A Sincere Partner in Governance
Corporate Governance and Ethical Corporate Management
Our corporate governance is rooted in integrity and transparency. The PChome team prioritizes the interests of all stakeholders, complies with relevant laws and regulations, and implements internal control mechanisms to fulfill our obligations to all stakeholders.
Board of Directors
As the highest level in PChome’s organizational structure, the Board consists of 7 directors (including 1 female director, and all 9 director seats will be filled in the annual general meeting in June 2023, in which 2 directors will be female), and 2 independent directors, all serving three-year terms. Chairman Hung-Tze Jan is the founder of PChome and is a key figure in the Taiwanese e-commerce sector. Chairman Jan is revered for his insightful views on the Internet and social trends. Under his leadership, PChome has overcome many challenges over the years and enjoyed robust growth in revenue and size. Each Board member has a wide range of expertise and practical experience and is recruited for their professional background and outstanding performance in their respective industry to ensure a diversified Board. There are no age, gender, nationality, and cultural restrictions for directors, and gender equality is emphasized when planning the Board’s composition. Please refer to our Annual Report for further information on the educational background and concurrent posts of each Board member and election regulations.
Annual Report: https://corp.pchome.tw/en/investor-relations/annual-reports/
Introduction to board of directors: https://corp.pchome.tw/en/investor-relations/board-of-directors/
The Board convenes at least four meetings annually (9 meetings were held in 2022). The Board was reelected in 2021, and the average attendance rate of new members was 94.4%. In addition, the board of directors adopted the resolution to appoint a corporate governance officer on May 15, 2023, and corporate governance officer is responsible for providing information required for Board operations, handling affairs related to Board and shareholder meetings, and producing the meeting minutes, so as to guarantee the rights of shareholders and strengthen the functionality of the Board.
Evaluating the Performance of the Board
Beginning in 2022, to improve the operational efficiency and governance quality of the Board, PChome began to implement a system to evaluate the performance of the Board. The Rules on Performance Evaluation of the Board of Directors of PChome Online Inc. were formulated as per the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and were passed by the Board on May 13, 2020. According to these rules, performance evaluation is carried out at least once annually through internal selfreports by the Board, directors’ self-assessments, peer assessments, and other appropriate means. The results are submitted to the Board for discussion and improvement, and the outcomes are disclosed in our annual report. We used a questionnaire to conduct the 2022 Board Performance Self-Evaluation according to the rules above, in which evaluation results are presented in 5 levels, 1 is extremely poor (strongly disagree), 2 is poor (disagree), 3 is average (neither agree nor disagree, 4 is good (agree), and 5 is excellent (strongly agree). A questionnaire was distributed at the board meeting on March 20, 2023 to compile statistics of self-evaluation results, and will serve as a blueprint for future developments. The self-evaluation results this year are as follows:
PChome’s board of directors established two functional committees, namely the “Audit Committee” and “Remuneration Committee” to strengthen board functions. The committees exercise their powers with authorization from the board of directors, and report proposals for the board of directors to consider when making decisions.
PChome’s Audit Committee comprises three independent directors (two were independent directors as of December 31, 2022), in which Independent Director Tan Hochen was nominated as the convener. The committee convenes at least one meeting every quarter. They ensure that the data in the Company’s financial reports are presented appropriately, decide on the appointment and removal of auditors, evaluate auditor independence and performance, implement effective internal controls, ensure legal compliance, and mitigate and manage the Company’s existing or potential control risks. Seven audit committee meetings were held in 2022, with a 77.78% attendance rate among committee members. Please refer to the Company’s annual report for details on selection regulations and powers of the Audit Committee.
(1) Formulating and monitoring the performance-evaluation and remuneration policy, system, standards, and structure for directors and managers;
(2) Preparing and regularly evaluating the remuneration packages of directors, supervisors, and managers.
Conflict of Interest Management
PChome’s Rules of Procedure for Board of Directors Meetings and Audit Committee Charter contain provisions on avoiding conflict of interest, in order to ensure independence. Parties that have a conflict of interestNote with an agenda item recuse themselves when discussing and voting on the agenda item during board meetings. Directors are required to explain the interest they or the entity they represent have in any agenda items during the board meeting. If there is a potential conflict of interest, they may not participate in the discussion or voting, and should also recuse themselves. Nor may they vote on other directors’ behalf. The names of the directors, description of important contents, and recusal are specified in the meeting minutes.
PChome’s Code of Integrity Management, Management Regulations for Related Party Transactions, Code of Ethical Conduct for Directors and Managers, and Code of Ethics for Employees contain provisions on avoiding conflict of interest, and the implementation status of the Code of Ethics for Employees is reported to the Audit Committee.
The Stakeholders section on PChome’s company website discloses regulations and information in detail and serves as a channel for communicating with stakeholders. The Company also has a spokesperson and e-mail with dedicated personnel responsible for questions and recommendations from stakeholders.
(Note: The definition of a “conflict of interest” is according to Article 206 of the Company Act.)
Stakeholders Section: https://corp.pchome.tw/en/corporate-social-responsibility/stakeholder-communication/
Conflicts of Interest of the Board of Directors
Payeasy Digital Integration Co., Ltd. planned a capital increase in May 2022 in response to its capital market plans, in order to optimize its shareholding structure and strengthen business development. Director Hung-Tze Jan recused himself due to a conflict of interest and did not participate in the discussion and resolution of the agenda item.
Remuneration Policy for Directors/Senior Managers
Performance evaluations and remuneration of directors and managers are set by the Remuneration Committee, and should take into consideration industry standards, the time input by the individual, duties, achievement of individual goals, performance in other positions, and remuneration provided by the Company to others at the same job level. The Company’s achievement of short-term and long-term business goals and financial position are used to evaluate the reasonableness of the connection between individual performance and the Company’s business performance and future risks. The highest pay as a percentage of the total pay of other employees in the past three years is shown in the table below, showing that senior management is responsible for business performance.
The highest pay as a percentage of the total pay of other employees:
Note: Total pay includes: Fixed salary (including base salary and allowances), bonuses (including work bonus and cash gifts for the three holidays), and severance pay (separation pay).
Status of Continuing Education among Board Members
PChome provides board members with opportunities for continuing education on an annual basis. Board members are encouraged to participate in external educational courses or forums to update their knowledge on industry practices and management methods, which covers ESG aspects, thus creating a solid foundation for a robust corporate governance system within the Company. In the future, additional resources will be invested to provide board members with diverse means of engaging in continuing education, thereby achieving the relevant goals set forth for Board members in the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies. The number of continuing education hours received by directors in 2022 complies with the ratio of continuing education hours for directors of public companies.
List of Courses Undertaken by Board Members in 2022
Ethical Corporate Management
Strengthening Ethical Corporate Management
PChome emphasizes the principles of ethical and transparent governance. The entire management team and our value chain partners are bound by standards of ethical corporate management. Relevant standards, such as the Code of Integrity Management, Code of Ethical Conduct, and Code of Practice on PChome Corporate Governance are disclosed on our website, and the outcomes of our corporate governance measures are disclosed in the Annual Report. PChome strives to increase the transparency of our corporate governance and we welcome tips and suggestions from everyone. Depending on the conditions, our investor relations, stock affairs, human resources, customer service, and procurement departments are responsible for stakeholder communication. Our website includes contact information for our spokesperson and relevant business departments, as well as a dedicated webpage for stakeholders to respond to the issues of concern among stakeholders in an appropriate manner. PChome’s “Procedures for Ethical Management and Guidelines for Conduct” and “Code of Integrity Management” prohibits conduct that engages in unfair competition, so as to ensure the policy of business integrity and implementation of fairness and justice. PChome was not involved in any lawsuits related to anti-competitive behavior and violation of antitrust and monopoly regulations in 2022.
PChome established the Implementation Measures for Whistleblower Reporting and Protection System to create a corporate culture of integrity and transparency, fulfill its commitment to integrity and ethical values set forth in the Code of Ethical Conduct and Code of Integrity Management, and encourage the reporting of any fraudulent conduct or violations of the law by the Company. The regulations were discussed and passed in the board meeting on February 25, 2022, and set forth requirements on maintaining the confidentiality of the investigation process and whistleblower protection mechanisms. The Company established independent whistleblowing channels to ensure that whistleblowers are not subjected to severance, dismissal, pay cut, or other improper treatment due to whistleblowing. The Company may also take emergency protective measures when whistleblowers are at risk of retaliation. Anyone (including employees, suppliers, shareholders, investors, and stakeholders) who discovers that the director, manager, employee, or substantial controller of the Company and affiliated enterprises may have committed a crime, fraud, or violation of the law at the Company, may report it via whistleblowing channels.
Channel for Filing Complaints
Whistleblowers may file a report with the Company’s responsible personnel via e-mail or in writing:
- E-mail: firstname.lastname@example.org
- Mailing address: To the “Whistleblowing Mailbox of the Audit Office, PChome Online Inc”. at 12F, No. 105, Sec. 2, Dunhua S. Rd., Taipei City 106, Taiwan
PChome fulfills its commitment to integrity and ethical values according to the Whistleblowing and Whistleblower Protection System Implementation Regulations. Besides including a business integrity clause in the purchase and supplier contracts of PChome, we also established an effective internal control system for business activities with relatively high risk of unethical conduct. The internal control system is reviewed at any time to ensure that its design and implementation continues to remain effective. PChome did not have any substantiated incidents of corruption in 2022.
Human Rights Policy
PChome supports the Universal Declaration of Human Rights, United Nations Global Compact, Guiding Principles on Business and Human Rights, and ILO Convention, and established the PChome Online Inc. Human Rights Policy to fulfill its corporate social responsibility, protect human rights, and create a work environment with dignity. We prohibit the business activities of our suppliers from involving any violations of human rights.
Human Rights Issues
- Respecting Human Rights in the Workplace: PChome does not treat employees differently due to gender, race, social class, age, marital status, and family situation, in order to achieve equal and fair employment, recruitment, salaries, benefits, training, evaluation, and promotion opportunities. (Please refer to “CH4. A Reliable Partner in the Workplace”)
- Providing a Safe and Healthy Work Environment: PChome compiles with laws and regulations related to occupational safety and health, ensures employee safety and physical health, provides a safe workplace, prohibits forced labor and child labor, and set up a nursing room with professional nurses to periodically examine employees’ health and safety risks. We carry out improvement plans based on identification results, improve the safety and health conditions of the work environment, and lower the risk of occupational accidents, thereby providing employees with a safe and healthy workplace. (Please refer to “4.4 Healthy and Friendly Workplace”)
- Protecting freedom of association and collective bargaining right: Respecting employees’ basic human rights and protecting their right to unionize and collective bargaining.
- Information Security and Rersonal Data Protection: To protect the personal data and business information of all customers, employees, and stakeholders, PChome has comprehensive and strict personal data protection and information security mechanisms and measures to ensure the safety of data, and prevent theft, tampering, damage, destruction, or leakage. (Please refer to “2.3 Reliable information security and protection”)
- Human Rights Policy Communication: PChome periodically provides training in illegal infringement and human rights to raise awareness of human rights protection. Human rights training in 2022 include “Advocating for an inclusive workplace environment with diversity and providing a safe and healthy work environment” and “Information security and personal data protection” with a total of 2,058.5 training hours. We irregularly communicate the human rights policy to draw employees’ attention to human rights issues, so that they may be more capable of identifying and managing potential risks, and lowering the possibility of human rights violations.
- Periodically Examining and Evaluating the Human Rights Policy and Related Measures: In 2022, PChome conducted a VOE survey, workplace health survey, “Illegal Infringement in the Workplace Self-Evaluation Form” for department heads, and the Occupational Safety Office established the “Program on Preventing Employee Workplace Violations”. PChome periodically reviews the results of the human rights management policy, including whether the responsible units periodically organize training on illegal infringement and human rights, make improvements to the system, and continue to follow up, in order to effectively control and lower human rights risks and achieve goals of the human rights management policy.
- Establishing Smooth Communication Channels between Labor and Management: PChome provides effective and appropriate grievance mechanisms for matters that damage employees’ rights and interests. Employees can file a complaint with their unit supervisor or the Human Resources Department when they encounter issues in the Company, ensuring that employees’ situations are fully expressed to their superiors.
- Other Stakeholders: Pursuant to the Whistleblowing and Whistleblower Protection System Implementation Regulations, whistleblowers may file a report with PChome’s responsible personnel via e-mail or in writing.