Articles

The Board of Directors is Avalue’s highest governing body and has established three functional committees – the Audit Committee, the Compensation Committee, and the Sustainability Development Committee – to assist in the Board’s operations and exercise of its functions. Both the Audit Committee and the Compensation Committee are comprised entirely of Avalue’s independent directors. During 2024, the Board of Directors held a total of 8 meetings, with an average attendance rate of 93%.

Avalue’s Board of Directors has formulated a diversified policy regarding the composition of its members, which is disclosed on the company’s website and the Market Observation Post System. The nomination of directors is subject to a rigorous selection process that considers not only diverse backgrounds, professional skills, and experience but also emphasizes gender equality in the composition of the Board and the reputation of individual directors in terms of ethical behavior and leadership.

To strengthen the corporate governance mechanism, Avalue stipulates in its “Articles of Incorporation” that the election of directors will fully adopt a nomination system. The “Principles of Corporate Governance Best Practice” and the “Director Election Procedures” regulate that the composition of the Board of Directors should consider diversity. The diversification policy is based on the company’s operations, business model, and development needs, covering two major aspects: basic conditions and values, and professional knowledge and skills.

To ensure the effectiveness of the Board of Directors, the company has also established the “Board of Directors Performance Evaluation Procedures,” which regularly review the performance of the Board of Directors and individual directors through measurement items including control of company goals and tasks, awareness of responsibilities, operational participation, internal relationship management and communication, professional skills and continuing education, internal control, and specific opinions expressed. This is done to confirm the effective operation of the Board and serve as a reference for future director selections.

In addition, Avalue continues to promote a director succession plan and builds a director candidate database based on the following criteria: first, possessing integrity, responsibility, innovation, and decision-making ability, and professional knowledge and skills that align with the company’s core values and contribute to company management; second, having practical industry experience related to Avalue’s operations; and third, expecting that the addition of the member will provide the company with an effective, collaborative, diverse, and demand-aligned Board of Directors. The overall professional field of the Board of Directors must cover corporate strategy, accounting and taxation, financial finance, law, administrative management, and production management, with at least one female director designated. The selection of director candidates must also pass qualification reviews and comply with relevant regulations to meet future changes in director positions and ensure the stability and quality of the Board’s composition.

Avalue’s Chairman does not concurrently serve as President or CEO. In accordance with the “Principles of Corporate Governance Best Practice,” the circumstances under which directors should recuse themselves are clearly defined in the “Board of Directors Meeting Rules.” If a director’s spouse, blood relatives within the second degree of kinship, or a company with a controlling or subordinate relationship with the director has an interest in the matter under discussion, it is considered that the director has a personal interest in the matter and should disclose the important details of the interest at the Board meeting. Maintaining a high degree of self-discipline, if a director’s involvement in an agenda item poses a risk of harming the company’s interests, the director should recuse themselves from discussion and voting and may not exercise voting rights on behalf of other directors.

Avalue’s Chairman and the Board of Directors appoint and supervise the company’s management team, are responsible for the company’s overall operating conditions, are responsible to the shareholders, and are committed to maximizing shareholder rights, ensuring the effective implementation of the company’s governance system. The President comprehensively manages the establishment of the company’s operating goals, executes and coordinates various strategic deployments.

Avalue has established the “Board of Directors Performance Evaluation Procedures,” using performance evaluation metrics to assess the effectiveness of the Board’s operations and director performance. These metrics include control of company goals and tasks, awareness of responsibilities, participation in operations, internal relationship management and communication, professional skills and continuing education, internal control, and specific opinions expressed. This information is used as a reference for future director selections.

1. Evaluation Cycle: Conducted annually.
   
   
2. Evaluation Period: January 1, 2024 to December 31, 2024.
   
   
3. Evaluation Scope: Board of Directors, individual directors, and functional committees.
   
   
4. Evaluation Method: Self-evaluation by the Board of Directors/functional committees and self-evaluation by director members, or other appropriate methods.
   
   

The results of this evaluation are presented using a 5-point scale, with 1 representing very poor/strongly disagree and 5 representing excellent/strongly agree. Overall, the Board of Directors performed well, and will continue to strengthen based on the results of this evaluation to improve corporate governance effectiveness. Specific evaluation items and results are as follows:

The Compensation Committee is composed of three independent directors and meets twice a year. With a professional and objective position, it evaluates Avalue’s compensation policies and systems for directors and managers and submits recommendations to the Board of Directors for its decision-making reference, assisting the Board in performing its duties and ensuring reasonable compensation policies to promote the company’s long-term stable development. In 2024, a total of 2 meetings were held, with a 100% attendance rate by committee members.

Avalue’s compensation system for senior managers is performance-oriented and fully integrated with corporate sustainability goals, demonstrating a commitment to ESG strategies. Compensation includes regular salaries and non-recurring bonuses based on overall organizational performance and individual performance, with performance targets also encompassing ESG indicators related to environmental management, social responsibility, and corporate governance. These compensation arrangements are reviewed by the Compensation Committee and submitted to the Board of Directors for approval before implementation. Through this mechanism, the commitment and execution of the senior management team towards sustainable development strategies are strengthened, enabling the concrete integration of sustainability goals into the company’s operations and decision-making processes, and further responding to stakeholders’ expectations for long-term corporate value and responsible governance.

The compensation of Avalue’s directors is provided in accordance with the company’s Articles of Incorporation and the Organization Rules of the Compensation Committee. The Compensation Committee and the Board of Directors regularly review the director compensation system, adopting a fixed remuneration payment model. Avalue’s independent directors are members of the Compensation Committee, participating in the review of compensation policies, and the Board of Directors makes the final decision. Director compensation includes monthly director remuneration, annual director bonuses, and attendance fees, all of which are provided at a reasonable level based on the company’s operating performance.

According to Article 19 of the “Articles of Incorporation,” if the company has a profit in a year, it shall allocate 1% to 20% for employee bonuses and no more than 2% for director bonuses. The director and employee bonuses for 2024 were resolved by the Compensation Committee and the Board of Directors and will be reported to the 2025 Annual Shareholders’ Meeting for distribution.

The compensation of Avalue’s managers is determined based on the company’s annual operating performance, financial condition, operational status, and individual work performance. If the company has a profit in a given year, Avalue uses the performance evaluation results executed in accordance with the “Performance Management Procedures” as a reference for the issuance of manager bonuses.

Avalue has provisions for conflict of interest in the Board of Directors Meeting Rules, the Audit Committee Organization Rules, the Compensation Committee Organization Rules, the Sustainability Development Committee Organization Rules, and the Code of Integrity. Directors, managers, and other stakeholders attending or observing Board or Committee meetings must disclose the important details of their interests in the agenda items if they or the legal entity they represent have an interest. If there is a risk of harm to the company’s interests, they shall not participate in the discussion or voting, and shall abstain from the discussion and voting, and shall not exercise voting rights on behalf of other directors. Furthermore, Avalue’s “Code of Ethics for Directors and Managers” also stipulates strategies to prevent conflicts of interest and recusal, requiring directors and managers to avoid conflicts of interest that may intervene or potentially intervene with the company’s overall interests when handling official business, preventing acts that may harm the company and shareholder interests.

On March 14, 2024, at the Board of Directors meeting, the case regarding the annual salary adjustment for managers reviewed by Avalue’s Compensation Committee was discussed. Director Liang-Kuang, Lien legally recused himself from voting. Director Chang Chia-Che was represented by Chairperson Liu Li-Chi, and the remaining attending directors approved the case as proposed.

On December 19, 2024, at the Board of Directors meeting, the case regarding the annual bonus for managers in 2023, reviewed by Avalue’s Compensation Committee, and the allocation of funds for the manager’s stock holdings under Avalue’s employee stock trust plan were discussed. Director Lien Liang-Kuang legally recused himself from voting. Director Chang Chia-Che was represented by Chairperson Liu Li-Qi, and the remaining attending directors approved the case as proposed. 

Avalue is committed to respecting and protecting the basic human rights of all employees, regardless of nationality or migrant worker status. We adhere to the principles outlined in the “UN Guiding Principles on Business and Human Rights (UNGPs)” to establish a transparent, fair, and inclusive work environment. We firmly oppose any form of discrimination or unequal treatment, respecting all ethnic groups, including indigenous peoples, women, minorities, different religious believers, people with disabilities, migrant workers, and their families, ensuring that every employee can contribute to their fullest potential in an environment of equality and respect.

Avalue strictly prohibits any form of discrimination, harassment, forced labor, and child labor, and is committed to providing safe and fair working conditions, including reasonable wages, benefits, labor protection, and career development training. At the same time, in accordance with the guidance of the Occupational Safety and Health Administration of the Ministry of Labor, Avalue has formulated the “Management Procedures for Preventing Illegal Harm During Job Performance” to prevent employees from suffering violence, including physical, verbal, psychological, or sexual harassment, during work or commuting, safeguarding their physical and mental health and workplace safety.

To implement human rights protection and corporate social responsibility, Avalue regularly disseminates the content and relevant regulations of the “Human Rights Policy” to all employees via internal email, covering issues such as the prohibition of any form of discrimination, harassment, forced labor, and child labor, and clearly explaining the company’s established complaint channels and confidentiality mechanisms. Through continuous and transparent internal communication, employee awareness and respect for human rights issues are enhanced, further shaping a safe, equal, and inclusive workplace culture. In the future, the company will continue to strengthen education and training on human rights issues and promote practical implementation, deepen the importance of human rights values among all employees, and demonstrate its commitment to social responsibility through concrete actions.

If suspected human rights violations (such as discrimination, sexual harassment, forced labor, etc.) occur within the company, reports can be made through a dedicated hotline or complaint email address. The receiving unit will initiate a confidential and impartial investigation procedure in accordance with the company’s internal regulations.

• Complaint Hotline: (02)8226-2345#7102
  
  
• Complaint Email: angel_wang@avalue.com

Avalue adheres to relevant labor laws such as the “Labor Standards Act,” establishes employee codes of conduct and internal management systems, and responds to and respects international fundamental labor rights principles, implementing values such as gender equality and diversity and inclusion, and is committed to creating a safe, friendly, and human rights-respecting work environment. During the reporting period, Avalue did not experience any legal disputes arising from anti-competitive behavior, antitrust, or monopolistic practices, and no discrimination incidents occurred in 2024. We do not force employees to work overtime or extend working hours against their will, and have not received any reports of such incidents involving suppliers, nor have any incidents of infringing the rights of indigenous peoples occurred.

Avalue continues to comply with international and local labor laws and requires suppliers to sign the “Supplier Corporate Social Responsibility Commitment” to ensure they value labor rights, do not hire personnel below the local legal working age, and never employ child labor in any position. At the same time, we use the “Supplier/Third-Party Environmental Management Questionnaire” to evaluate suppliers, as a basic condition for listing them as qualified suppliers, requiring suppliers to comply with relevant regulations and jointly implement corporate social responsibility and sustainable development goals.

Avalue has conducted integrity risk assessments for its headquarters’ operating locations (Liancheng, Lide, and Taichung), identifying areas of concern for five key aspects within the integrity prevention plan: GRI 205 Anti-Corruption, GRI 206 Anti-Competitive Behavior/Antitrust and Monopoly, GRI 415 Public Policy, GRI 418 Customer Privacy, and others. The assessment results show that (1) stakeholders have the highest level of concern regarding GRI 205 Anti-Corruption; (2) the main sources of risk change include insufficient awareness or limited training resources among employees; and (3) high-risk sections within business processes should be focused on. As of now, Avalue has not experienced any confirmed corruption incidents.

Avalue has established the “Code of Ethics for Directors and Managers” and the “Integrity Management Guidelines and Code of Conduct,” which are publicly disclosed on the Market Observation Post System and the company’s website, clearly stipulating that directors, managers, employees, agents, and individuals with substantial control should adhere to the principle of integrity and actively implement the concept of integrity management. The “Procedures for Handling Reports of Illegal, Unethical, or Dishonest Acts” have also been established as a basis for concrete execution and handling.

Avalue’s procurement department is the primary window for promoting integrity among suppliers and includes a integrity pledge as a necessary document in procurement contracts to strengthen integrity management throughout the supply chain. Internally, the heads of each unit are responsible for controlling front-line operations, and auditors conduct audits. Externally, KPMG Accountants is commissioned to audit and certify financial reports and internal control systems to assist the Board of Directors and management in achieving goals related to the effectiveness and efficiency of operations, the reliability of financial reporting, and compliance with relevant laws and regulations.

Relevant operating procedure documents have been published on the Market Observation Post System, the corporate governance section of the company website, and the internal website Portal document management area. When new employees report for duty, Avalue provides written or electronic documents for them to read and sign as appropriate, and the access to relevant procedure documents is also re-promoted during new or in-service training, ensuring that all employees can obtain and understand information related to integrity management and implement information transparency.

Integrity management education and training has been incorporated into the new employee training course content organized by the Administration Department and is recorded in the employees’ training records. Currently, the Audit Department serves as the instructor and supplements the training with current events news, incorporating promotion through other public meetings, online or e-mail training modes, to ensure that all employees are aware of and understand the company’s integrity spirit and principles.

• 4 new employee training sessions were held in 2024, with a total of 54 new employees completing integrity management education and training in the in-person course.
  
  
• 5 all-employee online integrity management education and promotion sessions were conducted in 2024.
  
  
• A total of 344 employees acknowledged and agreed to comply with the company’s integrity management policy by signing (responding) online in 2024, with a completion rate of 93%.
  
  
• The Purchase order issued by the procurement department includes a requirement and promotion of integrity commitments in the notes at the end of the document.