Corporate governance has emerged as a global trend and is essential to gauge a company’s true value. CDF strongly believes that achieving sustainability as well as winning the trust of investors stems from the implement of sound corporate governance. CDF’s internal rules, established in accordance with the “Corporate Governance Best-Practice Principles for Financial Holding Companies” approved by the competent authority, clearly defines the organization structure and the functions of each department. CDF has also set up an independent audit department and explicitly outlined that managers of this department shall not have duties irrelevant to internal audit to avoid any conflicts of interest.We protect shareholder rights and ensure our shareholders have the right of "one share, one vote" in accordance with the law. Shareholders may exercise their rights to vote and participate in the decision making in the Annual General Meeting (AGM).
The Company follows business policies that have focus on “active participation of public affairs, balance between economic, social, environmental development, and business sustainability through corporate social responsibilities.” The CSR Committee under the Board was therefore constituted with six working groups (WGs): Corporate Governance WG, Social Philanthropy WG, Environmental WG, Client Relations WG, Responsible Finance WG, and Employee Well-Being WG, each headed by a top executive of the Group.
To be in line with global trends in "sustainable finance," the Board of Directors resolved on August 24, 2020, to set up the "Responsible Finance" task force under the CSR Committee to build a responsible finance governance structure. In accordance with the United Nations' Principles for Responsible Investment (PRI), Principles for Sustainable Insurance (PSI), and Principles for Responsible Banking (PRB), the task force incorporates the impacts of the economy, the environment and society on investment and financing indicators and business activities. In addition to strengthening resilience in the face of potential climate risks, the task force is promoting green finance step by step. It keeps abreast of business developments associated with low-carbon transformation and channels funds to green or sustainable industry players to implement the sustainable finance strategy.
These six groups are responsible for planning and executing the Company‘s ESG plan. When formulating ESG-related projects, these groups will gather feedback from internal and external stakeholders through the “Stakeholder Survey Form” to identify major ESG-related issues and serve as the basis for the annual implementation plan. Institutional stakeholders may also provide input and engage in ESG topics at board meetings or CSR Committee meetings through their board representatives. The CSR Committee periodically reports to the Board of Directors on the implementation status of each WG. To provide guidelines to the CSR Committee on operations, the CDF Board of Directors has approved the “CSR Committee Charter,” which outlines the Committee’s composition, scope of function, tasks of WGs, method of electing WG heads and members, rules of meetings, and more.
- Handling matters relating to board meetings and shareholders meetings according to laws.
- Producing minutes of board meetings and shareholders meetings.
- Assisting in onboarding and continuous development of directors.
- Furnishing information required for business execution by directors.
- Assisting directors with legal compliance.
- Other matters set out in the articles of corporation or contracts.
- Internal audit must disclose the following items:
(1)Prepare internal audit working manuals and working papers and whether the internal controls are carried out in a reasonably effective manner, and from time to time provide recommendations for improvement.
(2)The internal audit department shall monitor the rules and procedures for self-inspection and assessments of the internal control system by business and management units, and the implementation of periodic self-inspection by each unit.
(3)Formulate annual audit plans and, based on the business risk profile of and implementation of internal audits by each subsidiary or department, determine audit plans targeted at each individual subsidiary or department.
- The internal audit department shall draft a written audit plan for the coming year at the end of each year to get the audit committee and the board's approval.
- The internal audit department presents an audit plan for the coming year to the supervisory authority via the internet in the prescribed format the end of every year, as will as a review of the previous year's audit operations by the end of February and a report on improvements made to the previous year's internal control issues by the end of May.
- The internal audit department shall conduct a routine business audit at least annually, and a special business audit on CDF's subsidiaries' finance, risk management and legal compliance with applicable acts and regulations at least semiannually. Other audit activities that cover the derivatives business should be conducted on a monthly basis.
- The internal audit report shall delivered to audit committee for review after is reported to the chairman and president & CEO within two months of completion and filed with the competent authority for recordation via an internet-based information system.
- A written report on the continued improvements as required by the supervisory authority, the CPA, the audit office and the compliance department is sent to the board and supervisors and is used as a key reference material for performance appraisal.
- The internal audit department shall supervise CDF's domestic and overseas subsidiaries in accordance with relevant regulations.
- The internal audit department assesses internal audit operations at subsidiaries once a year, submits an assessment report to the board and sends the same report to the boards of CDF subsidiaries as reference materials for performance appraisal.
- The CDF internal audit office oversees the annual self-assessment of internal controls of each department and subsidiary and reviews the subsequent reports. The reports, along with the opinions of the financial examination authority, CPA and internal audit department, are submitted to the chairman, president & CEO, chief audit officer and legal compliance officer as reference materials for evaluation of the internal control system and the drafting of an internal control compliance declaration.
- The internal audit department shall organize self-inspection programs for every year and continue proper training courses for auditors in accordance with the nature of each department.
- In case of fraud and other major legal infractions, the internal audit department shall inspect all business activities, including appropriate policies and procedures as follow:
(1)Report to the Chairman of the Board and the independent directors and inform the competent authority when significant deficiency or malpractice in compliance matters occurred. All relevant material that has been submitted to the competent authority shall be reported to the audit committee for approval.
(2)Prepare a written report for submission, with a notice to the Chairman of the Board and get the audit committee approval and report to the competent authority, when their recommendations for improvements regarding significant deficiencies or noncompliance identified in internal controls are not accepted by management and as a result CDF or its subsidiaries might incur a material loss.
(3)Request the respective departments where significant deficiency or malpractice occurred to take immediate and adequate countermeasures and shall continually conduct follow-up reviews on matters specified as requiring stronger improvement efforts. The written report on the implementation of improvement of deficiencies shall be submitted to the audit committee and the board of directors for approval.
- In order to improve audit quality and enhance auditing staffs' professional developments, auditing staff are required to take internal or external training courses of at least 30 hours per year to enhance their expertise. Since 2007, CDF internal audit department has organized an annual one-day training event for all auditors, as well as occasional study groups to enhance their expertise. Auditing staff also participate in domestic and international conferences to improve their knowledge of advanced auditing concepts and methods to boost workplace efficiency.
- Other auditing activities
(1)Items requested by the supervisory authority.
(2)Supervision of procurement at CDF and its subsidiaries.
(3)Participation in internal and external symposiums and conferences.
- The CDF internal audit department, which is subordinate to the board of directors, is in charge of general auditing affairs and the organization and scope of internal audits. The department, as a disinterested body, reports to the board and audit committee at least every half year.
- The position of chief audit officer, who supervises all auditing staffs, is on a par with that of VP, and his/her hire, dismissal or transfer shall not come into effect until approved by two thirds of board members and the supervisory authority.
2.Protection of customer privacy and personal information
4.Service quality and customer relationship management
5.Principles for Fair Treatment of Customers
2.24-hour service hotline, complaint hotline and website visitor message board
3.Customer Care Committee meeting to establish customer-care mechanism
4.Customer satisfaction survey
5.Wealth management lectures and Wealth Management Seminar
2.Facebook fans: KGI Bank: 105,111 (+9%)/KGI Securities: 33,000 (+12%)
3.LINE friends: KGI Securities: 247,000 (+71%)
4.Average customer satisfaction ratio: KGI Bank: 98.85%/KGI Securities: 97.4%/China Life Insurance: 99.16% (4 and above, out of 5)
5.KGI Bank held 35 wealth management events; KGI Securities organized 320 wealth management seminars
3.Supplier sustainability management
2.Through China Development Financial Holding Foundation and KGI Charity Foundation to communicate with related community groups
2.Organized 84 free start-up seminars at CDIB Capital Innovation Accelerator, with 2,024 attendants
3.Number of one-day startup board meetings organized (Start-up Mentor Project): Organize 15 one-day startup board meetings (Start-up Mentor Project) and three start-up workshops 2 sessions
2.Occupational Health and Safety
4.Human Rights, Equality, and Diversity
4.Employee opinion mailbox
2.Labor-management meetings: CDF, KGI Securities, and CDIB Capital Group - every 3 months; KGI Bank – every 2 months. Convened total 26 labor-management meetings in 2020
3.Proactively interact with labor unions to maintain good relations: A collective bargaining agreement was signed between KGI Bank and its labor union on June 13, 2019, covering all its regular employees
4.Collected employee opinions via opinion mailbox to understand their needs
2.Anti-money laundering and countering the financing of terrorism
3.Corporate governance and ethical corporate management
4.Information and cyber security
5.Protection of customer privacy and personal information
2.Comply with supervision and inspections by competent authorities
3.Visit competent authorities and create opportunities for direct communication
2.Selected as component stock of TWSE Corporate Governance 100 Index and TWSE RA Taiwan Employment Creation 99 Index; selected as component stock of Taiwan High Compensation 100 Index for 7 consecutive years
3.Periodically responded to irregular inspections and offered information on real-time basis
2.Corporate governance and ethical corporate management
2.Hold roadshows to share economy and industry updates with investees
3.Visit and engage in various activities organized by investees
2.Hosted roadshows to visit 344 companies
2.Information and cyber security
3.Protection of customer privacy and personal information
4.Digital finance and innovations
2.Periodically hold press conferences to announce important news to the media
Comply with supervision and inspections by competent authorities
Visit competent authorities and create opportunities for direct communication
Participated in discussions and panels held by competent authorities; in 2018, CDF cooperated with the TWSE and the Banking Bureau to promote the stewardship principle via public forum
Selected as component stock of TWSE RA Taiwan Employment Creation 99 Index and Taiwan High Compensation 100 Index for 5 consecutive years
Periodically responded to irregular inspections and offered information on real-time basis
2.Corporate governance and ethical corporate management
3.Supplier sustainability management
3.Supplier audit, supplier evaluation, supplier CSR self-evaluation, supplier training, and supplier recognition
4.Establish CDF procurement mailbox (firstname.lastname@example.org)
5.Participate in the government's green procurement projects
2.Hold explanatory meetings with suppliers before opening bids
3.Completed 103 supplier audits, 58 supplier evaluations, and 105 supplier CSR self-evaluations
4.Conducted real-time two-way communication with suppliers via the procurement mail box, which was used for supplier training during the pandemic
5.Received the green procurement awards from the Department of Environmental Protection, Taipei City Government for a third consecutive year and from the Environmental Protection Administration for a second consecutive year
The Company shall keep the whistle-blowers’ identity and relevant documents confidential, encrypted, and properly stored with restricted access.
If the whistle-blower is an employee of the Company or an employee of one of the Company’s subsidiaries, the Company shall provide appropriate protective measures to ensure that the whistle-blower will not receive any improper treatment due to the reporting.