貳 肆 公司治理報告 IV.Corporate Governance Report 一 組織系統 ( 一 ) 組織結構 I. Organization System (I) Organization

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1 肆 公司治理報告 IV.Corporate Governance Report 一 組織系統 二 董事 監察人 總經理 副總經理 各部門及分支機構主管資料 三 公司治理運作情形 ( 一 ) 董事會運作情形 ( 二 ) 公司治理運作情形及其與上市上櫃公司治理 實務守則差異情形及原因 ( 三 ) 揭露公司治理守則及相關規章之查詢方式 ( 四 ) 揭露其他足以增進對公司治理運作情形瞭解 之重要資訊 ( 五 ) 內部控制制度執行狀況 ( 六 ) 違法受處罰及主要缺失與改善情形 ( 七 ) 董事會之重要決議 ( 八 ) 董事或監察人對董事會通過重要決議有不同 意見且有紀錄或書面聲明者 ( 九 ) 與財務報告有關人士辭職解任情形 I. Organization II. Information about Directors, Supervisors, President, Vice Presidents and Managers III. Governance and Operations (I)Board Meetings (II) Governance and Operation of the Company As Well As Its Divergence from Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and Reasons (III) Disclosure of Corporate Governance Best-Practice Principles and How to Locate Relevant Regulations (IV) Disclosure of Important Information about the Governance and Operations of the Company (V) Implementation of Internal Control System (VI) Law Violations Resulting in Punishment, Misconduct, and Improvement (VII) Major Board Resolutions (VIII) Directors or Supervisors Who Were on Record or Had Submitted Written Declaration for Holding a Different Opinion of Major Resolutions Passed by of Directors (IX) Resignation of Person Related to the Company's Financial Reports Taiwan Chunghwa Post Post Annual Annual Report Report 15

2 貳 肆 公司治理報告 IV.Corporate Governance Report 一 組織系統 ( 一 ) 組織結構 I. Organization System (I) Organization Structure The organizational structure of Chunghwa Post includes the following: (1) The board of directors. The board is composed of 11 to 15 directors. According to law and the company's own Articles of Incorporation, this is the company's decision-making body. In addition, there is a board secretariat responsible for all administrative affairs of the board. (2) Three supervisors. According to law and the company's own Articles of Incorporation, the supervisors are charged with supervising the company's financial and business operations. (3) A president. According to law and the company's own Articles of Incorporation, the president is responsible for carrying out board decisions, overseeing corporate operations, as well as supervising all staff and departments of the company. The president shall be assisted by four vice presidents and one chief secretary. In addition, there is an office of the president, headed by a director. (4) An auditor general (elected by the board of directors) and an auditing department directly under the board. The auditor general and the auditing department are responsible for conducting audits of the company and making regular reports to the board and corporate supervisors. (5) A Strategic Planning Committee. The committee shall have a chairman, who can also be company president. The committee shall include one fulltime and four part-time vice chairmen as well as several committee members. (6) The company has following departments: the Department of Mail Business and Operations, the Department of Philately, the Department of Savings and Remittances, the Department of Life Insurance, the Department of Property Operations, the Department of Capital Operations, the Department of Personnel, the Department of Civil Service Ethics, the Department of Accounting, the Department of Information Management, and the Department of Occupational Safety and Health/General Affairs. (7) There are 23 larger branches designated as administrative and supervisory post offices, each administering a group of smaller branches. (8) Five mail processing centers. These centers utilize high performance automated systems to process mail, as well as integrating mailing procedures, transport networks and collection routes. 16 Chunghwa Post Annual Report

3 IV.Corporate Governance Report 肆 公司治理報告 貳 ( 二 ) 組織系統圖 Organization Chart Board of Directors Secretariat, Board of Directors Chairperson Auditor General Dept. of Auditing Dept. of Personnel Vice President Dept. of Occupational Safety & Health Dept. of Civil Service Ethics Chief Secretary General Manager s Office Dept.of Property Operations President Vice President Dept. of Savings& Remittances Dept. of Philately Post Offices Strategic Planning Committee Vice President Dept. of Accounting Dept. of Life Insurance Branches Mail Processing Centers Dept. of Capital Operations Vice President Dept. of Mail Business& Operations Dept. of Information Management Chunghwa Post Annual Report 17

4 貳 肆 公司治理報告 IV.Corporate Governance Report ( 三 ) 機構設置與調整 : ,570 2, % ,181 2 郵政機構設置比較表 Comparative Chart of Postal Establishments Types of Postal Establishments (III) Establishment and adjustment of units: The postal organization is divided into administrative and business establishments. Business establishments are in turn divided into post offices and contracted agencies. At the end of 2008, there were totally 2,570 administrative and business establishments, a decrease of 2,253 units as compared to the previous year with a reduction rate of 46.71%. The reduction was mainly due to the change of the entire postal service pattern which resulted from the outsourcing of mail delivery work by the contracting agencies and the inclusion of stamp sales agencies into the convenience store franchise as branch stores (still provide postage stamps sales service, however). The number of agencies was reduced by 72 while that of the stamp sales agencies by 2,181. The customers' acess to postal service was not affected as only the contracted agencies were adjusted.the establishment and adjustment of the units for the last 2 years are as follows: 單位 : 處 Unit: Office Growth Administrative Establishments Headquarters 1 1 Post Offices Total Business Establishments Post Offices Contracted Agency Mail Processing Centers 5 5 Branch Offices 1,321 1,321 Temporary Post Offices 0 0 Total 1,326 1,326 Agencies Stamp Sales Agencies 2, Total 3,473 1, Grand total 4,823 2, ( 四 ) 主要部門所營業務 (IV) The Operations of Major Departments * Department of Auditing: Providing guidance and performing audits on mail, banking and life insurance operations; and performing audits on the credit analysis of the life insurance business's real estate mortgage loans, etc. * Strategic Planning Committee: Reviewing the company's major business and investment plans as well as devising the company's reorganization policies, etc. * General Manager's Office: P l a n n i n g, i m p l e m e n t i n g a n d a s s e s s i n g t h e delegation of authority and duties; drafting, revising 18 Chunghwa Post Annual Report

5 IV.Corporate Governance Report 肆 公司治理報告 貳 or eliminating postal regulations and reviewing any dubious interpretations; reviewing manuscripts; and communicating with elected officials, etc. * Department of Mail Business and Operations: Planning and promoting mail business plans and marketing strategies; setting and adjusting postal rates; establishing, closing and changing the status of postal facilities; planning and managing agential business; planning and supervising the collection, dispatch, transport and delivery of mails; ensuring the safety of mail operations, etc. * Department of Philately: Developing, planning, promoting and assessing the philately business; developing, designing, manufacturing and selling philately products, etc. * Department of Savings and Remittances: Drafting operational policy and goals; planning, supervising, promoting and assessing for remittances business and marketing strategies; dealing with investigations of judicial and tax collection agencies, etc. * Department of Life Insurance: Drafting and overseeing the development plans and operational goals of the company's simple life insurance business; as well as planning, supervising and evaluating its real estate mortgage loan business, etc. * Department of Property Operations: Reviewing, assessing and planning for investment in development project, and postal properties utilization; as well as managing postal properties; assessment,planning and designing as well as making arrangements for specifications of machinerymanagement and maintenance of postal estates and propertiesplanning and implmentation of postal business automation system. * Department of Capital Operations: Managing postal capital; managing foreign exchange and overseas investments; trading and managing derivatives, domestic stocks, beneficiary certificates, and so forth. * Department of Personnel: Planning, executing and evaluating human resources; drafting and revising regulations governing personnel; managing affairs regarding staff, including examinations, selection, assignment, appointment, discharge, promotion, relocation, upgrading of rank, retirement, pension and severance, etc. * Department of Civil Service Ethics: Uncovering and fighting staff corruption and handling tips given by informants; overseeing procurement; protecting official confidential information; preventing sabotage and vandalism, etc. * Department of Accounting: Analyzing, preparing and auditing the budget and the final account; analyzing, preparing and reporting capital utilization; managing asset accounts and calculating depreciation, amortization and reevaluation; preparing and filing corporate tax and enterprise income tax; announcing financial information, etc. Chunghwa Post Annual Report 19

6 貳 肆 公司治理報告 IV.Corporate Governance Report 二 董事 監察人 總經理 副總經理 各部門及分支機構主管資料 * Department of Information Management: Researching, analyzing and selecting new IT systems, network, software and hardware equipment; drafting, maintaining and managing of information security strategies, and so forth. * Department of Occupational Safety and Health: Conducting investigations into accidents and occupational injuries; managing staff health issues; handling related paperwork; managing bookkeeping and safekeeping of securities and account books; providing office building security; procuring materials, providing warehousing, receiving orders and supplies; procuring services, etc. II. I n f o r m a t i o n a b o u t D i r e c t o r s, S u p e r v i s o r s, P r e s i d e n t, V i c e Presidents and Managers ( 一 ) 董事及監察人資料 98 年 6 月 1 日 Title Information about Directors and Supervisors June 1, 2009 Name Education Prime Experience () Date Elected Other current position(s) F.L.Yu Master in Management Science, Chiaotung University Political Deputy Minister, MOTC Administrative Deputy Minister, MOTC Chairperson, Chunghwa Post S.Y. Hu MBA, Oregon State University Vice President, Chunghwa Post President, Chunghwa Post T.F. Su Law, NTU Director, Chunghwa Post 1. Vice President, Chunghwa Post 2. Supervisor, Taiwan Life Insurance Co., Ltd. W.H. Chen Ph.D. in Management Science, State University of New York at Buffalo Chairperson of Department and Graduate Institute of Business Administration, NTU 1. Professor in Department and Graduate Institute of Business Administration, NTU 2. Independent Director, Terawins, Inc. 20 Chunghwa Post Annual Report

7 IV.Corporate Governance Report 肆 公司治理報告 貳 J.S. Liu Department of sociology, National Chunghsin University Chairperson, Corporate Body of Tourism Business Development Foundation C.M. Feng Ph.D. in City and Regionl Planning, Northwest University, IL, USA SOLE-CPL Director, SOLE-CPL Logistics Professional International Certification Class Director, Institute of Traffic and Transportation, NCTU 1. Professor, Institute of Traffic and Transportation, NCTU 2., Vehicle Safety Certification Center K.L. Chang Master in City & Regional Planning, University of Pennsylvania Deputy Director, Council for Economic Planning and Development 1. Director, Council for Economic Planning and Development 2., China Engineering Consultants, Inc. P.Y. Chang Ph.D. in Economics, National Taiwan University Associate Professor, Department of Economics, Fujen University Assistant Director General, Central Bank of the Republic of China (Taiwan) S.C. Huang Department of Accounting & Statistics, Tamkang University Special Commissioner, DGBAS, Executive Yuan Deputy Director-General, Department of Statistics, MOTC C.H. Fu Doctoral studies in Economics, University of Texas at Austin Deputy Executive Secretary, Taxation and Tariff Committee, Ministry of Finance Counselor, Ministry of Finance Chunghwa Post Annual Report 21

8 貳 肆 公司治理報告 IV.Corporate Governance Report D.H. Hsiao Master, Institute of Management Science, Chiaotung University Director, Information Management Office, Keelung Harbor Bureau Director-General, Keelung Harbor Bureau K.Y. Huang Master, Institute of Traffic and Transportation, NCTU Director, Department of Transportation, Taiwan Province 1. Deputy Director-Gneral, Kaohsiung Harbor Bureau 2. Director, United Ship Design and Development Center Y.C. Shen Department of Public Admin., Chunghsing University Taipei Hanjhong St. Post Office Taipei Shihlin Lanya Post Office K.M. Cheng Air Force Institute of Technology Former Chairman, Chunghwa Postal Union Junior Executive Officer, Parcel Delivery Subsection, Second Delivery Section, Taipei Post Office M.H. Lan Department of Public Policy and Management, Shih Hsin University Junior Executive Officer, Chunghwa Post Secretary-General, Chunghwa Post Workers' Union Supervisor C.H. Lu MBA, Concordia University Wisconsin Accounting, Ministry of Examination Vice Director-General, Second Dept., DGBAS, Executive Yuan Supervisor C.T. Huang Master, Institute of Public Administration, Chengchi University Deputy Director, 3rd Dept., Executive Yuan Director, 3rd Dept., Executive Yuan Supervisor H.Y. Huang Accounting Section, Department of Accounting and Statistics,Fujen Univ. Acting Accounting, Tourism Bureau, MOTC Special Commissioner, Dept. of Accounting, MOTC 22 Chunghwa Post Annual Report

9 IV.Corporate Governance Report 肆 公司治理報告 貳 9711~9861 Jan. 1, 2008~June 1, 2009 Title Name Education Prime Experience Date Resigned Note N.H. Ho Ph.D. from Chunghwa University Administrative Deputy Minister, MOTC /11/ Was appointed to board at the 3rd temporary borad meeting of the 2nd board on Mar. 3, Discharged his concurrent positions as director and Chairperson on June11, 2008 Supervisor S.F. Lin Department of International Trade, Fengchia University Section Chief., DGBAS, Executive Yuan /09/ Was appointed to supervisor on May 11, Discharged his concurrent position as supervisor on Jan. 9, 2008 Y.R.Liu Ph.D., University of Chicago 56 Legislator, 5th and 6th terms /24/ Was appointed to board of the second board on Feb. 21, Discharged her concurrent position as board on April 24, 2008 Supervisor W.H.Lu Department of Accounting and Statistics, Tamsui Institute of Business Administration Special Commissioner, Dept. of Accounting, MOTC /19/ Was appointed to be supervisor on January 9, Discharged his concurrent position as supervisor on Sept. 19, 2008 S.Y. Chou Ph.D. in Business, University of Indiana, USA Professor and Dean, College of Commerce, National Chengchi University /06/ Was appointed to board of the second Board on July 25, Discharged his concurrent position as board on Oct. 6, 2008 Chunghwa Post Annual Report 23

10 貳 肆 公司治理報告 IV.Corporate Governance Report M.H. Hsieh Master, Institute of Shipping & Transportation Management, Taiwan Ocean University Director-General, Kaohsiung Harbor Bureau /10/ Was appointed to board of the second Board on May 11, Discharged his concurrent position as director on Dec.10, 2008 M.Y. Wu Law, NTU President, Chunghwa Post Was appointed to board at the7rd temporary borad full meeting of the 2nd board on Jun. 11, Discharged his concurrent position as director and chairperson on May 11, 2009 H.C. Lu Kaohsiung Institute of Technology Vice Chairman, Chunghwa Post Workers' Union Was appointed to labor board on May 11, Discharged his concurrent position as labor director on May 11, Principal Corporate Shareholder Name of Corporate Shareholder Ministry of Transportation and Communications Principal Corporate Shareholder Since Chunghwa Post is a 100% state-owned enterprise, this is not applicable Information about Directors and Supervisors June 1, 2009 Name F.L.Yu S.Y. Hu Qualification 5 years experience in the field of business, law, finance, or banking V V V V V V V V V V V V V V Notes 24 Chunghwa Post Annual Report

11 IV.Corporate Governance Report 肆 公司治理報告 貳 T.F. Su W.H.Chen C.M.Feng J.S. Liu K.L. Chang P.Y. Chang S.C. Huang C.H. Fu K.I.Huang D.H. Hsia M.H.Lan Y.C. Shen K.M. Cheng C.T. Huang C.H. Lu H.Y.Huang V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V Note: 1. Neither an employee of the company, nor a director, supervisor, or employee of an affiliated enterprise. 2. Neither directly or indirectly, owns more than 1% of Chunghwa Post's outstanding shares, nor a top-ten individual shareholder. 3. Neither the spouse nor an immediate relative of a person specified in Notes (1) and (2). 4. Neither a director, supervisor, or employee of a legal person shareholder who, directly or indirectly, owns more than 5% of Chunghwa Post's outstanding shares, nor a director, supervisor, or employee of a legal person shareholder who is a top-five shareholder of Chunghwa Post. 5. Neither a director, supervisor, or manager of a company or institution doing business or having a financial relationship with the company, nor a shareholder holding 5% or more of the company's outstanding shares. 6. Neither a professional nor an owner, partner, board director, supervisor, manager, or a spouse of any of the above-mentioned of a company or institution that had provided financial, business, or legal services to the company in the most recent fiscal year. Chunghwa Post Annual Report 25

12 貳 肆 公司治理報告 IV.Corporate Governance Report July 29, Wu Min-yu, Former Chairperson (Finished his term in office on May 11, 2009) Su Tian-fuh, Vice President Yen Yung-an, Vice President Chen Tzu-de, Vice President Chen Shu-chen, Vice President Yen Yung-teng, Auditor General Su Da-hsiung, Chief Secretary 26 Chunghwa Post Annual Report

13 IV.Corporate Governance Report 肆 公司治理報告 貳 ( 二 ) 總經理 副總經理 各部門及分支機構主管資料 98 年 7 月 29 日 Title President President, vice presidents, and senior management July 29, 2009 Name S.Y. Hu Education MBA, Oregon State Univ. Prime Experience Vice President, Chunghwa Post (CHP) Date Elected /11/08 Other Current Position(s) Note: M.Y.Wu, former President, was discharged on June 11, 2008 Vice President T.F. Su Law, NTU Director, Mail Business Dept., CHP /13/03 Supervisor, Taiwan Life Insurance Co., Ltd. Vice President Y.A. Yen Master, Chengchi Univ. Director, Capital Operations Dept., CHP /17/06 Supervisor, Chunghwa Telecom Co., Ltd. Director, Corporate Body of the Academy of Business Development Vice President T.D. Chen Master in Management Science, Chiaotung Univ. Chief Secretary, CHP /01/08 Director, Chunghwa Express Supervisor, Corporate Body of Taiwan Postal Association Note: S.Y.Hu, former Vice President, was discharged on June 11, 2008 Vice President S.C. Chen Economics, NTU Taichung PO /16/ Note: S.C.Huang, former Vice President, was discharged on July 16, 2009 Auditor General Y.T. Yen Law, NTU Director, Personnel Dept., CHP /31/07 Chief Secretary D.H. Su Public Administration, Chunghsing Univ. Director, Philatelic Dept., CHP /08/08 Supervisor, Cathay United Bank Note: T.D.Chen, former Chief Secretary, was discharged on August 1, 2008 Chunghwa Post Annual Report 27

14 貳 肆 公司治理報告 IV.Corporate Governance Report Director, Mail Business & Operations Dept. C.H. Tseng Economics, Fujen Univ. Chungli PO /18/08 Director, Chunghwa Express Director, Corporate Body of Taiwan Postal Association Note: J. M. Chang, former Director, was discharged on March 18, 2008 Director, Philatelic Dept. J.C. Chen Law, Chengchi Univ. Director, Life Insurance Dept., CHP /08/ Note: D.H.Su, former Director, was discharged on August 8, 2008 Director, Savings & Remittances Dept. R. Y. Chou Political Science, NTU Vice Taipei PO /17/06 Director, Life Insurance Dept. G.Y. Hong Law, NTU Vice Taipei PO /08/08 Supervisor, Corporate Body of Taiwan Postal Association Note: J.C.Chen, former Director, was discharged on August 8, 2008 Director, Property Operations Dept. B.S. Chen Master of Civil Engineering, Thailand Asian Institute of Technology Chief Engineer, CHP /30/07 Director, Corporate Body of Taiwan Postal Association Director, Capital Operations Dept. C. Wang Commerce, NTU Taoyuan PO /09/ Note: R.S.Chen, former Director, was discharged on March 2, 2009 Director, Personnel Dept. R.Y. Cheng Law, NTU Senior Executive & Chief of Secretariat of,chp /31/07 Director, Corporate Body of Taiwan Postal Association 28 Chunghwa Post Annual Report

15 IV.Corporate Governance Report 肆 公司治理報告 貳 Director, Ethics Dept. C.C. Chang Law, NTU Keelung PO /27/05 Director, Accounting Dept. I.H. Wu Commerce, NTU Senior Executive & Deputy Director, Accounting Dept., CHP /07/04 Director, Chunghwa Express Director, Corporate Body of Taiwan Postal Association Director, Information Management Dept. J.Y. Yeh Law, Chunghsing Univ. Senior Executive & Deputy Director, Information Management Dept., CHP /27/ Note: P.Y. Lu, former Director, was discharged on Jan. 16, 2008, and was temperally succeded by J.Y. Yeh, who charged the position on Feb. 27, 2009 Director, Occupational Safety and Health Dept. J.M. Chang Law, Chengchi University Member of Strategic Planning Committee, CHP /31/08 Director, Corporate Body of Taiwan Postal Association Note: H.N. Wang, former Director, was discharged on Oct. 31, 2008 Taipei PO C.C. Su Public Administration, Chunghsing Univ. Kaohsiung PO /16/08, Chunghwa Express Note: T.D. Chen, former manager, was discharged on Jan. 16, 2008 Taichung PO Y.C. Meng Transportation & Communication Management, Chengkung Univ. Hsinchu PO / / Note: S.C. Chen, former manager, was discharged on July 16, 2009 Kaohsiung PO S. J. Chen Chinese Literature, Chunghsing Univ. Changhwa PO Note: P.Y. Lu, former manager, was discharged on Aug., 2009 Chunghwa Post Annual Report 29

16 貳 肆 公司治理報告 IV.Corporate Governance Report Panchiao PO P.Y. Lu Business Admin.,Fengchia Univ. Kaohsiung PO / / Note: M.S. Chen, former manager, was discharged on July 16, 2009 Sanchung PO L.C. Chen Business Administration, Chengchi Univ. Senior Executive & Chief of Secretariat of,chp /08/ Note: M.Y. Shen, former manager, was discharged on April 8, 2009 Chungli PO G.T. Yang Politics, Tunghai Univ. Vice Taichung PO /18/ Note: C.H. Tseng, former manager, was discharged on March 18, 2008 Taoyuan PO C. H. Chen Law, NTU Vice Taipei PO /09/ Note: C. Wang, former was discharged on March 9, 2009 Keelung PO S.C. Tsai Master in Politics, NTU Vice Taipei PO /27/05 Changhwa PO C.C. Chang Horticulture, Chiayi Agriculture College Yunlin PO / / Note: S. J. Chen, former was discharged on Aug., 2009 Fengyuan PO R.C. Chou Journalism, Culture Univ. Vice Taichung PO / / Note: C.C. Yao, former manager, was discharged on July 16, 2009 Hsinchu PO C.Y. Suen Shih Hsin Univ. Vice Chungli PO / / Note: Y.C. Meng, former was discharged on Aug., 2009 Chiayi PO S.O. Huang Master in Management, Chengkung Univ. Hsingying PO /24/04 30 Chunghwa Post Annual Report

17 IV.Corporate Governance Report 肆 公司治理報告 貳 Tainan PO Fengshan PO Y.C. Chiu C.Y. Lin English, Kaohsiung Normal Institute. Law, Chinese Culture Univ. Taitung PO Hsingying PO /16/ /16/05 Ilan PO C.H. Ho Insurance, Tamkang Univ. 25 Ilan Branch /16/05 Miaoli PO J.S. Wu Social Sciences, Open Junior College Vice Director, Taipei Mail Processing Center(MPC) / / Note: Y.J. Chu, former was discharged on Aug., 2009 Nantou PO B.S.Liou Commerce, Open Junior College Section Chief, Taichung PO / / Note: C.C. Ho, former was discharged on Aug., 2009 Yunlin PO C.D. Tsai Business Administration, Soochow Univ. Vice Tainan PO / / Note: C.C. Chang, former was discharged on Aug., 2009 Hsinying PO W.J. Fang Urban Affairs, Chinese Culture Univ. Auditor, CHP /08/ Note: K.H. Yang, former was discharged on August 8, Pintung PO K.H. Shen Business Administration, Chengkung Univ. Taitung PO /12/ Note: Y. L. Chen, former was discharged on August 12, Hualien PO H.G. Wu Law, FuJen Univ. Auditor, CHP /13/ Note: J.S. Gu, former was discharged on March 18, Chunghwa Post Annual Report 31

18 貳 肆 公司治理報告 IV.Corporate Governance Report Taitung PO T. S. Tsai Business Administration, Fengchia Univ. Section Chief, Kaohsiung PO /12/ Note: G.h. Shen, former was discharged on August 12, Penghu PO W.H. Chen Accounting & Statistics Department, Open Junior College of Commerce, C.G. U. Auditor, CHP /14/ Note: L.S. Du, former was discharged on August 14, Director, Taipei Mail Processing Center (MPC) S.S. Chen Law, NTU Auditor, CHP /24/03 Director, Taoyuan MPC S.F. Hsiao Master in Management Science, Chiaotung Univ. Deputy Director, Occupational Safety and Health Dept., CHP 97.08/21 08/21/ Note: J.G.Wu, former Director, was discharged on July 16, Director, Taichung MPC C.T. Yen Public Administration, Open Junior College Taitung PO /16/05 Director, Tainan MPC Acted by Y. C. Chiu Tainan PO Director, Kaohsiung MPC C.K. Chen Urban Affairs, Chinese Culture Univ. Section Chief, Kaohsiung PO /21/03 32 Chunghwa Post Annual Report

19 IV.Corporate Governance Report 肆 公司治理報告 貳 ( 三 ) 最近年度支付董事 監察人 總經理及副總經理之酬金 (III) The remuneration of the members of the board, supervisors, president and vice presidents in the last fiscal year The Remuneration of the Members of Jan. 1, 2008 Dec. 31, 2008 Title Chairperson Chairperson Name 1 N.H. Ho (Note 1) 1 M.Y. Wu (Note 1) 1 S.Y. Hu (Note 1) 1 T.F. Su (Note 1) 2 J.S. Liu (Note 2) 3 Y.R. Liu (Note 3) 4 S.Y. Chou (Note 4) 4 C.M. Feng (Note 4) W.H. Chen K.L. Chang P.Y. Chang S.C. Huang C.H. Fu 5 M.H. Hsieh (Note 5) 5 K.I. Huang (Note 5) D.H. Hsia 1 Y.C. Shen (Note 1) 1 K.M. Cheng (Note 1) 1 H.C. Lu (Note 1) Salary Bonus Parttime Job Pay Distribution of Net Earnings Percent of Net Earnings Others 2,114, , , ,300 Chunghwa Post Annual Report 33

20 貳 肆 公司治理報告 IV.Corporate Governance Report The Remuneration Gaps Among the Members of Name of Directors 2,000,000 below NT$2,000,000 2,000,0005,000,000 NT$2,000,000 (including) NT$5,000,000 Total N.H. HoS.Y. Hu T.F. SuC.Y. LiuS.Y. Chou J.S. LiuW.H. ChenC.M. FengK.L. ChangP.Y. ChangS.C. Huang C.H. FuM.H. HsiehK.I. Huang D.H. HsiaY.C. Shen K.M. ChengH.C. Lu M.Y. Wu () 100% 7 Note 1 Chairpersons N. H. Ho and M. Y. Wu and board directors, S.Y. Hu, T.F. Su, Y.C. Shen, K.M. Cheng, and H. C. Lu received only monthly salaries and no honorariums. Acting Chairperson N. H. Ho, whose current job is Vice Minister, MOTC, received only difference of salary and finished his term on June 11, Board director M. Y. Wu with concurrent position as President took the seat of Chairperson on June 11, Board director S.H. Hu took the seat of President on June 11,2008. Board director T.F. Su took the seat of Vice President. 2 Board director C.C. Liu took his seat on June 23, 2007 and discharged his seat on March 19, 2008 and took his seat on July 25, Board director Y.R. Liu took her seat on Feb. 21, 2008 and discharged her seat on April 24, Board director S.Y. Chou took his seat on July 25, 2008 and discharged his seat on October. 6, 2008; he was succeeded by board director C.M. Feng on Oct. 6, Board director M.H. Hsieh took his seat on May 11, 2006 and discharged his seat on Dec. 10, 2008; he was succeeded by K.I. Huang on Dec. 10, As a government-operated enterprise and with the government holding 100% of the shares, the company dose not distribute earnings, employee bonuses and stock options. 7 Bonuses are temporary estimates The Remuneration of Supervisors Jan. 1, 2008 Dec. 31, 2008 Title Supervisor Supervisor Supervisor Name 1 S.F. Lin (Note 1) C.T. Huang C.H. Lu Parttime Job Pay Remuneration from Distribution of Net Earnings Total Percentage of Net Earnings Others 281, , Chunghwa Post Annual Report

21 IV.Corporate Governance Report 肆 公司治理報告 貳 Supervisor Supervisor 2 W.H.Lu (Note 2) 3 H.Y.Huang (Note 3) The Remuneration Gaps Among Supervisors 2,000,000 below NT$2,000,000 2,000,0005,000,000 NT$2,000,000 (including) NT$5,000,000 Total Name of Supervisors S.F. LinC.T.HuangC.H. LuW.H.LuH.Y.Huang Note 1 Supervisor S. F. Lin was discharged on Jan. 8, Supervisor W. H. Lu took his seat on Jan. 9, 2008 and was discharged on Sept. 19, Supervisor H. Y. Huang took her seat on Oct. 13, The Remuneration of President and Vice Presidents Jan. 1, 2008 Dec. 31, 2008 Title President Vice Preident Vice Preident Vice Preident Vice Preident Name 1 S.Y. Hu (Note 1) T. F. Su S.C. Huang Y.A. Yen 1 T.D. Chen (Note 1) Salary Bonus Total () Percentage of Net Earning Others 8,093,282 3,102,425 11,195,707-1,186,493 The Remuneration Gaps Among President and Vice Presidents 2,000,000 below NT$2,000,000 2,000,0004,999,999 NT$2,000,000 (including) NT$4,999,999 5,000,00010,000,000 NT$5,000,000 (including) NT$10,000,000 Total Name of President and Vice Presidents S.Y. HuT. F. SuS.C. HuangY.A. YenT.D. Chen Chunghwa Post Annual Report 35

22 貳 肆 公司治理報告 IV.Corporate Governance Report () 100% 3 Note 1: President S.Y. Hu took her seat on June 11, Vice President T.D. Chen took his seat on Aug.1, : As a government-operated enterprise, with the government as the 100% stockholder, no Distribution of Earnings and the Certificate of Stock Option for Earnings. 3: Bonuses are temporary estimates. 三 公司治理運作情形 ( 一 ) 董事會運作情形 977 III. Governance and Operations (I) Board Meetings Attendance of Board Meetings (7 total) for 2008 Title ( 1) Name (Note 1) () Attendance in Person Attendance by Proxy (%) /(2) Actual Attendance Rate (Note 2) Notes Chairperson Chairperson N.H. Ho M.Y. Wu S.Y. Hu T.F. Su Y.R. Liu S.Y. Chou C.M. Feng Discharged his concurrent position on June 11, Took his seat on June 11, Took her seat on June 11, Took her seat on Feb. 21, Resigned on Apr Took his seat on July 25, Resigned on Oct Took his seat on Oct. 6, Chunghwa Post Annual Report

23 IV.Corporate Governance Report 肆 公司治理報告 貳 Supervisor W.H. Chen J.S. Liu C.H. Fu K.L. Chang P.Y. Chang S.C. Huang M.H. Hsieh K.I. Huang D.H. Hsiao Y.C. Shen K.M. Cheng H.C. Lu C.T. Huang Discharged his concurrent job on March 19, Took his seat on July 25, Discharged his concurrent position on Dec. 10, Took his seat on Dec. 10, Chunghwa Post Annual Report 37

24 貳 肆 公司治理報告 IV.Corporate Governance Report Supervisor C.H. Lu Supervisor Supervisor Supervisor S.F. Lin W.H. Lu H.Y. Huang Discharged his concurrent job on Jan. 9, Discharged his concurrent job on Sept. 19, Took her seat on Oct. 13, Others: I. Any matter listed in Article 14-3 of Securities and Exchange Act as well as any recorded board resolution for which an independent director has a dissenting opinion or qualified opinion should be noted in the minutes, detailing its date, term, issue, all opinions of the independent director(s) and how the company handles it. II. In the event that a director has to avoid voting on a resolution because of a conflict of interest, the name of the director, the content of the resolution, reasons and the result of the vote should be noted. III. Goals (such as setting up an audit committee and raising information transparency) of the board for the year and the closest fiscal year as well as evaluation of its work ()(%) Note :1. When a board director or a supervisor works for a legal person, the legal person's name (company name) and the name of its responsible person should be disclosed. 2. By the end of a year, the dates of any board directors or supervisors' resignations and their actual attendance rate should be noted. ( 二 ) 公司治理運作情形及其與上市上櫃公司治理實務守則差異情形及原因 : (II) Governance and operation of the company as well as its divergence from Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and reasons. Item Status of Operation Divergence from Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and reasons 38 Chunghwa Post Annual Report

25 IV.Corporate Governance Report 肆 公司治理報告 貳 I. Equity Structure and Shareholder Rights (1) How the company handles shareholder suggestions and disputes (2) Company's control of the list of its major shareholders and final decision-makers (3) How the company establishes its risk-management mechanism and firewalls involving related enterprise II. Organization and Responsibilities of of Directors (1) Establishment of independent directors (2) Regular assessment by independent CPA III. Organization and Responsibilities of the Panel of Supervisors (1) Establishment of independent supervisors (2) Communications between company employees and supervisors (1) Chunghwa Post is not a publiclisted nor an OTC company. Therefore, the company has not issued stock. (2) The company is a state-run corporation with MOTC as its sole share holder. (3) The company has no affiliated enterprises as prescribed in Article of the Company Act. (1) None designated at present. (2) Company auditors are hired in accordance with the Government Procurement Law. The contract is reviewed on a yearly basis. (1) None designated at present. (2) Corporate supervisors are invited to attend all board meetings; corporate supervisors may, at any time, investigate the company's business and financial situation, and audit the company's accounts and paperwork. The company, in accordance with the "Enforcement Regulations For Bank Internal Audit Control System" by the Ministry of Finance, has established an internal control system, a chief auditor system and an audit department under the board of directors to conduct unprejudiced auditing in order to firmly implement the internal control system. 100% The company is 100% owned by the government, and all directors are appointed by the MOTC. The third board of directors of the company consisted of 15 directors. Three of the board directors had special expertise, providing professional opinions and enhancing the professionalism and independence of the board. Three board members represented the employees, bringing input from below, serving the function of communication, coordination and monitoring. 3 3 The company is 100% owned by the government, and all supervisors are assigned by the MOTC. The third board of the company had three supervisors, who monitored the financial situation and the execution of the company's business in accordance with law and the company's articles of incorporation. Chunghwa Post Annual Report 39

26 貳 肆 公司治理報告 IV.Corporate Governance Report IV. Communications channels with related parties V. Disclosure of information (1) Through company website (2) Others such as an English website, personnel in charge of collecting and disclosing information, implementation of spokesman system, shareholder meeting records on company's website, etc. VI. Status of operations for the company's audit committee, etc Customers may write to the company through the box on its website or call its toll free customer hotline for suggestions, complaints or disputes. (1) The company has set up a global website to disclose company information. (2) The company has issued Guidelines for Chunghwa Post Press Releases. None at present time In accordance with Regulations Governing the Internal Controls and Audit System for Postal Remittances and Savings, proclaimed by the MOTC and the MOF, the company has established an internal control system, an audit system and a department of auditing under the board. VII. Please detail the company's governance and operation, as well as the differences and reasons for deviations from the Corporate Governance Best-Practice Principles for Banks: (see above) VIII. Other important information that is helpful for the understanding of the governance of the company (such as training of directors and supervisors, attendance in board meetings by directors and inspectors, implementation of risk management policies and risk measurement standards, implementation of consumers or customers protection policies, directors' avoidance of conflicts of interests, company's purchase of liability insurance for the directors and supervisors and social responsibility) Status for Further Study for Directors and Supervisors in 2008: 40 Chunghwa Post Annual Report

27 IV.Corporate Governance Report 肆 公司治理報告 貳 Courses given by Date of Training Course Title Courses taken by Taiwan Academy of Banking and Finance /16/08 Corporate governance and financial integration seminar P.Y. Chang H.C. Lu K.M. Cheng Taiwan Securities Association /14/08 An overview of China's contract law and responsibilities of directors K.M. Cheng Taiwan Securities Association /09/08 Corporate governance and financial crisis management M.Y. Wu M.H. Hsieh W.H.Chen Y.C. Shen K.M. Cheng Taiwan Securities Association /13/08 Promotion and implementation of corporate governance P.Y. Chang Y.C. Shen K.M. Cheng Taiwan Securities Association /20/08 A study on money laundry prevention and cases P.Y. Chang C.H. Fu The Life Insurance Association of the Republic of China /07/08 / Corporate governance and internal control/ Corporate governance and performance management C.M.Feng P.Y. Chang The Life Insurance Association of the Republic of China /11/08 A study on joint and several liabilities of owners of insurance companies Life insurance company financial statements interpretation and common issues P.Y. Chang The Life Insurance Association of the Republic of China /19/08 Legal arrangement of coporate governance and election of independent directors Operation and obligations of board of directors, shareholders' meeting and superviors M.H. Hsieh The Life Insurance Association of the Republic of China /21/08 / Property insurance companies risk management/ Property insurance companies solvency ability and warning system C.M.Feng The Life Insurance Association of the Republic of China /26/08 Legal arrangement of coporate governance and election of independent directors Operation and obligations of board of directors, shareholders' meeting and superviors K.M. Cheng The Life Insurance Association of the Republic of China /28/08 / Corporate governance and internal control/ Corporate governance and performance management P.Y. Chang Chunghwa Post Annual Report 41

28 貳 肆 公司治理報告 IV.Corporate Governance Report The Life Insurance Association of the Republic of China /29/08 / Studies on coporate governance system andoperation of board of directors/legal risk control of property insurance companies P.Y. Chang Regarding risk management: in accordance with the regulations set by its competent authorities, the company has assessed its operational risk and urged all operational departments to take necessary measures. To ensure the effectiveness of its promotion of its risk management policies, all operational departments are required to submit a quarterly report on the execution of its risk management work, which will be submitted to the company's risk management committee periodically. 3. Regarding consumer protection and customer policy: Contracts between the company and its clients have all been revised in accordance with the regulations of the Consumer Protection Law in an effort to avoid disputes resulting from advertisements and standard contracts. 4. In accordance with the company's articles of incorporation, a member of the company's board directors should not vote in any resolution where there is a conflict of interest or duties. 5. All senior management and departments of the company operate in accordance with the company's division of work chart. 6. The company puts great importance on its corporate social responsibility: apart from offering loans in accordance with government policies (see page 81), the company has actively participated in fundraisers and activities for the public good, as well as encouraged its branches to take initiatives to partake in regional activities for the public good and implement environmental protection measures. ( 三 ) 揭露公司治理守則及相關規章之查詢方式 : ( 四 ) 揭露其他足以增進對公司治理運作情形瞭解之重要資訊 : (III) Disclosure of Corporate Governance Best-Practice Principles and how to locate relevant regulations: Make disclosures on the company's website in accordance with Corporate Governance Best-Practice Principles for Banks. (IV) Disclosure of important information about the governance and operations of the company: Disclosed in the company's website. 42 Chunghwa Post Annual Report

29 IV.Corporate Governance Report 肆 公司治理報告 貳 ( 五 ) 內部控制制度執行狀況 ,3211,361 1,747 2, (V) Implementation of internal control system 1. Establishment and implementation of internal control system Internal control system aims to provide reasonable assurance regarding the achievement of the objectives of the company's operations, financial reporting, and compliance with applicable laws and regulations. The company has established an internal control system. An internal control system has its own limitations, and no matter how well it is designed, effective internal control systems can only provide reasonable assurance regarding the achievement of the three above-mentioned objectives. In addition, as the environment and situations of a company changes, the effectiveness of its internal control system will change with it. However, the company's internal control system is equipped with a self-monitoring mechanism, and as soon as a problem is identified, the company shall take action to correct it immediately. 2. Implementation of internal and external audit system The purpose of internal audit system is to objectively assist the board of directors and the company's management team in inspecting and evaluating the performance of its internal control system and make timely suggestions to ensure its continual effectiveness. In 2008, in accordance with Regulations Governing the Internal Controls and Audit System for Postal Remittances and Savings, Regulations Governing the Internal Controls and Audit System for Insurance, Regulations Governing the Internal Audit System of Chunghwa Post and the 2008 Audit Plan, the company's audit department performed 1,361 general audits and 1,747 case audits on the 12 departments, 23 responsibility center offices, 5 mail processing centers and 1,321 smaller branches as well as 2,956 cash audits on the operational units of the company. In addition, the department has, in accordance with regulations, submitted reports to the board of directors and continued to conduct follow-up evaluations on the suggestions and flaws found by the Financial Supervisory Commission, Central Bank of the ROC and other external audit units such as the company's CPA. 3. Internal Control Statement see pages Chunghwa Post Annual Report 43

30 貳 肆 公司治理報告 IV.Corporate Governance Report 44 Chunghwa Post Annual Report

31 IV.Corporate Governance Report 肆 公司治理報告 貳 Internal Control Statement Savings and Remittances The results of internal examination of our company's internal control system regarding the business of Postal Savings and Remittances for the period from January 1, 2008 to December 31, 2008 are hereby declared as follows: 1. The company understands that establishing, implementing, and maintaining an internal control system is the responsibility of the company's board of directors and management team. The company has established such a system. The internal control system aims to provide reasonable assurance regarding the achievement of the objectives of the company's operations, financial reporting, and compliance with applicable laws and regulations. These objectives include effective and efficient operations, reliable financial reports, and compliance with applicable laws and regulations. The financial data and statements are compiled in accordance with the Business Accounting Act, Postal Remittances and Savings Act and other applicable laws and regulations. 2. The Internal control system has its own limitations, and no matter how well it is designed, an effective internal control system can only provide reasonable assurance regarding the achievement of the three above-mentioned objectives. In addition, as the environment and circumstances of the company change, the effectiveness of its internal control system will change with it. However, the company's internal control system is equipped with a selfmonitoring mechanism, and as soon as a problem is identified, the company will take action to correct it immediately. 3. The company evaluates the design and effectiveness of its internal control system based on the Regulations Governing the Internal Controls and Audit System for Postal Remittances and Savings (promulgated by the MOTC and the MOF) and the Processing Guidelines for the Establishment of Internal Control System by Securities and Futures Market Business Sectors. The system consists of five components: (1) control environment (2) risk assessment (3) control activities (4) information and communication (5) monitoring. 4. The company has adopted the five above-mentioned components so as to evaluate the design and effectiveness of its internal control system. 5. Based on the results of its evaluation as mentioned above, the company believes that the design and execution of its internal control system during the aforementioned period was effective and was able to provide reasonable assurance regarding the achievement of the objectives of the company's operations, financial reporting, and compliance with applicable laws and regulations. The company also believes that the financial data and statements of the company were compiled in accordance with the Business Accounting Act, Postal Remittances and Savings Act and other applicable laws and regulations. 6. This statement was approved by the company's board of directors during its board meeting on April 24, The 15 attending directors unanimously approved this statement. Chunghwa Post Co., Ltd. Chairperson: Wu Min-yu President: Hu Sheue-yun Auditor General: Yen Yung-teng Chief Compliance Officer: Su Da-hsiung Date: April 24, 2009 Chunghwa Post Annual Report 45

32 貳 肆 公司治理報告 IV.Corporate Governance Report 46 Chunghwa Post Annual Report

33 IV.Corporate Governance Report 肆 公司治理報告 貳 Internal Control Statement Simple Life Insurance The results of internal examination of our company's internal control system regarding the business of Simple Life Insurance for the period from January 1, 2008 to December 31, 2008 is hereby declared as follows: 1. The company understands that establishing, implementing, and maintaining an internal control system are the responsibilities of the company's board of directors and management team. The company has established such a system. The internal control system aims to provide reasonable assurance regarding the achievement of the objectives of the company's operations, financial reporting, and compliance with applicable laws and regulations. The objective of the company's operation is effectiveness and efficiency, including performance and profitability goals and safeguarding of resources; the goal of financial reporting is to provide reliable published financial statements; compliance refers to complying with those laws and regulations to which the company is subject. The financial data and statements are compiled in accordance with the Insurance Act, Simple Life Insurance Act, and other applicable laws and regulations. 2. The Internal control system has its own limitation, and no matter how well it is designed, an effective internal control system can only provide reasonable assurance regarding the achievement of the three above-mentioned objectives. In addition, as the environment and circumstances of the company change, the effectiveness of its internal control system will change with it. However, the company's internal control system is equipped with a self-monitoring mechanism, and as soon as a problem is identified, the company shall take action to correct it immediately. 3. The company evaluates the design and effectiveness of its internal control system based on the Regulations Governing the Internal Controls and Audit System of an Insurance Company (promulgated by the Financial Supervisory Commission) and the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets (promulgated by the Securities and Futures Bureau, Financial Supervisory Commission). The system consists of five components: (1) control environment (2) risk assessment (3) control activities (4) information and communication (5) monitoring. For what factors into these components, please see the Regulations Governing the Internal Controls for Listed Companies. 4. The company has adopted the five components as mentioned above to evaluate the design and effectiveness of the internal control system for its simple life insurance business. 5. Based on the results of its evaluation as mentioned above, the company believes that the design and execution of the internal control system for its simple life insurance business during the aforementioned period was effective and was able to provide reasonable assurance regarding the achievement of the objectives of the company's operations, financial reporting, and compliance with applicable laws and regulations. The company also believes that the financial data and statements of the company were compiled in accordance with the Insurance Act, Simple Life Insurance Act and other applicable laws and regulations. 6. This statement is a major part of the company's annual report and will be made public. Under Articles 20, 32, 171 and 174 of the Securities Transaction Act, as well as Insurance Act and Simple Life Insurance Act, any fraudulent statements or intentional failure to make the necessary disclosure will incur legal responsibility. 7. This statement was approved by the company's board of directors during its board meeting on April 24, Chunghwa Post Co., Ltd. Chairperson: Wu Min-yu President: Hu Sheue-yun Auditor General: Yen Yung-teng Chief Compliance Officer: Su Da-hsiung Date: April 24, 2009 Chunghwa Post Annual Report 47