Corporate Governance > Corporate Governance Structure

 Board Diversity Policy

1.Objective

This Policy aims to set out the approach to achieve diversity on the board of directors (the “Board”) of Kerry Logistics Network Limited (the “Company”).

2.Scope

This policy applies to the board of directors and not apply to the diversification of employees of the Company and its affiliates.

3.Policy

To achieve the sustainable and balanced development of the Company, all appointments of the board of directors are based on the principle of talent. The overall composition of the board of directors shall be taken into consideration in the selection of this Corporation’s directors. The composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the company’s business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards:
(1)Basic requirements and values: Gender, age, nationality, and culture.
(2)Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience.
Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:
A、The ability to make judgments about operations.
B、Accounting and financial analysis ability.
C、Business management ability.
D、Risk assessment ability.
E、Crisis management ability.
F、Knowledge of the industry.
G、An international market perspective.
H、Leadership ability.
I、Decision-making ability.

4.Performance

Name of Directors Gender Operation and management Leadership Financial accounting Industrial experience
Belinda Yu F v v v v
Hongli Lin M v v v
Edward Liu M v v v v
Bruce Chen M v v v v
Dennis Ni M v v v

5.Disclosure of this Policy

This policy will be published on our website.

 Board and Committee Members


Title Name Education & Experience Position at TPPC & other companies
Chairman Belinda Yu CEO of Taiwan Pulp & Paper Corporation
Special Assistant of Chairman of Taiwan Pulp & Pulp & Paper Corporation
Representative Taichia Enterprise Co., Ltd.
Bachelor of Dept. of Business Administration, NCHU
Chairman and CEO of Taiwan Pulp & Paper Corporation

As Chairman:
Gia Phu Packaging Co. , Ltd.
Minh Phu Co., Ltd.
Ji Phu Paper Company Ltd.
Liwen Paper Industry Co. Ltd.

As Directors:
Hoa Viet Joint Venture Corporation Ltd.
Best Shine International Development Ltd.
TP&P International Development Ltd.
Best Shine International Development (Cayman I~VIII) Ltd.
Frank International Investment Corporation
PH&L Internation LTD.
PEI WEN HOLDING CO., LTD等
Hongli Lin Assistant to the president of C channel Co., Ltd
Assistant to the chief of Mitsui products Co., Ltd
Bachelor of science, Keio University, Japan
Independent Directors Edward Liu Senior Vice President of Viva Shopnet Homeshopping co., Ltd.
Manager of King’s Town Bank
Bachelor of Science and Technology Dept. of Money and Banking, NKFUST
Board and Senior Vice President of Viva Shopnet Homeshopping co., Ltd.
Hon Jian Investment co., Ltd.
Independent Directors Bruce Chen Executive Vice President of Arima Communications.
Manager of Taiwan Branch of HB International Logistics
President of SAMPO TECHNOLOGY CORP. (Philippines)
AVP of SAMPO TECHNOLOGY CORP.
Production Manager of SAMPO TECHNOLOGY CORP.( Atlanta plant of US)
Master of Business Administration of Georgia State University
Bachelor of Industrial Engineering of Tunghai University
Independent Directors Dennis Ni GE Healthcare, Marketing Manager, SEA and Country Sales Manager for Singapore, Malaysia and Brunei
Wyeth Singapore Pte Ltd., Product Manager, Singapore and Malaysia
Graduate Diploma of Singapore Institute of Management
Packaging for Healthcare, Regional Sales Manager, Asia

 Audit Committee, Remuneration Committee and other functional committees


For the purpose of developing supervisory functions and strengthening management mechanisms, the board of directors of the Company, in consideration of the company’s scale and type of operations and the number of its board members, may set up functional committees for auditing, remuneration, nomination, risk management or any other functions, and based on concepts of corporate social responsibility and sustainable operation, may set up environmental protection, corporate social responsibility, or other committees, and expressly provide for them in the articles of incorporation.

Functional committees shall be responsible to the board of directors and submit their proposals to the board of directors for approval, provided that the performance of supervisor’s duties by the audit committee pursuant to Article 14-4, paragraph 4 of the Securities and Exchange Act shall be excluded.

A functional committee shall establish its regulations of organization, subject to approval by resolution at the board of directors meeting. The regulations of organization shall provide for matters including the number of the committee members, term of office, powers and authorities, rules of procedure, and resources provided by the company to facilitate its exercise of powers.

 Audit Committee


The audit committee has been set up in 2017/6/28 which is composed of all independent directors.
The audit committee of the company is composed of three independent directors. The purpose of the audit committee is to assist the board of directors to fulfill its supervision on the quality and integrity of the company's accounting, audit, financial reporting process and financial control.
The audit committee held 7 meetings in 2019. The matters under consideration were mainly those listed in Article 5 of the fourteenth article of the securities and exchange law.

The main function of the Audit Committee is to supervise the following matters:
1.Fair presentation of the financial reports of this Corporation.
2.The hiring (and dismissal), independence, and performance of certificated public accountants of this Corporation.
3.The effective implementation of the internal control system of this Corporation.
4.Compliance with relevant laws and regulations by this Corporation.
5.Management of the existing or potential risks of this Corporation.
The powers of the Committee are as follows:
1.The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
2.Assessment of the effectiveness of the internal control system.
3.The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees for others.
4.Matters in which a director is an interested party.
5.Asset transactions or derivatives trading of a material nature.
6.Loans of funds, endorsements, or provision of guarantees of a material nature.
7.The offering, issuance, or private placement of equity-type securities.
8.The hiring or dismissal of a certified public accountant, or their compensation.
9.The appointment or discharge of a financial, accounting, or internal audit officer.
10.Annual and semi-annual financial reports.
11.Other material matters as may be required by this Corporation or by the competent authority.

Review financial report

1.Annual financial report
The board of directors has prepared the company's 2018 annual business report, financial statements and earnings distribution proposal, among which the financial statements have been audited by PwC Taiwan accounting firm and the audit report has been issued. The above-mentioned business report, financial statements and earnings distribution proposal have been examined by the audit committee and found no inconsistency.

2.Interim quarterly financial statements
The financial statements of the first quarter, the second quarter and the third quarter of 2019 have been checked and completed by PwC Taiwan accounting firm, and the audit report has been issued. After the audit by the audit committee, it is found that there is no inconsistency.
Evaluation of internal control system: the audit director of the company reports the situation of internal control audit to the Audit Committee; the audit committee has communicated with the certified public accountant to check whether there is any significant lack of internal control of the company, and the internal control system of the company has no significant lack after evaluation.

Independence of Accountants

In order to ensure the independence of certified public accountants, the audit committee, referring to Article 47 of the accounting law and the content of "integrity, impartiality, objectivity and independence" in the CPA code of ethics Bulletin No. 10, formulates an independence assessment form to assess the independence, professionalism and suitability of certified public accountants and whether they are related persons, business or financial interests with the company Relationships, etc. On December 25, 2019, the Audit Committee approved that both Liu Zimeng and Wu Jianzhi, certified public accountants of PwC Taiwan accounting firm, met the independence assessment standards and were qualified to serve as financial and tax Certified Accountants of the company.

Operation of audit committee in 2019

Date of meeting Content Audit committee opinions and the company's handling of audit committee opinions
January 23, 2019
(the 13th of the 1st session)
1. Revise the company's O13 "procedures for the acquisition or disposal of assets". Approved by all members of the audit committee
February 20, 2019
(the 14th of the 1st session)
1. The company's statement on internal control system self-assessment in 2018.
2. To establish the company's "standard operating procedures for handling directors' requirements".
March 13, 2019
(the 15th of the 1st session)
1. Amendment of the articles of association of the company.
2. The company's 2018 business report and financial statement.
3. The company's profit distribution in 2018.
May 8, 2019
(the 16th of the 1st session)
1. The consolidated financial statements of the company in the first quarter of 2019.
August 8, 2019
(the 17th of the 1st session)
1. The company's consolidated financial statements in the second quarter of 2019.
2. To formulate the "key points for management of related party transactions" of the company.
3. Revise the company's M01 "code of good faith operation".
4. Amend the "rules of procedure of the board of directors" of the company.
November 7, 2019
(the 18th of the 1st session)
1. The company's consolidated financial statements in the third quarter of 2019.
2. Audit remuneration of the company's certified public accountant.
3. The company's internal audit plan for 2020.
4. Personnel change of the company.
December 25, 2019
(the 19th of the 1st session)
1. The company's assessment of the independence and competence of certified public accountants.

 Remuneration Committee


The Remuneration Committee has been set up in 2011/11/25 and it is composed of all independent directors since 2017/6/28.The Committee shall exercise the care of a good administrator to faithfully perform the following duties and present its recommendations to the board of directors for discussion:
1.Establishing and periodically reviewing the annual and long-term performance goals for the directors, supervisors, and managerial officers of this Corporation and the policies, systems, standards, and structure for their compensation.
2.Periodically assessing the compensation to which performance goals for the directors, supervisors, and managerial officers of this Corporation.
The Committee shall perform the duties under the preceding paragraph in accordance with the following principles:
1.Performance assessments and compensation levels of directors, supervisors, and managerial officers shall take into account the general pay levels in the industry, their performance in other positions, and the compensation paid to employees holding equivalent positions in recent years. Also to be evaluated are the reasonableness of the correlation between the individual’s performance and this Corporation’s operational performance and future risk.
2.There shall be no incentive for the directors or managerial officers to pursue compensation by engaging in activities that exceed the tolerable risk level of this Corporation.
3、For directors and senior managerial officers, the percentage of bonus to be distributed based on their short-term performance and the time for payment of any variable compensation shall be decided with regard to the characteristics of the industry and the nature of this Corporation’s business.

 Charter of Nominating Committee


In order to strengthen the corporate governance function and connect with the international standards, the company's board of Directors established a new nomination committee, which was formally set up by the 14th board of directors of the 23rd session on February 20, 2019 and was composed of all independent directors.
With authorization from the board of directors (below, "the board"), the Committee shall exercise the due care of a good administrator to faithfully perform the following duties and shall submit its proposals to the board for discussion:
1.Laying down the standards of independence and a diversified background covering the expertise, skills, experience, gender, etc. of members of the board, supervisors and senior executives, and finding, reviewing, and nominating candidates for directors, supervisors, and senior executives based on such standards.
2.Establishing and developing the organizational structure of the board and each committee, and evaluating the performance of the board, each committee, and each director and senior executive and the independence of the independent directors.
3.Establishing and reviewing on a regular basis programs for director continuing education and the succession plans of directors and senior executives.
4.Establishing corporate governance guidelines of the Company.

 Communications between independent directors and internal/independent auditors

1.The communication channels between the independent directors, internal auditors, and independent auditors.

(1)The Company's Audit Division sends the audit reports and follow-up reports on deficiencies to independent directors monthly. Besides these measures, the Internal Audit head presents the findings of all audit reports and communicates follow-up reports with independent directors during the Board of Directors’ meeting annually.
(2)The Company's independent auditors present the findings of their review or audit reports annually regarding the financial results and internal control of the Company and its subsidiaries. The independent auditors are also required to communicate to the Audit Committee the impact of IFRSs updates and announcements, any issues under applicable laws and regulations that might affect the financial reports, as well as whether to adjust the entries.

2.The major items of communication between the independent directors and the head of internal audit

The communication mechanism between the independent directors and the head of internal audit works well and effectively.
The major items of these communications in 2019 are as follows:
DATE Communication Focus Recommendation and Correction or Implementation of Processing Results
2019/01/23
13th of 1st session Audit Committee
The audit committee shall attend as nonvoting delegates and take questions. No suggestion from independent directors
2019/02/20
14th of 1st session Audit Committee
Statement of internal control system issued by the Audit Committee for self-assessment of the company's internal control system in 2018 Submit to the board of directors after deliberation and approval
2019/03/13
15th of 1st session Audit Committee
Internal audit business report No suggestion from independent directors
2019/05/08
16th of 1st session Audit Committee
The audit committee shall attend as nonvoting delegates and take questions. No suggestion from independent directors
2019/08/08
17th of 1st session Audit Committee
The audit committee shall attend the video conference and accept questions. No suggestion from independent directors
2019/11/07
18th of 1st session Audit Committee
1. The company's internal audit plan for 2020
2. Internal audit business report
Submit to the board of directors after deliberation and approval
2019/12/25
19th of 1st session Audit Committee
Internal audit business report No suggestion from independent directors

3.Summary of communication between independent directors and visa Accountants

The independent directors of the company communicate well with the visa accountants.
The major items of these communications in 2018 and 2019 are as follows:
DATE Communication Focus Recommendation and Correction or Implementation of Processing Results
2018/03/13
Audit Committee
1.Report on the results of individual and consolidated financial reports in 2017: types of opinions, key checks and other matters, and update communication on whether there are financial reports adjusting entries or decrees
2.Any significant absence of internal control in communication checking: there is no significant absence of internal control in our company.
None of the independent directors had any suggestions.
2019/03/13
Audit Committee
1.Report on the results of individual and consolidated financial reports in 2018: types of opinions, key checks and other matters, and update communication on whether there are financial reports adjusting entries or decrees
2. Any significant absence of internal control in communication checking: there is no significant absence of internal control in our company.
None of the independent directors had any suggestions.
2019/08/08
Audit Committee
1. Report on the audit results of the consolidated financial report in the second quarter of 2019: types of opinions, key audit and other matters, and update communication on whether there are any financial report adjustment entries or laws and regulations
2. Communicate and check whether the internal control of the company has significant deficiencies: the company has no significant deficiencies
None of the independent directors had any suggestions.

 Results of latest internal board performance evaluation


In order to improve the efficiency and effectiveness of the operation of the board of directors of the company, the Secretary Office of the board of directors shall assist in collecting information related to the activities of the board of directors at the end of each year in accordance with the "performance evaluation method of the board of directors and functional Committee" of the company, so as to implement the performance self-evaluation of the internal board of directors and functional Committee, and submit the evaluation results and improvement plans to the board of directors for review.

This evaluation includes the "board performance appraisal self-assessment questionnaire", "board member appraisal self-assessment questionnaire" and "functional Committee performance appraisal self-assessment questionnaire", which were approved by the board of directors. The results of this questionnaire are analyzed as follows:

A、Self assessment statistics:

Board performance appraisal self-assessment
Item No.of Questions Ratio Ave. score
A.Participation in the operation of the company 12 25% 1.25
B.Improve the decision-making quality of the board of directors 12 25% 1.25
C.Composition and structure of the board of directors 7 10% 0.49
D.Selection and continuing education of directors 7 15% 0.75
E.Internal control 7 25% 1.25
Result 4.99
Excellent
Board member appraisal self-assessment
Item No.of Questions Ratio Ave. score
A.Mastering the company's objectives and tasks 3 20% 1.00
B.Responsibilities of directors 3 10% 0.50
C.Participation in the operation of the company 8 20% 1.00
D.Internal relationship management and communication 3 20% 1.00
E.Professional and continuing education of directors 3 10% 0.50
F.Internal control 3 20% 1.00
Result 5.00
Extremely excellent
Functional Committee performance appraisal self-assessment
Item No.of Questions Ratio Ave. score
A.Participation in the operation of the company (I) 4 20% 1.00
B.Functional Committee responsibility recognition 7 10% 0.50
C、Improve the decision quality of functional Committee 1 15% 0.75
A.Participation in the operation of the company (II) 6 20% 1.00
D.Composition and member selection of functional Committee 3 15% 0.75
E.Internal control 3 20% 1.00
Result 5.00
Extremely excellent
Note: the evaluation results are divided into five levels: extremely excellent, excellent, medium, poor and extremely poor

 The Establishment of Corporate Governance Specialists and the Status of Business Implementation


The board of directors of the company appoints Art Kuo, a special assistant to the chairman's office, as a corporate governance officer to proceed the rights and interests of shareholders and strengthen the functions of the board of directors. Art Kuo has already possessed the financial, stock and deliberation management of the public issuing company, and has worked as a supervisor for more than three years. The main responsibilities of corporate governance are to provide the information needed by directors and supervisors to carry out their business, to assist directors and supervisors to abide by laws and regulations, and to handle the relevant matters of the board of directors and shareholders'meetings in accordance with the law.

The performance of business in 2018 years is as follows:
1.Assist independent directors and general directors in the performance of their duties, provide necessary information and arrange for further study of directors:
(1)Members of the board of directors are regularly notified of the latest revisions and developments in the company's business and corporate governance-related laws and regulations.
(2)To review the relevant information classifications and provide company information required by directors to maintain smooth communication between directors and business executives.
(3)The Code of Practice for Corporate Governance of Independent Directors shall arrange meetings with internal auditors or visa accountants when they meet individually to understand the needs of the company's financial operations.
D. Assist independent directors and general directors in drawing up annual refresher plans and arranging courses according to the company's industrial characteristics, directors' experience background.
2.To assist the board of directors and shareholders in meeting procedures and resolution compliance:
(1)Report to the board of directors, independent directors and the Audit Committee on the company's corporate governance operation, and confirm whether the holding of the shareholders'meeting and the board of directors conforms to the relevant laws and corporate governance codes.
(2)Assist and remind directors of the rules and regulations to be followed in the execution of business or in making a formal resolution of the board of directors, and make suggestions when the board of directors will make an illegal resolution.
(3)After the meeting, it is responsible for reviewing the issue in important board resolutions, ensuring the validity and correctness of the re-messaging content, in order to safeguard investors’s trading information.
3.Maintaining investor relationship: arrange communication between directors and major shareholders, institutional investors or general shareholders as necessary, so that investors can obtain sufficient information to evaluate and determine the reasonable capital market value of enterprises, and make the rights and interests of shareholders well maintained.
4.To draw up the agenda of the board of directors, notify the directors 14 days before the meeting, call a meeting and provide meeting information, remind the directors before the meeting if interest avoidance is required, and complete the proceedings of the board of directors within 20 days after the meeting.
5.To submit the date of the shareholders'meeting in advance according to law, to make the notice of meeting, the handbook and the proceedings within the legal time limit, and to amend the articles of association or to re-elect directors to handle the registration affairs.