Corporate Governance on Performance

Information on directors

Information disclosure of directors’ professional qualification and independent directors’ independence

1. 1. Not a government, corporate, or its representative as defined in Article 27 of the Company Act.
2. 2. Not serving as an independent director of more than three other public companies
3. 3. There is not any of the following circumstances occurred during the two years before being elected or during the term of office:
• (1)An employee of the company or any of its affiliates;
• (2)A director or supervisor of the company or any of its affiliates (However, it does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.);
• (3)A natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate of 1% or more of the total number of issued shares of the company or ranking the top-10 in shareholdings;
• (4)A spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer in subparagraph 1 or any of the persons in subparagraphs (2) and (3);
• (5)A director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director of the company under Article 27, of the Company Act;
• (6)A director, supervisor, or employee of a company that has a majority of its director seats or voting shares controlled by the same person as those of the company;
• (7)A director (executive), supervisor (supervisor) or employee of another company or institution who is the same person or spouse of the company’s Chairman, President, or person with equivalent positions;
• (8)A director (executive), supervisor (supervisor), managerial officer, or shareholder holding 5% or more of the shares of a specified company or institution that has a financial or business relationship with the company;
• (9)A professional individual who, or an owner, partner, director (executive), supervisor (supervisor), or managerial officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the company’s remuneration committee;

Specific management goals of the board of directors diversity policy and current achievement:

1. 1. Board diversity

   According to Article 20 of the company’s “Corporate Governance Best Practice Principles,” the diversity of board directors shall be considered at the time of its composition. Board directors with diverse backgrounds and perspectives shall be selected based on the company’s operations, nature of business, development needs, etc., which include but not limited to gender, age, nationality, culture, professional background (such as law, accounting, industry, finance, marketing, and technology), professional skills, industrial experience, etc. The election of the company’s directors is stipulated in Article 2 of the “Procedures for Election of Directors” with the overall composition of the Board of Directors taken into consideration. In addition, the company appreciates the importance of gender equality in the composition of the Board of Directors. There are currently 10 directors on the Board of Directors to serve, including 4 female directors, which accounted for 40% of the board members. The company also evaluates the management capabilities, crisis management ability, financial accounting professional, and many other aspects at the time of electing board directors. There should be at least 3 people qualified for each competency item in order to substantiate the company’s policy of board director diversity. The specific implementation is as follows, all of which are in line with the company’s management objectives:

   In addition, candidates to be considered for the nomination of board directors shall also have a reputation of ethics and integrity, have outstanding achievements, experience, and reputation in various professional fields, be able to devote sufficient time to participate in supervising the company’s business, have the ability to assist in operation and management, can make contributions to the success of the company, etc. The qualifications of independent directors should comply with the governing law and regulations.

2. 2. Specific management objectives:

   The company’s Board of Directors should guide the company’s strategy, supervise the management, and be responsible to the company and shareholders. It is necessary to ensure that the Board of Directors has the operations and arrangements of the corporate governance system implemented in accordance with law and regulations, the company’s Articles of Incorporation, or the resolutions of the shareholders’ meeting. In addition, the diversity of board directors should be considered at the time its composition with the company’s operation, business model, and future development trends taken into consideration. Regarding the diversified professional knowledge and skills, there should be at least 3 people qualified for each competency item. In addition, gender equality in the composition of the Board of Directors is also essential to the company. The goal is to have at least 3 female directors elected.

3. 3. The current achievement status and overall capabilities of the board of directors are as follows

   HIWIN’s board directors have extensive experience and expertise in finance, business, and management. In addition, the company appreciates the importance of gender equality in the composition of the Board of Directors. There are currently 10 directors on the Board of Directors to serve, including 4 female directors, which accounted for 40% of the board members. The company also evaluates the management capabilities, crisis management ability, financial accounting professional, and many other aspects at the time of electing board directors. There should be at least 3 people qualified for each competency item in order to substantiate the company’s policy of board director diversity. The specific implementation is as follows, all of which are in line with the company’s management objectives:

   Management objectives	Achievements
   Sufficient and diverse professional knowledge and skills	Achieved
   Three female board directors	Achieved

The company’s implementation of the board director diversity policy is as follows:

Note: The industry category is classified in accordance with Level-1 industry sector of the GICS Global Industry Classification Standard.

Succession Planning and Operations for Board Members

1. 1. The structure of HIWIN Technologies' Board of Directors is determined based on the scale of business development and the shareholding of major shareholders, taking into account practical operational needs.
2. 2. The election of HIWIN Technologies' directors follows the candidate nomination system as stipulated in the Articles of Incorporation (each term lasts three years). The "Corporate Governance Best Practice Principles" and "Director Election Procedures" specify that the composition of the Board should consider diversity, with guidelines formulated based on the company’s operations, business model, and development. These guidelines include, but are not limited to, two major aspects: fundamental qualities and values, and professional knowledge and skills.
3. 3. HIWIN Technologies' director succession plan is built upon a candidate database based on the following criteria:

   - Integrity, innovation, and decision-making capabilities aligned with the company’s core values.
   - Each board member is expected to contribute to a diverse and development-oriented board.
   - The overall expertise of the Board includes corporate strategy and management, accounting and taxation, finance, law, and agility.
   - The selection process for director candidates strictly adheres to relevant regulations and rigorous review procedures to ensure that suitable new directors can be identified and appointed when vacancies arise or expansion is planned.
   

4. 4. HIWIN Technologies has established the "Board Performance Evaluation Measures," which assess the effectiveness of the Board through various metrics, including control over company goals and missions, understanding of responsibilities, internal relationship management and communication, professional competence and training, internal controls, and expression of concrete opinions. These evaluations serve as a reference for future director selection.
5. 5. HIWIN Technologies was founded in 1989 by Mr. Eric Y.T. Chuo, who served as both Chairman and President. On July 1, 2008, Ms. Enid H.C. Tsai succeeded as President, and on July 1, 2019, Mr. Eddie W. H. Chuo succeeded as Chairman. This reflects a planned and strategic succession. To support the company’s development and global expansion, a succession team has been built based on daily operations and the principle of collaboration among individuals with different traits and expertise.

Succession Planning and Operations for Key Management Personnel

1. 1. HIWIN Technologies defines key management personnel as those at the Associate Vice President level and above. These individuals must understand the company’s vision and mission and share responsibility for business development. Each management level has designated deputies. In addition to professional competence and leadership, key managers must embody the company’s core values: professional standards, work passion, and professional ethics.
2. 2. To cultivate key management personnel and their deputies, training focuses on industry-specific expertise, corporate governance, and core competencies such as self-reflection, embracing change, and crisis management. This ensures the team remains current in leadership, management, technology, innovation, and industry trends.
3. 3. Through performance evaluations, diverse training, knowledge transfer, job rotation, and overseas assignments, HIWIN aims to objectively and comprehensively select suitable candidates to become managers in various fields and build a robust succession pipeline.
4. 4. HIWIN conducts consensus-building workshops for mid- to high-level managers at least once a year. These workshops focus on strategic planning and include topics such as systems thinking, high-performance leadership, organizational change and renewal, change management, strategic thinking, talent development and leadership succession, strategy mapping, and leadership development systems.

Responsibilities of the Sustainability and Information Security Committee

Authorized by the Board of Directors, the Committee shall, with the due care of a prudent manager, faithfully perform the following duties and report or submit matters to the Board for discussion, in order to advance corporate sustainability development, enhance information security governance, and achieve sustainable operations:

1. 1.Formulating the Company’s sustainability development direction, strategies, and objectives, as well as establishing related management guidelines and implementation plans.
2. 2.Tracking, reviewing, and revising the execution and performance of sustainability development initiatives.
3. 3.Supervising sustainability disclosure matters and reviewing the sustainability report.
4. 4.Monitoring existing and potential sustainability issues of the Company, including climate change, natural capital, and biodiversity.
5. 5.Formulating the Company’s information security strategies and objectives, and supervising the implementation of information security management systems, technical standards, and operational procedures.
6. 6.Supervising the Company’s implementation of the Sustainability Best-Practice Principles, and other matters as resolved by the Board of Directors.

The operation of the Sustainability and Information Security Committee

The Sustainability and Information Security Committee consists of three members.

Members of the Sustainability and Information Security Committee

Responsibilities of the Audit and Risk Management Committee

Audit and Risk Management Committee is formed by 3 independent directors currently, who are responsible of executing and auditing the fair presentation of the Company’s financial statements, the selection (dismissal) of CPAs and their independence and performance, the effectiveness of implementation of the Company’s internal control, compliance with the related laws and rules, as well as the control over existing or potential risks in the Company. Committee Chairperson and Independent Director Cheng-He Chiang, Independent Director Zhen-Yuan Chen, and Independent Director Li, Hui-Hsiu are expertise in financial, accounting and industry knowledge, which conform to the professional competence required for the Committee. The main responsibilities of the Committee are below:

1. (1) Amend the internal control system in accordance with Article 14-1 of the Securities and Exchange Act.
2. (2) Assess the effectiveness of internal control system.
3. (3) Establish or amend the procedure of material financial business conducts such as acquiring or disposing of assets, trade on derivative goods, capital loans to others, and endorsement or guarantee for others, in accordance with the provisions set forth in Article 36-1 of the Securities and Exchange Act.
4. (4) Matters involving self-interests of the directors.
5. (5) Material asset or derivate goods trading.
6. (6) Material capital loan, endorsement or provision of guarantee.
7. (7) Fund raising, issuing, or private offering of equity-based negotiable securities.
8. (8) Engagement, dismissal, or compensations of CPAs.
9. (9) Appointment and dismissal of financial, accounting or internal audit officer.
10. (10) Annual and semi-annual financial reports.
11. (11) Review risk management policies, procedures, and frameworks; regularly assess their applicability and effectiveness. Approve the company’s risk appetite (risk tolerance) to guide resource allocation. Ensure that the risk management mechanisms adequately address the risks faced by the company and are integrated into daily operational processes. Approve the prioritization and classification of risk controls. Review the implementation of risk management activities, propose necessary improvements, and report to the Board of Directors at least once a year. Assist the Board in overseeing the effectiveness of the company’s risk management.

(12) Other major issues under the regulations of the other companies or competent authorities.

2024 Audit Committee’s Discussion items including the following:

1. (1) Audit of financial statements and accounting policies and procedures.
2. (2) Assess the effectiveness of internal control system.
3. (3) Amend the internal control system and management procedures
4. (4) Material acquisition of assets, loaning of funds, and endorsement/guarantee.
5. (5) Qualification, independence, and competence for CPAs.
6. (6) Appointment and remuneration of CPAs.
7. (7) Legal compliance.
8. (8) Fraud prevention plan and fraud investigation.
9. (9) Water risk management policy

The operation of the Audit and Risk Management Committee

The Audit and Risk Management Committee consists of three members.

Members of the Audit and Risk Management Committee

Responsibilities of the Remuneration and Nomination Committee

To assist the Board of Directors in the selection of directors and senior executives, the performance evaluation, and the periodic review of policies, systems, standards, and structures related to remuneration, the Remuneration and Nomination Committee shall, with the duty of care of a prudent manager, faithfully perform the following duties and submit its recommendations to the Board of Directors for deliberation:

1. 1. Periodically review the organizational charter and the Corporate Governance Best Practice Principles, and propose amendments as necessary.
2. 2. Establish and periodically review the policies, systems, standards, and structures concerning the performance evaluation and remuneration of the company’s directors and senior executives.
3. 3. Regularly evaluate and determine the remuneration of the company’s directors and senior executives.
4. 4. Develop the composition requirements and qualification criteria for Board members and senior executives, and select and review candidates for directors and senior executives.
5. 5. Plan and implement performance evaluations for the Board of Directors, its functional committees, individual directors, and senior executives.
6. 6. Plan and implement training and continuing education programs for directors.

The operation of the Remuneration and Nomination Committee

The Remuneration and Nomination Committee of the Company consists of three members.

Members of Remuneration and Nomination Committee

To promote sustainable development, the Company established a CSR Committee in 2014, which was renamed the ESG Committee in 2021 and further renamed the ESG Executive Committee in 2025. President Enid H.C. Tsai shall serve as the Chairperson of the ESG Executive Committee in her capacity as Chief Sustainability Officer, responsible for overseeing the Company’s overall ESG strategy and sustainability initiatives. The ESG Executive Committee holds monthly meetings to address key sustainability topics across environmental, social, and governance dimensions, ensuring the effective management of material ESG issues. In principle, the committee reports its progress, outcomes, and future goals to the Board of Directors four times a year.

The committee is composed of the highest-level executives from relevant departments, including Executive Office, R&D Dept., Production Group, Administration Dept., Environmental Protection Dept., Human Resource Dept., Finance Dept., and Corporate Planning.

In 2024, the ESG Executive Committee reported to the Board of Directors in February, May, August, and November. The reports covered:

1. (1) Key sustainability issues of concern and corresponding response measures.
2. (2) Oversight of the implementation of sustainability initiatives and evaluation of their performance.

Following the presentations, board members provided recommendations for the ESG Executive Committee’s consideration, which also serve as references for the management team in strategic adjustments.

1. 1. Establish cross-functional working groups to implement concrete ESG action plans.
2. 2. Hold monthly meetings to regularly review the achievement of ESG targets and propose corrective actions and adjustments to resource allocation.
3. 3. Coordinate the preparation and review of the sustainability report, aligning the structure with GRI and SASB standards, and ensure third-party assurance to guarantee the accuracy and credibility of disclosed information.
4. 4. Support the identification of material ESG issues—including climate change, biodiversity, human rights, and information security—and conduct risk assessments and control measures accordingly.