Consistent with its commitment to corporate governance, China Life continues to promote corporate transparency, protect shareholders’ interests, strengthen the leadership structure of the Board and implement corporate citizenship. In June 2014, China Life established the Corporate Governance Guidelines, which set out the best practices in corporate governance to adhere to. In the same year, the company commissioned a scorecard report by Ernest & Young, which awarded China Life A++ grade in recognition of its compliance with laws and regulations governing listed companies and insurance companies as well as leadership in corporate governance demonstrated by the Board of Directors and senior management. Furthermore, during the evaluation period of 2014, China Life was the only independent insurer that came in the top 5% of all listed companies in Taiwan Stock Exchange’s first-ever evaluation of corporate governance.
In addition to corporate information for which disclosure is mandatory, other material information concerning the company, prepared in both Chinese and English, is available on China Life’s bilingual corporate website (revamped in 2014), which ensures equal access to information for its large base of foreign shareholders. China Life prepares and publishes English-language annual report, notice of meeting, circular and supplementary information prior to each annual meeting of shareholders to improve transparency and to make information more accessible for foreign institutional investors. China Life earned the highest score of A++ from the 12th Information Transparency and Disclosure Ranking, which assesses the corporate reporting of Taiwan’s listed companies during the period of 2014.
Rights of Shareholders
The formation, meeting procedures, announcements and resolutions of the annual meetings of shareholders and the board of directors are in accordance with the Company Law and the Securities and Exchange Act. For board elections, shareholders vote on each nominee for the Board of Directors, with the use of e-voting offering the benefit of increased participation and efficiency.
Structure of the Board of Directors
Diversity is among the critical factors that China Life considers when evaluating the composition of the Board. The Board of Directors consists of individuals with professional backgrounds that span from operations, accounting, risk management to finance while reflecting an appropriate diversity of gender, each contributing to the Board a variety of perspectives, skills and qualifications. Among the market-leading companies in the life insurance sector, China Life is the only company that has the Audit Committee, the Remuneration Committee and the Risk Management Committee in place. In 2014, China Life started its annual review of board performance in order to strengthen corporate governance and improve the efficiency of the Board.
Participation of Stakeholders
China Life acknowledges the importance of open, honest communication with all its stakeholders as well as its responsibility to respect and protect their rights. The company, in particular, encourages direct and active dialogue between employees and the management for employees’ feedback on management, financial performance and major issues that most affect their interests. China Life is currently implementing a platform through which to gather opinions from stakeholders to help it understand and address opportunities for improvement.
China Life established a corporate social responsibility guideline and formed the Corporate Social Responsibility Committee in 2014. The Committee provides oversight of the company’s operations and initiatives regarding corporate governance, environmental sustainability, philanthropy and the reporting of corporate social responsibility-related matters. Results of the performance evaluation of the Committee are published in the CSR report and the corporate annual report each year.
Board of Directors
The current Board was elected in May 2017 for the 20th term and consists of nine directors, of which three are independent directors. Three board members are female. The board composition reflects an appropriate diversity of gender, background and experience while bringing together a vast range of expertise across banking and finance, business administration, risk management and insurance, statistics, actuarial science and law. Board members continue to take courses and training in order to broaden their skills and knowledge and to keep abreast with changes in the economic and industry environment.
The following table gives information about the academic background and business experience of each board member of the 20th term.
|Date First Elected||Education and Business Experience|
|Executive Director||Yu-Ling Kuo||2017/5/26||3||2005/6/24||
|Executive Director||Tony T.M. Hsu||2017/5/26||3||2011/6/24||
|Executive Director||Stephanie Hwang||2017/5/26||3||2011/6/24||
|Executive Director||Roy Meng||2017/5/26||3||2017/5/26||
|Executive Director||Lauren Hsieh||2017/5/26||3||2017/5/26||
|Independent Director||Louis T. Kung||2017/5/26||3||2008/6/13||
|Independent Director||Wei-Ta Pan||2017/5/26||3||2008/6/13||
|Independent Director||Wen-Yen Hsu||2017/5/26||3||2013/6/14||
Board of Directors Discussion
Role and Responsibilities
The Board of Directors approved the establishment of an Audit Committee and the Audit Committee Charter on August 4, 2011 with the goals of promoting best practices in corporate governance and strengthening Board accountability. The Committee is comprised of three independent directors who possess adequate qualifications, expertise and experience for the positions. The Committee Chair is elected by and from among its members. The Audit Committee meets at least quarterly, and there should be as many meetings as the Committee’s role and responsibilities may require as set out in the Audit Committee Charter and relevant laws and regulations.
|Position||Name||Expiration of Term||Education and Business Experience|
|Independent Director||Wei-Ta Pan||2020/05/25||
|Independent Director||Louis T. Kung||2020/05/25||
|Independent Director||Wen-Yen Hsu||2020/05/25||
Role and Responsibilities
The Board of Directors approved the establishment of a Remuneration Committee and the Remuneration Committee Charter on August 4, 2011. The Committee is responsible for approving and regularly reviewing remuneration policy, guidelines, practices and structure as well as compensation programs for board members and the senior management.
The Remuneration Committee is comprised of three independent directors who possess adequate qualifications, expertise and experience for the positions. The Committee Chair is elected by and from among its members. The Committee meets at least twice a year.
The following table gives information about the academic background, business experience and meeting attendance of each member of the Remuneration Committee last year.
|Position||Name||Expiration of Term||Education and Business Experience||Attendance at Committee Meetings (%)|
|Committee Chair||Louis T. Kung||2020/05/25||
|Committee Member||Wei-Ta Pan||2020/05/25||
|Committee Member||Wen-Yen Hsu||2020/05/25||
Organization and Operation of Internal Audit Division
Organization of Internal Audit Division
The Internal Audit Division is directly subsidiary to the Board of Directors, led by the Chief Auditor and staffed with competent persons in an appropriate number as full-time internal auditors who shall perform their duties in a detached and independent manner, after having regard to the company’s investment scale, business condition, management needs, and relevant provisions of acts and regulations.
Operation of Internal Audit Division
The purpose of the internal audit system is to assist the Board of Directors and management to verify and evaluate whether the internal control system operates effectively, and to provide appropriate recommendations for improvement so as to ensure the on-going and effective implementation of the internal control system and serve as the basis of internal control system revisions. Main responsibilities include:
1. Conducting annual audits
Execute the Board-approved annual audit plan. It performs a routine audit at least annually on the company’s finance, operations, information and other management units as well as special audit as deemed necessary, following specific scopes defined by the Regulations Governing the Implementation of Internal Control and Audit System of Insurance Industries and relevant provisions of acts. Internal audit reports are delivered to the Audit Committee and Independent Director for review. The Chief Auditor regularly reports audit business to the Board of Directors and the Audit Committee.
2. Overseeing self-inspections
Oversee the self-inspection of internal control system carried out annually by the operations, finance, information and other units to establish a self-monitoring system. Self-inspection results provided by each unit are reviewed and monitored by the Internal Audit.
3. Monitoring the improvement of deficiency
Conduct continually follow-up reviews on any examination opinions or audit deficiencies brought up by the financial examination authority, CPA, or internal audit, and on matters specified in the internal control system statement as requiring stronger improvement efforts, and submit a written report on the implementation of improvement of deficiencies to the Board of Directors and the Audit Committee.