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| Corporate Governance – Guidance |
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D. Audit Committee
| Audit Committee Members
Yuanta Core Pacific Securities' Audit Committee is composed of five directors, of which two are independent directors, and other members are selected by the board. |
At least one of the independent directors referred to in the preceding subparagraph shall have professional expertise in securities, derivatives, accounting or finance.
The independent directors shall be granted a term of three years, which shall be eligible for renewal. The length of independent directors for audit committee members is no more than 9 years.
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Frequency and Length of Audit Committee Meetings
The Audit Committee shall hold a meeting no less than once every two months and one may be convened at any time in the event of an emergency.
The functions and duties of the audit committee
- Examination of the accounting system, financial conditions, and the procedure for company financial reports
- Review of the procedures for major financial and business transactions such as acquisition or disposition of assets, engagements in derivatives transactions, loans to others, and endorsement or provision of guarantees for others
- Communication with the CPAs of the company
- Examination of the constitution and revision of internal the control system
- Examination of the internal control of the company, which includes assessment of internal control system, nomination for suitable audit management candidates and the examination of the internal auditors and their performance.
- Assessment, inspection, and monitoring of the existence and threat of risks of all kinds
- Inspection of law compliance by the company which includes examination of material lawsuits, the policy of obeying the laws and regulations and reports or queries asked for by the authorities with the relevant department managers.
- Review of the transactions where voting shall be disqualified due to conflicts of interest affecting directors, including material related-party transactions, acquisition or disposition of assets, engagement in derivatives transactions, loans to others, and endorsement or provision of guarantees for others
- Assessment of the qualifications of CPAs and the nomination of qualified candidates
- Rules for the Proceedings of Board Meetings and the Decision-making Procedures
It is advisable to hold a board meeting no less frequently than once every two (2) months so as to meet the needs of the business. A board meeting may be convened at any time in the event of an emergency.
The company shall adopt the rules for proceedings of board meetings and report the same to the shareholders so as to enhance the operational efficiency and decision-making capability of the board. The rules shall include:
- The meeting notice
- Preparation of attendance sheet and other documents
- The principle for deciding the location and time of a board meeting
- The chairman of the meeting of the board and observers
- The sound recording and videotaping of the proceedings of the board meeting
- The convening of the board meeting, discussions of the proposals, directors' statements, directors' vote, supervision of the voting and calculation of the votes
- Any voting right calculation formula inconsistent with these principles
- Meeting minutes, the signature thereupon and other matters
- Disqualification by directors due to conflicts of interest and delegation of power by the board of the directors.
Updated: June 9, 2004
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