Corporate Governance

The Board consults with staff, advisers, regulators, and other stakeholders when identifying key resources and relationships on which the business relies.

The Board is led by the Chairman and comprises nine members: six Directors and three Independent Directors. The selection and appointment of board members are based on business judgment, accounting and financial analysis, business management, crisis handling, industry knowledge, international market outlook, leadership, and decision-making capabilities. Each Board member has experience across multiple industrial fields. The skills and experience of each director are described on the website above.

The Chairman is responsible for leadership of the Board, ensuring its effectiveness in all aspects of its role, setting its agenda, and ensuring that the Directors receive accurate, timely, and clear information. The Chairman also ensures effective communication with shareholders and facilitates the effective contribution of the other Directors and Independent Directors. The shareholders have the ability to choose and appoint the Directors, and they can be re-elected. There shall be independent directors in the aforementioned number of directors, and the number of independent directors shall not be less than three and shall not be less than one-fifth of the number of directors.

The Company has listed its directors and independent directors on the website above.

For further information, please refer to Chapter IV: Directors in the Company’s Corporate Governance.

The Audit Committee

According to the “Organization Regulations of the Audit Committee”, the committee is composed of all independent directors, and its main purpose is to supervise the following matters:

1. Fair representation of the Company’s financial statements.
2. Selection (dismissal), independence, and performance of certified accountants.
3. Effective implementation of the Company’s internal control.
4. The Company follows relevant laws and regulations.
5. Management and control of existing or potential risks of the Company.

Remuneration Committee

According to the “Organization Regulations of the Remuneration Committee”, the committee is currently composed of all Independent Directors. The Committee shall, with the attention of good managers, faithfully perform the following functions and powers, and submit its recommendations to the Board of Directors for discussion:

1. Regularly review the regulations and make suggestions for amendments.
2. Formulate and regularly review the performance evaluation standards, annual and long-term performance goals, and remuneration policies, systems, standards, and structures of the Company’s Directors and managers, and disclose the content of the performance evaluation standards in the annual report.
3. Regularly evaluate the achievement of the performance objectives of the directors and managers of the Company and determine the content and amount of their individual salaries based on the evaluation results obtained from the performance evaluation standards. The annual report shall disclose the individual performance evaluation results of directors and managers, and the relevance and rationality of the content and number of individual salaries and performance evaluation results for reporting at the shareholders’ meeting.

The Company’s internal audit work is mainly carried out in accordance with the audit plan approved by the Board of Directors. The audit plan is formulated based on the identified risks, and ad hoc audits are also carried out as necessary.

1.    Organization of internal audit

The internal audit of the Company is an independent unit directly under the Board of Directors. Its purpose is to assist the board of directors and managers to check and review the deficiencies of the internal control system, measure the effectiveness and efficiency of operations, and provide timely improvement suggestions. The internal audit ensures the internal control system can be continuously and effectively implemented and serves as the basis for reviewing and revising the internal control system.

The appointment and dismissal of the audit supervisor are agreed upon by the audit committee first, then submitted to the board of directors for approval. The approval decision shall be reported through the Internet information system for future reference.

The qualifications of internal auditors shall meet the statutory qualifications, and the auditors shall fulfill the required hours of continued education. The name, age, educational background, experience, years of service, and training of internal auditors shall be reported through the Internet information system in accordance with the prescribed format for future reference.

2.    The operation of the internal audit

The auditors of the Company uphold the spirit of detachment and independence, take an objective and impartial stand, and perform their duties with due diligence. The Company’s internal audit supervisor regularly reports audit results to independent directors and is required to attend and present at the board of directors meetings.

The audit work includes checking and reviewing the adequacy and effectiveness of the internal control system of each department of the Company and measuring the performance of operating activities. The scope of the audit includes: 

1. Develop an annual audit plan based on risk assessment.
2. Supervise and urge all units to formulate internal control systems and strictly abide by them.
3. Review the design and implementation of internal controls to reasonably ensure that operational objectives are achieved.
4. Review the self-assessment work performed by each unit.
5. Other laws and regulations should be implemented.

3.    Appointment and dismissal, evaluation, and remuneration of internal audit

The appointment and dismissal, evaluation, and remuneration of auditors are handled in accordance with the Company’s “Recruitment and Appointment Management Regulations”, “Performance Appraisal Management Regulations”, and “Remuneration Management Regulations”.

The Company is engaged in derivatives trading, and its risk management scope and risk management measures to be adopted are as follows:

1. Credit risk management: The object of the transaction is limited to financial institutions and futures brokers with a good reputation and the ability to provide professional information.
2. Market price risk management: The possible losses arising from future market price fluctuations of derivatives are uncertain. Therefore, the stop loss setting should be strictly adhered to after the position is established.
3. Liquidity risk management: To ensure the liquidity of trading commodities, the financial products with higher liquidity are mainly selected. The financial institutions entrusted with transactions must have sufficient equipment, information, and trading capabilities, and can conduct transactions in any market.
4. Cash flow risk management: To ensure the stability of the Company’s working capital turnover, the Company’s source of funds for derivatives trading is limited to its own funds, and its operating amount should consider the funding needs of the forecast cash receipts and payments in the next three months.
5. Operational Risk Management:
   1. Should strictly abide by the authorization limit and operating procedures, and include internal audit operations to avoid operational risks.
   2. Traders engaged in derivatives and confirmation, delivery, and other operators shall not concurrently serve each other’s roles.
   3. Risk measurement, supervision, and control personnel shall belong to different units from the above-mentioned personnel and shall report to the board of directors or to senior executives who are not responsible for transactions or position decision-making.
6. Legal Risk Management:
   1. Any contract documents signed with financial institutions should use international standard documents as much as possible to avoid legal risks.
   2. Non-standardized documents signed with financial institutions should be inspected by professionals from foreign exchange and legal or legal counsel before they can be formally signed.
7. Commodity risk management:
   Traders should have complete and correct professional knowledge about the derivative products to be traded and require financial institutions to fully disclose product risks to avoid losses caused by the misuse of derivative products.

Regular evaluation method and abnormal situation handling

1. The position held by the financial unit engaged in the derivatives exchange shall be assessed at least once a week, but if it is necessary for the business to conduct hedging transactions, it shall be assessed at least twice a month, and the assessment report shall be submitted to the senior executive authorized by the Board of Directors.
2. Supervise the transaction and profit and loss situation and take necessary countermeasures when any abnormality is found. Authorized senior executives shall report to the board of directors immediately to decide whether to terminate the relevant transaction contract.

Internal Audit System

The Company’s internal auditors should regularly understand the adequacy of the internal control of derivatives transactions and audit the transaction department’s compliance with the processing procedures for derivatives transactions on a monthly basis and prepare audit reports. If any major violations are found, they should be notified in writing to each independent director.

Create a reference book

When the Company engages in derivative commodity transactions, it shall establish a “reference book”, and the types, amount, date of approval of the board of directors, and matters that should be carefully evaluated shall be posted in the reference book.

Article of Incorporation

Article of Incorporation

Key Rules and Regulations

• Rules and Procedures of Shareholders Meeting
• Procedures for Ethical Management and Guidelines for Conduct
• Ethical Corporate Management Best Practice Principles
• Regulations of Managing Material Information & Preventing Insider Trading
• Rules of Renumeration Committee
• Rules of Audit Committee
• Procedures for Endorsement & Guarantee
• Election Procedures for Directors and Independent Directors
• Rules and Procedures of Board of Director Meetings
• Methods for Board of Director Performance Review
• Procedures for Lending Funds to Other Parties
• Corporate Governance Best Practice Principles
• Procedures for Acquisition or Disposal of Assets