貳 IV.Corporate Governance Report IV.Corporate Governance Report 15 19 34 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) meetings (II) Governance and operation of company as well as its divergence from Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and reasons (III) Disclosure of corporate governance bestpractice principles and how to locate relevant regulations (IV) Disclosure of important information about governance and operations of 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 board of directors (IX) Resignation of person related to company's financial reports 14 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 一 組織系統 ( 一 ) 組織結構 1. 1115 2. 3 3. 1 4 11 4. 1 5. 1 51 6. 13 7. 23 8. 5 I. Organization (I) Organization The organizational structure of Taiwan Post includes following: (1) The board of directors. The board is composed of 11 to 15 directors. According to law and company's own Articles of Incorporation, this is company's decision-making body. In addition, re is a board secretariat responsible for all administrative affairs of board. (2) Three supervisors. According to law and company's own Articles of Incorporation, supervisors are charged with supervising company's financial and business operations. (3) A president. According to law and company's own Articles of Incorporation, president is responsible for carrying out board decisions, overseeing corporate operations, as well as supervising all staff and departments of company. The president shall be assisted by four vice presidents and one chief secretary. In addition, re is an office of president, headed by a director. (4) An auditor general (elected by board of directors) and an auditing department directly under board. The auditor general and auditing department are responsible for conducting audits of company and making regular reports to 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) T h e c o m p a n y h a s 1 3 d e p a r t m e n t s : t h e Department of Mail Business, Department of Mail Operations, Department of Philately, Department of Savings and Remittances, Department of Life Insurance, Department of Property Operations, Department of Capital Operations, Department of Maintenance, Department of Personnel, Department of Civil Service Ethics, Department of Accounting, Department of Information Management, and 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. Taiwan Post Annual Report 15
貳 IV.Corporate Governance Report ( 二 ) 組織系統圖 Organization Chart 16 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 ( 三 ) 機構設置與調整 : 2 22 郵政機構設置比較表 Comparative Chart of Postal Establishments (III) Postal Establishments and Changes in Their Numbers: Currently, postal establishments include administrative facilities as well as post offices and contracted agencies. The postal establishments and changes y have undergone in last two years are shown in following chart. 單位 : 處 Unit: Office Types of Postal Establishments 942005 952006 Administration Establishments Post Offices Contracted Agency Headquarters 1 1 Post Offices 23 23 Total 24 24 Mail Processing Centers 5 5 Offices 1,315 1,314-0.08 Temporary Post Offices 7 7 Total 1,327 1,326-0.08 Agencies 1,264 627-50.40 Stamp Sales Agencies 3,805 3,364-11.59 Total 5,069 3,991-21.27 Grand total 6,420 5,341-16.81 951 (127) 95530 Notes: In 2006, one postal facility was merged into anor Name: Taipei Rensin Post Office (Taipei 127) Date: May 30, 2006 Merged into: Taipei Chiang Kai-shek Memorial Hall ( 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 credit analysis of life insurance business's real estate mortgage loans, etc. * Strategic Planning Committee: Reviewing company's major business and investment plans as well as devising company's reorganization policies, etc. * Office of President: 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 or eliminating postal regulations and reviewing any dubious interpretations; reviewing manuscripts; and Taiwan Post Annual Report 17
貳 IV.Corporate Governance Report communicating with elected officials, etc. * Department of Mail Business: Planning and promoting mail business plans and marketing strategies; setting and adjusting postal rates; establishing, closing and changing status of postal facilities, etc. * Department of Mail Operations: Planning and supervising collection, dispatch, transport and delivery of mails; ensuring safety of mail operations, etc. * Department of Philately: Developing, planning, promoting and assessing philately business; developing, designing, manufacturing and selling philately products, etc. * Department of Savings and Remittances: Drafting operational policy and goals; handling collection, safekeeping and review for its agential business; dealing with investigations of judicial and tax collection agencies, etc. * Department of Life Insurance: Drafting and overseeing development plans and operational goals of 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 projects, joint development projects, and postal properties utilization; as well as managing postal properties, etc. * 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 Maintenance: Planning, supervising and evaluating machinery and automobile maintenance; adopting, researching and developing automated mail processing systems, etc. * 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 budget and 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; 18 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 announcing financial information, etc. * Department of Information Management: Researching, analyzing and selecting new IT systems, network, software and hardware equipment; drafting and implementing office automation; drafting 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. 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 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 96 年 5 月 0 日 Title Information about Directors and Supervisors May 30, 2007 Name Education Prime Experience () Date Elected Or current position(s) N.H.Ho PhD from Chunghwa Director General of Taiwan Area National Freeway Bureau Director General of Bureau of Taiwan High Speed Rail Managing Director of Taiwan Railway Administration 96.03.03 03/03/07 Vice Minister, Ministry of Transportation & Communications, Yang Ming Group Chairperson, Taiwan Post M.Y. Wu Law, NTU Vice President, Chunghwa Post (CHP) 95.05.11 05/11/06 President, Taiwan Post Supervisor, Mega Holdings Taiwan Post Annual Report 19
貳 IV.Corporate Governance Report T.F. Su Law, NTU Director, Chunghwa Post (CHP) 95.08.25 08/25/06 Vice President, Taiwan Post K.H. Ding Masters in Public Finance, Chengchi Chairman, Securities and Futures Commission, Ministry of Finance 95.05.11 05/11/06 Chairman, Securities & Futures Institute, Financial Information Service Co., Ltd. K.L. Chang Masters in City & Regional Planning, of Pennsylvania Deputy Director, Council for Economic Planning and Development 95.05.11 05/11/06 Director, Council for Economic Planning and Development, China Engineering Consultants, Inc. P.Y. Chang PhD in Economics, National Taiwan Associate Professor, Department of Economics, Fujen 95.05.11 05/11/06 Assistant Director General, Central Bank of Republic of China (Taiwan) S.C. Huang Department of Accounting & Statistics, Tamkang Special Commissioner, DGBAS, Executive Yuan 95.05.11 05/11/06 Deputy Director-general, Department of Statistics, MOTC W.H Chen PhD in Management Science, State of New York at Buffalo Chairperson of Department and Graduate Institute of Business Administration, NTU 95.08.25 08/25/06 Professor in Department and Graduate Institute of Business Administration, NTU C.H. Fu Doctoral studies in Economics, of Texas at Austin Deputy Executive Secretary, Taxation and Tariff Committee, Ministry of Finance 95.05.11 05/11/06 Counselor, Ministry of Finance Supervisor, China Development Financial Holding Corporation 20 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 M.H. Hsieh Masters, Institute of Shipping & Transportation Management, Taiwan Ocean Deputy Director, Department of Transportation, Taiwan Provincial Government 95.05.11 05/11/06 Director-General, Kaohsiung Harbor Bureau, CSBC Corp.,Taiwan D.H. Hsiao Masters, Institute of Management Science, Chiaotung Director, Information Management Office, Keelung Harbor Bureau 95.05.11 05/11/06 Director-General, Keelung Harbor Bureau Y.C. Shen Department of Public Admin., Chunghsing Taipei Dingjhou Post Office 95.05.11 05/11/06 Taipei Hanjhong St. Post Office H.C. Lu Kaohsiung Institute of Technology Former Deputy Secretarygeneral, Postal Workers' Union 95.05.11 05/11/06 Vice Chairman, Chunghwa Post Workers'Union K.M. Cheng Air Force Institute of Technology Former Chairman, Chunghwa Postal Union 95.05.11 05/11/06 Director, CPWU Taipei Clerk, Taipei Post Office Supervisor C.H. Lu MBA, Concordia Wisconsin Accounting, Ministry of Examination 95.05.11 05/11/06 2 Vice Director-general, Second Dept., DGBAS, Executive Yuan Supervisor, Taiwan High Speed Rail Supervisor S.F. Lin Department of International Trade, Fengchia Section Chief, DGBAS, Executive Yuan 95.05.11 05/11/06 Special Commissioner, Dept. of Accounting, MOTC Supervisor C.T. Huang Masters, Institute of Public Administration Chengchi Deputy Director, 3rd Dept. Executive Yuan 95.05.11 05/11/06 Director, 3rd Dept. Executive Yuan Taiwan Post Annual Report 21
貳 IV.Corporate Governance Report 9511~951231 Jan. 1, 2006~Dec. 31, 2006 Title Name Education Prime Experience Date Resigned of Directors Note J.S. Hsu MBA from Chinese Culture Chairperson, CHP 1. 95.05.10 5/10/06 2. 95.08.06 1. 1 Completed term on Chunghwa Post's first board of directors 8/6/06 2. 95.05.262 95.08.06 Appointed to a second term of board on May 26, 2006; submitted resignation on August 6, 2006 C.H. Chen Department of Law, National Taiwan Vice President, CHP 95.07.16 07/16/06 1. 95.05.112 Appointed to second board of directors of Chunghwa Post on May 11, 2006 2. 95.07.16 Retired from post on July 16, 2006 S.S. Wu PhD of Finance, Insurance and Real Estate, Florida State Chariman, Department of Management Science, Chiaotung. 95.05.10 05/10/06 1 Completed term on Chunghwa Post's first board of directors J.S. Liu 95.05.10 05/10/06 1 Completed term on Chunghwa Post's first board of directors M.H. Lan Shihhsin Former Vice Secretary- General, CPWU 95.05.10 05/10/06 1 Completed term on Chunghwa Post's first board of directors 22 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 監察人 Supervisor 楊明祥 M.S. Yang 95.05.10 05/10/06 擔任本公司第 1 屆監察人任期屆滿 Completed term on Chunghwa Post s first Supervisor C.C. Lai Masters in Public Finance, Chengchi Deputy Secretary- General, Executive Yuan 96.03.03 03/03/07 1. 95.05.112 Was appointed to board at a full meeting of Chunghwa Post's second of Directors on May 11, 2006 2. 96.03.02 Submitted resignation on March 2, 2007 1. 96516 Principal Corporate Shareholder May 16, 2007 Corporate Shareholder Name Ministry of Transportation and Communications Principal Corporate Shareholder Since Taiwan Post is a 100% state-owned enterprise, this is not applicable. 2. 960430 Information about Directors and Supervisors Apr. 30, 2007 Name N.H.Ho M.Y. Wu T.F. Su K.H. Ding W.H.Chen K.L. Chang P.Y. Chang Qualification 5 years experience in field of business, law, finance, or banking 1 2 3 4 5 6 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 Notes Taiwan Post Annual Report 23
貳 IV.Corporate Governance Report S.C. Huang C.H. Fu M.H. Hsieh D.H. Hsia H.C. Lu Y.C. Shen K.M. Cheng S.F. Lin C.T. Huang C.H. Lu 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 1. 2. 3. 4. 5. 6. Note: 1. Neir an employee of company, nor a director, supervisor, or employee of an affiliated enterprise. 2. Neir, directly or indirectly, owns more than 1% of Taiwan Post's outstanding shares, nor a top-ten individual shareholder. 3. Neir spouse nor an immediate relative of a person specified in Notes (1) and (2). 4. Neir a director, supervisor, or employee of a legal person shareholder who, directly or indirectly, owns more than 5% of Taiwan Post's outstanding shares, nor a director, supervisor, or employee of a legal person shareholder who is a top-five shareholder of Taiwan Post. 5. Neir a director, supervisor, or manager of a company or institution doing business or having a financial relationship with company, nor a shareholder holding 5% or more of company's outstanding shares. 6. Neir a professional nor an owner, partner, board director, supervisor, manager, or a spouse of any of above-mentioned of a company or institution that had provided financial, business, or legal services to company in most recent fiscal year. 24 Taiwan Post Annual Report
IV.Corporate 96510 Governance May 10, 2007 Report 貳 9633 Lai Ching-chyi, Former Chairperson (Finished his term in office on March 3, 2007) 95716 95316510 Chen Chi-hsiung, Former Vice President(Finished his term in office on July 16, 2006, from March 16 to May 10, 2006, he took seat of Acting Chairperson and President.) Su Tian-fuh, Vice President Hu Sheue-yun, Vice President Huang Shu-chien, Vice President Yen Yung-an, Vice President Yeh Shun-min, Auditor General Chou Wu-hsiung, Chief Secretary Taiwan Post Annual Report 25
貳 IV.Corporate Governance Report ( 二 ) 總經理 副總經理 各部門及分支機構主管資料 96 年 5 月 0 日 Title President, vice presidents, and senior management Name Education Prime Experience Date Elected May 0, 007 Or Current Position(s) President M.Y. Wu Law, NTU Vice President, CHP 95.05.11 05/11/06 Member of Committee for Planning and Promoting Utilization of Long- Term Funding of Council for Economic Planning & Development Member of Anticorruption Newsletter, MOTC Vice President T.F. Su Law, NTU Director, Mail Business Dept., CHP 92.08.13 08/13/03 Vice President S.Y. Hu MBA, Oregon State Auditor General, CHP 94.09.15 09/15/05 Standing Supervisor, Cathay United Bank Member of Sexual Equality Task Force, MOTC Vice President S.C. Huang Architecture, Chengkung Chief Secretary, CHP 95.07.17 07/17/06 Director, Chunghwa Express Vice President Y.A. Yen Masters, Chengchi Director, Capital Operations Dept., CHP 95.07.17 07/17/06 Auditor General S.M. Yeh Law, NTU Vice President, CHP 94.09.15 9/15/05 Chief Secretary W.H. Chou Law, Soochow Director, Savings & Remittances Dept., CHP 95.07.17 07/17/06 26 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Director, Philatelic Dept. Director, Mail Business Dept. Director, Mail Operation Dept. Director, Savings & Remittances Dept. Director, Life Insurance Dept. D.H. Su J. M. Chang C.D. Lu R. Y. Chou J.C. Chen Public Administration, Chunghsing Law, Chengchi Law, NTU Political Science, NTU Law, Chengchi Director, Occupational Safety and Health Dept., CHP Member of Strategic Planning Com.(SPC) Taichung Assistant Taipei Changhwa 92.10.03 10/03/03 95.07.19 07/19/06 93.11.18 11/18/04 95.07.17 07/17/06 94.07.16 07/16/05 Director, Chunghwa Express Director, Property Operations Dept. Y.C. Huang Master of Civil Engineering, Thailand Asian Institute of Technology Former Maintenance, DGP 92.01.01 01/01/03 Director, Capital Operations R. S. Chen Masters in Finance, NTU Senior Executive, CHP 95.11.22 11/22/06 Staff member of Committee for Planning and Promoting Utilization of Long-Term Funding of Council for Economic Planning & Development Taiwan Post Annual Report 27
貳 IV.Corporate Governance Report Director, Maintenance Dept. H.N. Wang, Director, Occupational Safety and Health Dept., CHP Director, Personnel Dept. Y.T. Yen Law, NTU Former Personnel, DGP 92.01.01 01/01/03 Director, Ethics Dept. C.C. Chang Law, NTU Keelung 94.04.27 04/27/05 Director, Accounting Dept. I.H. Wu Commerce, NTU Senior Executive & Deputy Director, Accounting Dept., CHP 93.09.07 09/07/04 Supervisor, Chunghwa Express Director, Information Management Dept. P.Y. Lu Business Admin., Fengchia Senior Executive & Acting Director, Mail Operation Dept., CHP 93.12.10 12/10/04 Member of Banking Automation Committee, Bankers Association of ROC Director, Occupational Safety and Health Dept. H.N. Wang Law, Chunghsing Director, Mail Business Dept., CHP 95.07.19 07/19/06 Taipei S.D. Chen Masters in Management Science, Chiaotung Director, Information Management Dept., CHP 93.11.19 11/19/04, Chunghwa Express Taichung S.C. Chen Economics, NTU Assistant Taichung 93.11.18 11/18/04 28 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Kaohsiung C.C. Su Public Administration, Chunghsing Assistant Taipei 93.07.05 07/05/04 Panchiao M.S. Chen Labor Relations, Chinese Culture Taoyuan 93.01.16 01/16/04 Sanchung M.Y. Shen Public Administration, Chengchi Univ. Assistant Panchiao 94.07.16 07/16/05 Chungli C.H. Tseng Economics, Fujen Deputy Director, CHP 93.07.16 07/16/04 Taoyuan C. Wang Commerce, NTU Deputy Director, CHP 94.05.01 05/01/05 Keelung Braneh S.C. Tsai Masters in Politics, NTU Assistant Taipei 94.04.27 04/27/05 Changhua M.L. Hung Law, NTU Secretary, CHP 94.07.15 07/15/05 Fengyuan C.C. Yao German, Fujen Assistant Changhua 92.02.27 02/27/03 Hsinchu Y.C. Meng Transportation & Communication Management, Chengkung Section Chief, Taichung 92.10.13 10/13/03 Taiwan Post Annual Report 29
貳 IV.Corporate Governance Report Chiayi Tainan Fengshan Ilan S.O. Huang Y.C. Chiu C.Y. Lin C.H. Ho Masters in Management, Chengkung English, Kaohsiung Normal Institute. Law, Chinese Culture Insurance, Tamkang Hsingying Taitung Hsingying 25 Ilan 25 93.08.24 08/24/04 93.01.16 01/16/04 94.07.16 07/16/05 94.07.16 07/16/05 Miaoli Y.J. Chu International Trade, Fengchia Univ. 47 47th, Hsinchu PO 92.10.17 10/17/03 Nantou Yunlin Hsinying C.C. Ho C.C. Chang K.H. Yang Open Junior College Horticulture, Chiayi Agriculture College Political Science, NTU Business Admin. Sec. Chief, Taichung Section Chief, Taichung Director, Tainan MPC 94.08.15 08/15/05 94.09.09 09/09/05 96.01.16 01/16/07 96.01.16 Note: Former manager Y.S. Huang resigned on 01/16/2007 Pintung Y.L. Chen Chinese, Kaohsiung Normal Institute Deputy Director, Kaohsiung Mail Processing Center 93.01.15 01/15/04 30 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Hualien C.H. Ku International Trade, Open Junior College Auditor, CHP 94.07.15 07/15/05 Taitung Penghu Director, Taipei Mail Processing Center Director, Taoyuan MPC Director, Taichung MPC Director, Tainan MPC Director, Kaohsiung MPC K.H. Shen L.S. Tu S.S. Chen C.K. Wu C.T. Yen Y.C. Chiu C.K. Chen Business Administration, Chengkung Open Junior College Law, NTU English, Tamgkang Public Administration, Open Junior College Urban Affairs, Chinese Culture Auditor, CHP Section Chief, Fengshan Auditor, CHP Section Chief, Taipei Taitung Section Chief, Kaohsiung 94.07.15 07/15/05 94.07.15 07/15/05 92.02.24 02/24/03 94.01.16 01/16/05 94.07.16 07/16/05 92.02.21 02/21/03 Taiwan Post Annual Report 31
貳 IV.Corporate Governance Report ( 三 ) 最近年度支付董事 監察人 總經理及副總經理之報酬 (III) The remuneration of members of board, supervisors, president and vice presidents in last fiscal year 1. 9511951231 The Remuneration of Members of Jan. 1, 2006 Dec. 31, 2006 Title Name Salary Bonus Part-time Job Pay Distribution of Net Earnings Percent of Net Earnings Ors Chairperson Chairperson 1 J.S. Hsu 2 C.C. Lai 2 S.C.Huang 2 M.Y. Wu 2 T.F. Su 2 C.H. Chen 3 J.S. Hsu K.H. Ding 4 S.S. Wu 4 J.S. Liu W.H.Chen K.L. Chang P.Y. Chang S.C. Huang C.H. Fu M.H. Hsieh D.H. Hsia 2 Y.C. Shen 2 K.M. Cheng 2 M.H. Lan 454,822 795,615 0 0 0 1,278,014 16,647 0 0 53,995 0 0 0 0 0 0 0 0 0 0 0 0 20,800 0 0 93,600 0 0 62,400 0 0 62,400 0 0 31,200 0 0 91,000 0 0 104,000 0 0 104,000 0 0 96,000 0 0 64,000 0 0 88,000 0 0 0 0 0 0 0 0 0 0 0 32 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 2 H.C. Lu 0 0 0 1 95.3.1695 2 95.3.1695.7.16 95.5.10 3 95.5.2695.8.6 4 95.5.1095.5.10 5 () 100% Note 1 Chairperson J. S. Hsu finished his term in office on March 16, 2006. During his term in 2006, he received only a monthly salary and no honorarium. Note 2 Chairperson C.C. Lai and board directors S.C. Huang, C. H. Chen, M.Y. Wu, T.F. Su, Y.C. Shen, K.M. Cheng, and M.H. Lan received only monthly salaries and no honorariums. S.C. Huang finished his term in office on March 16, 2006; C. H. Chen finished his term in office on July 16, 2006; M.H. Lan finished his term in office on May 10, 2006. Note 3 J.S. Hsu became a board director on May 26, 2006 and finished his term on August 6, 2006. Note 4 S.S. Wu finished his term in office on May 10, 2006; C.C. Liu finished his term in office on May 10, 2006. Note 5 As a 100% state-owned enterprise, re is no distribution of earnings, employee bonuses, and stock options. 2. 監察人之報酬 95 年 1 月 1 日至 95 年 12 月 31 日 The Remuneration of Supervisors Jan. 1, 2006 Dec. 31, 2006 職稱 Title 監察人 Supervisor 監察人 Supervisor 監察人 Supervisor 監察人 Supervisor 姓名 Name 林信夫 S.F. Lin 黃志聰 C.T.Huang 楊明祥 M.S.Yang 呂秋香 C.H. Lu 兼職費 Parttime Job Pay 盈餘分配之監察人酬勞 Remuneration from Distribution of Net Earnings 前二項總額 Total 總額占稅後純益之比例 (%) Percentage of Net Earnings 96,000 0 96,000 0 96,000 0 96,000 0 24,000 0 24,000 0 53,419 0 53,419 0 其他報酬 Or Remunerations 95.5.10 Note : M.H. Yang finished his term in office on May 10, 2006 3 9511951231 The Remuneration of President and Vice Presidents Jan. 1, 2006 Dec. 31, 2006 職稱 Title 總經理 President 總經理 President 姓名 Name 黃水成 ( 註 1) S.C. Huang 吳民佑 ( 註 2) M.Y.Wu 薪資 Salary 獎金 Bonus 前二項總額 Total 總額占稅後純益之比例 (%) Percentage of Net Earning 其他報酬 Ors 396,848 707,215 1,104,063 33,698 1,809,522 876,716 2,686,238 85,706 Taiwan Post Annual Report 33
貳 IV.Corporate Governance Report 副總經理 Vice Preident 副總經理 Vice Preident 副總經理 Vice Preident 副總經理 Vice Preident 副總經理 Vice Preident 陳吉雄 ( 註 3) C.H. Chen 蘇天富 T. F. Su 胡雪雲 H.Y. Hu 黃書健 S.C. Huang 閻永安 Y.A. Yen 837,959 873,584 1,711,543 61,084 1,561,572 610,653 2,172,225 42,244 1,553,172 610,653 2,163,825 33,458 1,554,780 610,653 2,165,433 34,400 1,510,536 579,796 2,090,332 32,451 195.3.16 295.5.11 395.7.16 4 () 100% Note 1: President S.C. Huang finished his term in office on March 16, 2006. Note 2: M.Y. Wu took over office on May 11, 2006. Note 3: C. H. Chen finished his term in office on July 16, 2006. Note 4: As a 100% government-owned enterprise, re is no distribution of earnings, employee bonuses, and stock options. 三 公司治理運作情形 ( 一 ) 董事會運作情形 9510 III. Governance and Operations (I) Meetings Attendance of Meetings (10 total) for 2006 Title ( 1) Name () Attendance in Person Attendance by Proxy (%) /(2) Actual Attendance Rate Notes Chairperson J. S. Hsu S.C. Huang C. H. Chen 4 0 100 1. 95.03.16 2. 95.05.26 95.08.06 1. Relinquished his chairperson duties on March 16, 2006 2. Became a board director on May 26, 2006; resigned on August 6, 2006 2 0 100 95.03.16 Retired from post on March 16, 2006 6 0 100 95.07.16 Retired from post on July 16, 2006 34 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Chairperson S.S. Wu J.S. Liu M.H. Lan C. C. Lai M.Y. Wu 4 0 100 95.05.10 Finished his term of office on May 10, 2006 3 0 100 95.05.10 Finished his term of office on May 10, 2006 3 0 100 95.05.10 Finished his term of office on May 10, 2006 7 0 100 95.05.112 Became second chairperson on May 11, 2006 7 0 100 95.05.11 Took office on May 11, 2006 T. F. Su 3 0 100 95.08.25 Took office on August 25, 2006 K. H. Ding 8 2 80 W.H. Chen 3 0 100 95.08.25 Took office on August 25, 2006 K.L. Chang 10 0 100 P.Y. Chang 10 0 100 S.C. Huang 10 0 100 C.H. Fu 9 1 90 Taiwan Post Annual Report 35
貳 IV.Corporate Governance Report M.H. Hsieh 6 4 60 D.H. Hsiao 9 1 90 Y.C. Shen 10 0 100 K.M. Cheng 10 0 100 H.C. Lu 7 0 100 95.05.11 Took office on May 11, 2006 Supervisor S.F. Lin 10 0 100 Supervisor C.T. Huang 10 0 100 Supervisor M.H. Yang 1 2 2 leaves 33.3 95.05.10 Finished his term of office on May 10, 2006 Supervisor C.H. Lu 4 2 2 leaves 66.6 95.06.23 Took office on June 23, 2006 1 143 2 3 Ors: 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 minutes, detailing its date, term, issue, all opinions of independent director(s) and how company handles it. II. In event that a director has to avoid voting on a resolution because of a conflict of interest, name of director, content of resolution, reasons and result of vote should be noted. III. Goals (such as setting up an audit committee and raising information transparency) of board for year and closest fiscal year as well as evaluation of its work. 36 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 1 2 ()(%) Note 1: When a board director or a supervisor works for a legal person, legal person's name (company name) and name of its responsible person should be disclosed. Note 2. By end of a year, dates of any board directors or supervisors' resignations and ir 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 : Item I. Equity Structure and Shareholder Rights (1) How company handles shareholder suggestions and disputes (2) Company's control of list of its major shareholders and final decision-makers (3) How 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 Status of Operation 369-1 (1) 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 369-1 of Company Act. (1) None designated at present. (2) Company auditors are hired in accordance with Government Procurement Law. The contract is reviewed on a yearly basis. (II) Governance and operation of company as well as its divergence from Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and reasons. Divergence from Corporate Governance Best-Practice Principles for Banks and reasons The company, in accordance with "Enforcement Regulations For Bank Internal Audit Control System" by Ministry of Finance, has established an internal control system, a chief auditor system and an audit department under board of directors to conduct unprejudiced auditing in order to firmly implement internal control system. 2 142 3 The company is 100% owned by government, and all directors are appointed by MOTC. The second board of directors of company consisted of 14 directors. Two of board directors had special expertise, providing professional opinions and enhancing professionalism and independence of board. Three board members represented employees, bringing input from below, serving function of communication, coordination and monitoring. Taiwan Post Annual Report 37
貳 IV.Corporate Governance Report III. Organization and Responsibilities of Panel of Supervisors (1) Establishment of independent supervisors (2) Communications between company employees and supervisors IV. Communications channels with related parties V. Disclosure of information (1) Through company website (2) Ors 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 company's audit committee, etc (1) None designated at present. (2) Corporate supervisors are invited to attend all board meetings; corporate supervisors may, at any time, investigate company's business and financial situation, and audit company's accounts and paperwork. E-Mail Customers may write to company through email 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 Taiwan Post Press Releases. None at present time 2 3 The company is 100% owned by government, and all supervisors are assigned by MOTC. The second board of company had three supervisors, who monitored financial situation and execution of company's business in accordance with law and company's articles of incorporation. In accordance with Regulations Governing Internal Controls and Audit System for Postal Remittances and Savings, proclaimed by MOTC and MOF, company has established an internal control system, an audit system and a department of auditing under board. 38 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 VII. Please detail company's governance and operation, as well as differences and reasons for deviations from Corporate Governance Best-Practice Principles for Banks: (see above) VIII. Or important materials that may assist ors to understand company's governance and operations (such as furr education and board meeting attendance of company's directors and supervisors, risk-management policies and evaluation, customer protection, avoidance of conflicts of interest on part of board directors, companypurchased insurance for its directors and supervisors, as well as company's social responsibilities). 1.95 Course Offered by National Association of Corporate Directors(NACD) Course Date 95.08.01. 2006. 08.01 1. Status for Furr Study for Directors and Supervisors in 2006 Seminar on Case against Directors or Supervisiors Attended by Directors or Supervisors J. S. Hsu P.Y. Chang M.H. Hsieh H.C. Lu K.M. Cheng 2.95 Title Name Obligatory Attendance of Meeting 2. Attendance of Meetings During 2006: Attendance of Meeting Remarks Chairperson Chairperson J.S. Hsu S.C. Huang C. H. Chen S.S. Wu J.S. Liu M.H. Lan C. C. Lai M.Y. Wu T. F. Su K. H. Ding W.H. Chen K.L. Chang 4 4 2 2 6 6 4 4 3 3 3 3 7 7 7 7 3 3 10 8 3 3 10 10 Taiwan Post Annual Report 39
貳 IV.Corporate Governance Report Supervisor Supervisor Supervisor Supervisor P.Y. Chang S.C. Huang C.H. Fu M.H. Hsieh D.H. Hsiao Y.C. Shen K.M. Cheng H.C. Lu S.F. Lin C.T. Huang M.H. Yang C.H. Lu 10 10 10 10 10 9 10 6 10 9 10 10 10 10 7 7 10 10 10 10 3 1 6 4 3. 4. 5. 6. 7. 77 3. In accordance with company's articles of incorporation, a member of company's board directors should not vote in any resolution where re is a conflict of interest or duties. 4. Regarding consumer protection and customer policy: Contracts between company and its clients have all been revised in accordance with regulations of Consumer Protection Law in an effort to avoid disputes resulting from advertisements and standard contracts. 5. Regarding risk management: in accordance with regulations set by its competent authorities, company has assessed its operational risk and urged all operational departments to take necessary measures. To ensure effectiveness of its promotion of its risk management policies, all operational departments are required to submit a quarterly report on execution of its risk management work, which will be submitted to company's risk management committee periodically. 6. All senior management and departments of company operate in accordance with company's division of work chart. 7. The company puts great importance on its corporate social responsibility: apart from offering loans in accordance with government policies (see page 77), company has actively participated in fundraisers and activities for public good, as well as encouraged its branches to take initiatives to partake in regional activities for public good and implement environmental protection measures. 40 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 ( 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 1. 2. 95 95 14()235 1,3151,357 1,705 2,622 (III) Disclosure of Corporate Governance Best-Practice Principles and how to locate relevant regulations: Make disclosures on company's website in accordance with Corporate Governance Best-Practice Principles for Banks (see company's website). (IV) Disclosure of important information about governance and operations of company: Disclosed in company's website (see company's website). (V) Implementation of internal control system 1. Establishment and implementation of internal control system Internal control system aims to provide reasonable assurance regarding achievement of objectives of 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 achievement of three above-mentioned objectives. In addition, as environment and situations of a company changes, effectiveness of its internal control system will change with it. However, company's internal control system is equipped with a self-monitoring mechanism, and as soon as a problem is identified, 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 board of directors and company's management team in inspecting and evaluating performance of its internal control system and make timely suggestions to ensure its continual effectiveness. In 2006, in accordance with Regulations Governing Internal Controls and Audit System for Postal Remittances and Savings, Regulations Governing Internal Controls and Audit System for Insurance, Regulations Governing Internal Audit System of Chunghwa Post and 2006 Audit Plan, company's audit department performed 1,357 general audits on 14 departments, 23 larger branches, 5 mail processing centers and 1,315 smaller branches as well as 2,622 cash audits on operational units of company. In addition, department has, in accordance with regulations, submitted reports to board of directors and continued to conduct follow-up evaluations on suggestions and flaws found by Financial Supervisory Commission, Central Bank of ROC and or external audit units such as company's CPA. Taiwan Post Annual Report 41
貳 IV.Corporate Governance Report 42 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Internal Control Statement Savings and Remittances The results of internal examination of our company's internal control system regarding business of Postal Savings and Remittances for period from January 1, 2006 to December 31, 2006 are hereby declared as follows: 1. The company understands that establishing, implementing, and maintaining an internal control system is responsibility of 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 achievement of objectives of 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 Business Accounting Act, Postal Remittances and Savings Act and or 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 achievement of three above-mentioned objectives. In addition, as environment and circumstances of company change, effectiveness of its internal control system will change with it. However, company's internal control system is equipped with a selfmonitoring mechanism, and as soon as a problem is identified, company will take action to correct it immediately. 3. The company evaluates design and effectiveness of its internal control system based on Regulations Governing Internal Controls and Audit System for Postal Remittances and Savings (promulgated by MOTC and MOF) and Processing Guidelines for 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 five above-mentioned components so as to evaluate design and effectiveness of its internal control system. 5. Based on results of its evaluation as mentioned above, company believes that design and execution of its internal control system during aforementioned period was effective and was able to provide reasonable assurance regarding achievement of objectives of company's operations, financial reporting, and compliance with applicable laws and regulations. The company also believes that financial data and statements of company were compiled in accordance with Business Accounting Act, Postal Remittances and Savings Act and or applicable laws and regulations. 6. This statement was approved by company's board of directors during its board meeting on April 20, 2007. The attending directors (out of 15 directors attended, two attended by proxy) unanimously approved this statement. Taiwan Post Co., Ltd. Chairperson: Ho Nuan-hsuan President: Wu Min-yu Auditor General: Yeh Shun-min Chief Compliance Officer: Chou Wu-hsiung Date: April 20, 2007 Taiwan Post Annual Report 43
貳 IV.Corporate Governance Report 44 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Internal Control Statement Simple Life Insurance The results of internal examination of our company's internal control system regarding business of Simple Life Insurance for period from January 1, 2006 to December 31, 2006 is hereby declared as follows: 1. The company understands that establishing, implementing, and maintaining an internal control system are responsibilities of 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 achievement of objectives of company's operations, financial reporting, and compliance with applicable laws and regulations. The objective of company's operation is effectiveness and efficiency, including performance and profitability goals and safeguarding of resources; goal of financial reporting is to provide reliable published financial statements; compliance refers to complying with those laws and regulations to which company is subject. The financial data and statements are compiled in accordance with Insurance Act, Simple Life Insurance Act, and or 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 achievement of three above-mentioned objectives. In addition, as environment and circumstances of company change, effectiveness of its internal control system will change with it. However, company's internal control system is equipped with a self-monitoring mechanism, and as soon as a problem is identified, company shall take action to correct it immediately. 3. The company evaluates design and effectiveness of its internal control system based on Regulations Governing Internal Controls and Audit System of an Insurance Company (promulgated by Financial Supervisory Commission) and Regulations Governing Internal Controls for Listed Companies (promulgated by 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 se components, please see Regulations Governing Internal Controls for Listed Companies. 4. The company has adopted five components as mentioned above to evaluate design and effectiveness of internal control system for its simple life insurance business. 5. Based on results of its evaluation as mentioned above, company believes that design and execution of internal control system for its simple life insurance business during aforementioned period was effective and was able to provide reasonable assurance regarding achievement of objectives of company's operations, financial reporting, and compliance with applicable laws and regulations. The company also believes that financial data and statements of company were compiled in accordance with Insurance Act, Simple Life Insurance Act and or applicable laws and regulations. 6. This statement is a major part of company's annual report and will be made public. Under Articles 20, 32, 171 and 174 of Securities Transaction Act, as well as Insurance Act and Simple Life Insurance Act, any fraudulent statements or intentional failure to make necessary disclosure will incur legal responsibility. 7. This statement was approved by company's board of directors during its board meeting on April 20, 2007. Taiwan Post Co., Ltd. Chairperson: Ho Nuan-hsuan President: Wu Min-yu Auditor General: Yeh Shun-min Chief Compliance Officer: Chou Wu-hsiung Date: April 20, 2007 Taiwan Post Annual Report 45
貳 IV.Corporate Governance Report 46 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 Internal Control Statement April 20, 2007 The following statement gives results of a self-auditing of internal control system of bond-operating department of Taiwan Post Co., Ltd., covering period of Jan. 1, 2006 to Dec.31, 2006: 1. The company understands that establishing, implementing, and maintaining an internal control system is responsibility of company's board of directors and management team. The bond-operating department of company has established such a system. The internal control system aims to provide reasonable assurance regarding achievement of objectives of company's effective and efficient operations (including performance and profitability goals and safeguarding of resources), reliable financial reporting, and compliance with 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 achievement of three above-mentioned objectives. In addition, as environment and circumstances of company change, effectiveness of its internal control system will change with it. However, bond-operating department' s internal control system is equipped with a self-monitoring mechanism, and as soon as a problem is identified, company will take action to correct it immediately. 3. The bond-operating department of company evaluates design and effectiveness of its internal control system based on Processing Guidelines for Establishment of an Internal Control System by Securities and Futures Market Business Sectors (Processing Guidelines). 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 se components, please see Processing Guidelines. 4. The bond-operating department of company has adopted five components as mentioned above to evaluate design and effectiveness of its internal control system. 5. Based on results of its evaluation as mentioned above, company believes that design and execution of internal control system for its bond-operating department during aforementioned period was effective and was able to provide reasonable assurance regarding achievement of objectives of company's operations, financial reporting, and compliance with applicable laws and regulations. 6. This statement is a major part of company's annual report and will be made public. Under Articles 20, 32, 171 and 174 of Securities Transaction Act, any fraudulent statements or intentional failure to make necessary disclosures will incur legal responsibility. 7. This statement was approved by company's board of directors during its board meeting on April 20, 2007. The attending directors (out of 15 directors attending, two attended by proxy) unanimously approved this statement. Taiwan Post Co., Ltd. Chairperson: Ho Nuan-hsuan President: Wu Min-yu Taiwan Post Annual Report 47
貳 IV.Corporate Governance Report ( 六 ) 違法受處罰及主要缺失與改善情形. 1 2 690 2. 78100 20 3. 22,311,920 6 951121 4. 5000 5. ( 七 ) 董事會之重要決議 1.119 1 96 (Ⅵ) Law Violations Resulting in Punishment, Misconduct, and Improvement 1. Legal violation(s) by a senior manager or a lowergrade employee resulting in indictments: (1) A clerk from Taipei Guangfu opened up a closed bid and leaked information he discovered. (2) A manager from Kaohsiung Guyan embezzled NT$6.9 million. 2. Law violation(s) that led to fines by compotent authority: Seven branch offices of company failed to file eight currency transaction reports involving NT$1 million or more and violated Money Laundering Control Act. Taiwan Post was fined NT$200,000 by Financial Supervisory Commission, Executive Yuan. 3. Misconduct(s) resulting in serious disciplinary action by competent authority: An overseas female compatriot was swindled a large sum of money, among which a total of NT$22,311,920 was transferred from or banks into 6 postal passbook accounts of branch offices under jurisdiction of Kaohsiung, Fengshan and Penghu Post Offices. The Financial Supervisory Committee, Executive Yuan, on November 21, 2006, made a special investigation and took disciplinary action to this company's operation on screening of opening an account, account management and business transaction. 4. Nature and amount of loss as a result of frauds, major random incidents (fraud, ft, appropriation and ft of assets, falsified transactions, document and security forgery, receiving kickbacks, natural disaster loss, loss caused by external forces, hacker attacks, ft of information, and leaking business secrets and client information, etc.) or failure to comply with Instructions for Maintenance of Safety by Financial Institutions that lead to security accidents, and individual or accumulated losses for year that amounted to NT$ 50 million or more: None 5. Or items to be disclosed under instructions of Financial Supervisory Commission: None Improvement: Apart from strengning internal controls and audits, company requires its management team to pay more attention to lives and working situation of employees to prevent fraud. (Ⅶ) Major board resolutions Major resolutions of board of directors during most recent fiscal year up to printing of annual report: 1. The 19th meeting of first board: (1) The board unanimously passed administration policy, business policy, operational goals, fixed assets purchase, and construction projects for 2007. 48 Taiwan Post Annual Report
IV.Corporate Governance Report 貳 296 3 95 2.14 3.120 1 94 2 94 3 94 94 4.21 1 2 5.25 196 2 96 96 6.26 1 2 3 97 497 (2) The board unanimously passed 2007 budget. (3) The board unanimously passed 2006 compliance program for company's simple life insurance operation. 2. The 4th temporary board meeting of first board: The board unanimously elected Chen Chi-hsiung as acting chairperson and president. 3. The 20th meeting of first board: (1) The board unanimously passed 2005 audited and certified financial report, life insurance department financial report and catalog of assets. (2) The board unanimously passed 2005 surplus allocation plan. (3) The board unanimously passed 2005 Internal Control Evaluation Table and also agreed to provide internal control statements for its savings and remittances department, simple life insurance department and bond-operating department for 2005. 4. The 1st meeting of second board: (1) The board unanimously elected Lai Ching-chyi as chairperson. (2) The board unanimously elected Wu Min-yu as president. 5. The 5th meeting of second board: (1) The board unanimously passed its 2007 audit plan. (2) The board unanimously passed 2007 postal capital deployment plan. Major board resolutions in FY 2007: 6. The 6th meeting of second board: (1) The board unanimously passed revised Article 1 of Articles of Incorporation of Chunghwa Post. (2) The board unanimously passed revised Article 1 of of Directors' Structure of Chunghwa Post. (3) The board unanimously passed vision of company, its strategies and goals, as well as its administration policy, business policy, operational goals, fixed assets purchase, and construction projects for 2008. (4) The board unanimously passed 2008 budget. Taiwan Post Annual Report 49