Performance evaluation of the Board of Directors and Functional Committees

Board and Functional Committee Performance Assessment Results

The Board of Directors of the Company amended the ‘Regulations for Evaluation of the Performance of the Board of Directors’ on 6 November 2020 to conduct internal self-evaluation of the ‘Board of Directors and Board Members’, the ‘Audit Committee’ and the ‘Remuneration Committee’ at the end of each year by the Board of Directors' business units, members of the Board of Directors and the Functional Committees, and the self-assessment at the end of 2023 was reported at the first meeting of the Board of Directors of 2024, and the contents and results of the evaluation are set out below:

Self-Evaluation	Aspects	Evaluation Indicators	Results
I. Board of Directors	a) Understanding of company goals and missions b) Level of participation in company operations c) Management and communication of internal relationships d) Enhancing the quality of Board decisions e) Board composition and structure f) Awareness of directors’ responsibilities g) Selection, expertise, and continuous education of directors h) Internal control	50 Items	Excellent
II. Audit Committee	a) Level of participation in company operations b) Awareness of Audit Committee responsibilities c) Enhancing the quality of Audit Committee decisions d) Audit Committee composition and member selection e) Internal control	20 Items	Excellent
III. Remuneration Committee	a) Level of participation in company operations b) Awareness of Compensation Committee responsibilities c) Enhancing the quality of Compensation Committee decisions d) Compensation Committee Composition and Member Selection	16 Items	Excellent

The evaluation results of the Board of Directors and the two functional committees were all ‘Excellent’, which demonstrated that the functions and operational efficiency of the Board of Directors and the functional committees of the Company were good.

External Evaluation Results of the Board Performance

I. Basis

To enhance corporate governance and improve the functionality of the Board of Directors, in accordance with the " Methods for evaluating the performance of the Board of Directors," the company's Board of Directors' performance evaluation must be conducted by an external professional independent institution or team of external experts at least once every three years.

In October 2022, the company appointed the Taiwan Corporate Governance Association , (hereinafter referred to as the "Association") to evaluate the effectiveness of the Board. The Association and the executing experts are independent and have no business dealings with the company. On February 1, 2023, the Association issued a report on the Board performance evaluation. The aforementioned external evaluation results were reported to the company's first Board meeting in 2023.

1. Evaluation Period: December 1, 2021, to November 30, 2022.

2. Evaluation Method:

o The Association conducted a review of the company’s explanations and related documents regarding the performance evaluation indicators.

o On January 13, 2023, the Association conducted online interviews with the Chairman, General Manager, two independent directors, the Corporate Governance Officer, and the Internal Audit Officer.

3. Evaluation Content and Scope:
The evaluation examined the operation of the company's Board of Directors across eight key areas:

o Composition of the Board of Directors

o Guidance provided by the Board

o Delegation of authority by the Board

o Supervision by the Board

o Communication of the Board

o Internal control and risk management

o Self-discipline of the Board

o Other areas such as Board meetings and support systems

2. Summary of the External Institution's Board Performance Evaluation Results

I. Overall Evaluation

1. Board Composition
The composition of your company’s Board of Directors aligns with the company’s development needs and future strategic business plans. The Board includes professionals with expertise in healthcare, business, finance, accounting, and corporate management, demonstrating a high degree of diversity in professional fields.

2. Independent Directors
The independent directors of your company possess extensive industry experience and managerial expertise. They actively share their perspectives and maintain excellent interactions with internal audit. The company also fully respects the opinions and feedback provided by the independent directors.

3. Strategic Planning
Your company has established a comprehensive strategic planning process. Operating under the parent group’s “large fleet” model and adhering to the group’s vision and strategies, the company provides quarterly reports to the Board and functional committees regarding business strategies and their implementation. This allows all Board members to have a clear grasp of strategic directions and progress.

4. Sustainability Development
In line with the parent group’s goal of achieving net-zero carbon emissions by 2050, your company actively engages in sustainability initiatives, including tracking greenhouse gas emissions and setting specific carbon footprint goals. Although your company has not yet reached the threshold for preparing a sustainability report, it has proactively planned and prepared for it, showcasing its commitment to sustainable operations, which is commendable.

5. Corporate Governance Evaluation Results
Your company’s corporate governance evaluation ranking has significantly improved from the 51%-65% range in the 6th evaluation to the 6%-20% range in the 8th evaluation. This reflects the company’s determination to implement corporate governance practices and enhance Board performance.

II. Recommendations

1. Board Composition Diversity
Considering the company’s current development stage and revenue scale, it is recommended to utilize Board re-election opportunities to increase the number of independent directors or appoint female directors to further enhance Board diversity.

2. Risk Management Participation
While the company has established a risk management team primarily composed of management members, reports to the Board are currently presented in summary form without independent directors’ participation. It is recommended that sustainability and risk management meetings held quarterly include audit committee members to improve their understanding of existing or potential risks.

3. Internal Audit Performance Assessment
Although the company has implemented a performance assessment system for internal audit supervisors, it is currently managed by the HR department without considering input from independent directors. It is suggested that independent directors be given opportunities to provide input during the evaluation process to strengthen the audit committee’s oversight functions.

4. Whistleblower Mechanism
Your company has established an integrity reporting mailbox for internal and external parties to report suspected violations of integrity policies. However, an independent director’s mailbox has not yet been set up. It is recommended that the company enhance its current reporting mechanism by creating an email system that allows independent directors and the designated unit to receive reports simultaneously. Relevant procedures should be documented and made public to establish a comprehensive whistleblower system.

5. Onboarding and Training for Directors
While the company has implemented an initial training program for new directors, which is valued by the Chairman, it has not yet been institutionalized. It is recommended to formalize and document this process to help new directors quickly understand the company’s operations and effectively fulfill their duties.

III. Improvement Plan

The company will gradually address the recommendations provided by the external evaluation entity to enhance corporate governance and strengthen Board performance.