial information of the Company in a timely manner.

Corporate Governance Officer and Continuing Education Status

According to the resolution of the board of directors’ meeting of the Company on August 30, 2019, Chief Financial Officer Jasmin Hung has been appointed to act as the Corporate Governance Officer, equipped with work experience in financial management affairs of publicly listed companies for more than three years.

Jasmin Hung

Vice President and Chief Financial Officer

Corporate Governance Officer

Scope of Authority

Furnishing information required for business execution by directors and the audit committee and providing the latest developments of laws related to corporate management
Assisting directors and the audit committee to comply with laws and regulations
Periodically reporting the corporate governance operational status to the board of directors of the Company
Handling matters related to board meetings and shareholders’ meetings according to laws
Preparing meeting minutes of board meetings and shareholders’ meetings
Assisting in the assumption of duty of directors and audit committee members and their continuing education

2023 Duty Execution

Assisted independent directors and general directors to perform job duties, provided necessary documents and arranged continuing education for the directors.
Provided periodic notices to members of the board of directors about the amendments and developments of the latest laws and regulations related to the field of corporate operations and corporate governance.
Examined the confidentiality level of relevant information and provided company information necessary for directors, maintained the smoothness of communication and exchange among directors and all business supervisors.
After board of directors’ meeting, responsible for verifying the announcements of significant information about important board resolutions in order to ensure the legality and accuracy of the significant information content and to ensure the propriety of the investor transaction information etc.
Every year, help all board members to complete at least 6 credits of continuing education courses.
The Company has applied for liability insurance for directors and important staff, and reported to the board of directors after the renewal of insurance policies.
The Company has completed an external agency evaluation of the performance of the board of directors was carried out, and board meeting to report the evaluation results in November 2021.
Presently, a total of seven board of directors’ meetings and six audit committee meetings have been held in 2023.
One shareholders’ meeting have been held in 2023.
The Company has engaged a board performance evaluation and the evaluation result showed excellence, and Board meeting to report the evaluation results in March, 2023.
Regarding the 2022 9th term of Corporate Governance Evaluation of the Company, the result was 6-20%, and since 2019, the Company has been included in the Taiwan Corporate Governance 100 Index.

Title : Corporate Governance Officer

Name: Jasmin Hung

Job Assumption Date: 2019-09-01

Training Date	Organizer	Course Name	Training Hours	Training compliance with requirements
2024/6/13	Independent Director Association Taiwan	Introduction to IFRS Sustainability Disclosure Standards and the sharing of the worldwide trend of net-zero emissions	3	yes
2024/4/12	Accounting Research and Development Foundation	Practical analysis of the latest "annual report preparation" related ESG sustainability laws and the impact of net-zero carbon emissions on financial statements	6	yes
2024/4/11	Accounting Research and Development Foundation	Latest revision of "Standards for Establishing Internal Control Systems" and Compliance Practices of Internal Audit and Internal Control Laws Related to Financial Statement Preparation	6	yes
2023/12/01	Independent Director Association Taiwan	Tax governance in the new global tax environment	3	yes
2023/11/14	Independent Director Association Taiwan	The group’s M&A strategy and post-investment management	3	yes
2023/08/17	Accounting Research and Development Foundation	How to analyze key corporate financial information and strengthen crisis warning capabilities	6	yes
2023/07/19	Accounting Research and Development Foundation	Controlled Foreign Corporation (CFC) Tax Regulations and Practices	3	yes
2023/07/26	Taiwan Corporate Governance Association	The Board Of Directors's Performance Evaluation Practice Sharing Seminar	3	yes
2023/07/06	Corporate Operating and Sustainable Development	Corporate Governance and Securities Regulations-Executives of the listed companies with the understanding of supervision from governmental authority	3	yes
2023/06/28	Accounting Research and Development Foundation	Analysis of common deficiencies in "financial report review" and important internal control laws and regulations	3	yes
2023/06/02	Accounting Research and Development Foundation	Legal Responsibilities and Case Analysis of "Tax Crime"	3	yes
2023/06/01	Taiwan Investor Relations Institute	Establishment and Key Points of Intellectual Property Management System for Enterprises	3	yes
2022/12/06	Taiwan Corporate Governance Association	Strengthening digital resilience and constructing strategies for strengthening information security governance of listed companies	3	yes
2022/06/30	Taiwan Corporate Governance Association	ESG Reporting Trends and Their Disclosure Business Implications	3	yes
2022/06/28	Taiwan Institute of Directors	2022 Annual Forum of TWIOD- Exploring the core competitiveness of the next generation in the age of drastic changes	3	yes
2022/04/22	Taiwan Institute for Sustainable Energy	Taishin 30 Net Zero Sustainability Summit Forum- Transform to Net Zero	3	yes
2021/11/08	Digital Governance Association	Corporate ethical governance and insider trading control	3	yes
2021/09/01	Financial Supervisory Commission	13th Taipei Corporate Governance Forum	3	yes
2021/08/19	Securities & Futures Institute	Employee remuneration strategy and instrument utilization study	3	yes
2021/04/27	Taiwan Independent Director Association	How boards of directors review ESG sustainability reports	3	yes
2021/04/14	Taiwan Independent Director Association	Merger strategies and corporate transformation tips for boards of directors	3	yes
2020/11/19	Taiwan Institute of Directors	Opportunities and challenges for corporations in the US-China trade war	3	yes
2020/08/18	Taiwan Institute of Directors	Corporate transformation in the reform era	3	yes
2020/07/13	Accounting Research and Development Foundation	How to analyze critical corporate financial information and enhance early crisis warning capability	6	yes
2020/05/28	Accounting Research and Development Foundation	Corporate cooperation with CPA audit in practice: “Audit Evidence” and “Adopting Experts’ Works”	3	yes
2019/11/27	Accounting Research and Development Foundation	Comparison, legal liability and case study of “Economic Espionage” in the US and the “Trade Secrets Act” in Taiwan	3	yes
2019/11/22	Taiwan Corporate Governance Association	Introduction to key aspects of the Fair Trade Act and impact of global anti-trust regulations on Taiwanese enterprises	3	yes
2019/11/21	Securities & Futures Institute	Insider equity trading legal compliance	3	yes

Corporate Social Responsibility and Ethical Management Implementation and Execution Status

It is one of the corporate missions of Qisda to “treat all customers, suppliers, creditors, shareholders, employees and the general public ethically”, which is also the responsibility of all employees of the Company. To implement sound ethical management, the Company has established an ethical management unit and has formed an ethical management task force in accordance with the “Ethical Corporate Management Best Practice Principles” approved by the board of directors. Its members include relevant professionals in the fields of human resources, risk management and auditing. It is responsible for stipulating ethical management policies and preventive programs and supervising the execution thereof, it periodically reports to the board of directors (at least once per year).

Implementation and Execution Status of Ethical Management Policies

“Integrity and anti-corruption” online training courses are promoted annually for the entire company. Course content includes: introduction of the content, key summary and actual case examples of the integrity manual. Course completion tests are conducted to examine the learning outcome of employees. In 2021, for internal and external education and training related to ethical management topics organized (including ethical management legal compliance, trade secrets and company assets, conflict of interest and recusal, and legal compliance related courses), the total number of participants was 20,176 people, for a total of 10,088 hours. It is expected to be reported to the board of directors before the first quarter of the following year.
On November 18, 2021, the Group organized the “Corporate ethical governance and insider trading control” training course and opened the course for directors, managers and employees to participate in. Three hours of education and promotion took place, and the participants have been assisted in acquiring relevant study certificates.

Whistleblowing System and Handling Procedures

In November 2021, Qisda has approved the “Regulations Governing Whistleblowing and Complaints” in order to explicitly specify the internal whistleblowing and complaint filing channels, and to properly maintain and protect the confidentiality of the identity of whistleblowers and the contents of complaints.

External integrity mailbox: Integrity@Qisda.com

Internal HR mailbox: : 2HR@Qisda.com

Material Information Handling and Preventing Insider Trading Implementation and Execution Status

To establish Qisda’s excellent material information handling and disclosure mechanism, to prevent improper disclosure of information, to ensure consistency and accuracy of information released to the outside, and to prevent the occurrence of insider trading, the Company approved the “Procedures for Handling Material Information and Preventing Insider Trading” in August 2009, following which the procedures have been published in the regulations and system section of the internal public folder in order to inform all managers and employees.

Procedures for Preventing Insider Trading Implementation and Execution Status

Qisda implements relevant regulatory education and training on the “Trade Secrets Act” and “Regulations Governing the Prevention of Insider Trading” for the current chairperson of the board, managers and other insiders at least once per year.
1. On June 30, 2023, the Company implemented relevant education and promotion for the current chairperson of the board, managers and other insiders. Course content includes: material information confidentiality operations, causes of insider trading and the determination process and explanations of examples of trading. In addition, relevant course presentation and multimedia files have been provided to relevant personnel for reference.
2. In 2023, the company training course "Prohibition and Prevention of Insider Trading" was held to conduct online education and publicity. This course is a required course for employee education and training, and the employee participation rate is 100%.
3. “Procedures for Handling Material Information and Preventing Insider Trading” refer to the Rules and Regulations column.

When the current new directors of Qisda took up office on May 29, 2023,
1. Company provide “Compliance Brochure for Directors and Supervisors of TWSE/TPEx-Listed and Emerging Market Companies”, “Securities market regulatory matters of the listed companies and their directors, supervisors and major shareholders”. It including various laws and regulations (including management regulations for current insider shareholdings and common violations, Exercise vesting rights for directors, supervisors, managers and major shareholders and prohibit insider trading, etc.) and other notice that the new directors can follow them.
2. The above promotional materials have been provided to the new directors and independent directors of this term and signed for receipt.

The company has reminded the directors not to trade their stocks during the closed period of 30 days before the announcement of the annual financial report and 15 days before the announcement of the quarterly financial report in the monthly lock-up period.
The execution situation in 2023 is as follows：
1. Qisda disclosed the financial report of 2022Q4 on The board of directors on March 6, 2023, company send email to insiders such as directors or employees on January 30, 2023, reminding them that they should comply with insider trading regulations.
2. Qisda disclosed the financial report of 2023Q1 on The board of directors on May 5, 2023, company send email to insiders such as directors or employees on April 14, 2023, reminding them that they should comply with insider trading regulations.
3. Qisda disclosed the financial report of 2023Q2 on The board of directors on August 4, 2023, company send email to insiders such as directors or employees on July 14, 2023, reminding them that they should comply with insider trading regulations.
4. Qisda disclosed the financial report of 2023Q3 on The board of directors on November 9, 2023, company send email to insiders such as directors or employees on October 19, 2023, reminding them that they should comply with insider trading regulations.
The execution situation in 2024 is as follows：
1. Qisda disclosed the financial report of 2023Q3 on The board of directors on March 5, 2024, company send email to insiders such as directors or employees on January 26, 2024, reminding them that they should comply with insider trading regulations.

Risk Management Organizational Structure and Operational Status

In June 2005, the risk management committee (RMC) has been established. The president acts as the chair of the committee, the risk management department assumes the position of general secretary, and all senior supervisors of each department serve as committee members. Meetings are convened quarterly.On August 11, 2020, the board of directors approved the establishment of the “Risk Management Vision, Policy and Procedure”, in order to conduct risk identification and assessment with respect to the four main aspects of strategy, finance, operation, and hazards.

Meetings are convened quarterly to review the risk management results, and reports on the material risk response and control results for the previous year, material risk assessment for the next year and the risk management committee operational status are periodically submitted to the audit committee and board of directors.

Risk Management Committee (RMC) Organization

Risk Management Radar

Risk Management Scope

Establishing annual company-level material risks:

The risk management radar for the new year is generated according to the summary of the four main risk categories of strategy, finance, operation, and hazard, and the president establishes the three main company-level risks. Risks include:
（1）Strategy risks: Such as geopolitics, post-investment management, downward panel trends, etc.
（2）Operation risks: Such as economic reversal, supply chain management, increase of raw material costs, etc
（3）Financial risks: Such as global anti-tax avoidance, asset depreciation, exchange/interest rate impact, etc.
（4）Hazard risks: Such as COVID-19, extreme weather, power supply, etc.

Risk identification:

All committee members identify the annual risk items that may cause the unit to fail to reach the KPI target according to the three significant yearly company-level risks, risk management radar and risk examination form, etc. In addition, analysis and strategy planning are also executed. Identification includes:
（1）The possible worst-case scenario due to the occurrence of the risk.
（2）Risk strategies (kits), expected outcomes of the execution of the strategies.
（3）Setting up key risk indicators (KRIs) as the indicators for the activation of risk strategies (kits).

Operational status:

- In response to COVID-19 in 2022, RMC temporary meetings were held with more than 48 meetings. Qisda cooperated with the government's policy to implement epidemic monitoring, effectively control the positive diagnosis rate of Taiwanese companies up to 4.3% in a week, and avoid business interruption.
- Add annual "Risk Management Education and Training" for all employees to strengthen the risk culture awareness of employees in the company. Qisda incorporates climate change issues into the annual risk physical examination form, asks each first-level unit to assess the entity and transition risks of climate change, expands the risk assessment scope, and meets the trends and requirements of ESG & TCFD.
- The operation and implementation of risk management in 2022 has been reported to the board of directors on March 6, 2023.

Intellectual Property Management Plan

1. Qisda emphasizes technological innovation and development. Intellectual property is the core for corporations to protect research and development results, meaning that core competitiveness can only be protected through the proper implementation of a system related to intellectual property. Accordingly, the Company has established an intellectual property management system based on its operational strategy in order to focus on the quality of patents.

2. To cope with the operational strategy for executing new business operations and to prevent the risk of patent litigation after products reach a certain economic scale in the future, the Company has established an intellectual property management system in order to focus on patent risk control. Through technical information analysis of patents, we are able to establish the most optimal strategy, thereby reducing operational risks.

Intellectual Property Management Plan Execution Status

- As of September 2022, Qisda has applied for more than 12,000 patents and has been granted 7,056 patents. Presently, the Company owns more than 1,201 valid patents, including 306 patents in the US, 303 patents in Taiwan, and 592 patents in the People’s Republic of China.
- In 2021, the Company implemented the Taiwan Intellectual Property System (TIPS). To achieve the legal compliance of corporate governance, the Company has established an intellectual property plan linked to its operational targets according to the requirements of Item 2.27 of the Corporate Governance Evaluation Indicator, and patents have been set as the subject matter of the intellectual property management for the current year, in order to enhance intellectual property management operations, including intellectual property management documentation and standardization management, promotion of cross-department communication and cooperation, establishment of a positive cycle of intellectual property management and R&D processes in terms of the aspect of intellectual property. Through this, the R&D value and accumulated R&D energy of the Company can be increased, while effectively transforming R&D results into corporate intellectual property assets in order to serve as the basis for the sustainable operation of the Company. In 2022, the application for TIPS revalidation was submitted and passed, and the certificate is valid until December 31, 2024.
- The 2022 execution status has been reported in the board of directors’ meeting on November 2022.