Corporate governance is a top priority for sustainable business operations and an key indicator for measuring sustainable development. The Company has been selected as a constituent stock of the Taiwan Stock Exchange's "Taiwan Corporate Governance 100 Index" for 11 consecutive years, demonstrating its strong performance in advancing corporate governance and earning recognition from the competent authorities. Sound corporate governance is reflected in the Board of Directors and management acting in the best interests of the Company and its stakeholders, while effectively overseeing and managing corporate operations to achieve business goals. Meanwhile, it encourages companies to utilize resources and improve efficiency, thereby strengthening competitiveness and promoting the wellbeing of the public and society.
Corporate Governance Framework
TCFHC upholds the principle of placing shareholders first and operates under a governance structure in which the Board of Directors serves as the highest governing body. This structure is designed to enhance organizational effectiveness and safeguard the interests of stakeholders, including shareholders, employees, and customers, thereby laying the foundation for sustainable operations.
Board Structure and Operating Mechanism
Operations of the Board of Directors
TCFHC has established a well-defined corporate governance framework and operates in accordance with governance related regulations, including the "Articles of Incorporation" , "Corporate Governance Best Practice Principles" , "Ethical Corporate Management Best Practice Principles" , and "Sustainable Development Best Practice Principles" . Based on these, the Board of Directors is entrusted with the highest authority in corporate governance and is responsible for making sustainable development decisions on economic, social, and environmental dimensions.
Since 2021, directors and independent directors have been elected under a candidate nomination system, with shareholders electing them from a list of nominees for a term of 3 years. In 2025, a total of 13 Board meetings were held, and the average attendance rate of all directors in 5 th term reached 93.33%.
The Board of Directors consists of 15 members, including 1 executive director, 5 independent directors, and 9 non-executive directors. The chair of the Board and the CEO are not the same person, nor are they spouses or relatives within the first degree of kinship. In addition, non of the directors are spousal or relatives within the second degree of kinship of one another, and no independent directors has served more than 3 consecutive terms. These arrangements support the independence of the Board of Directors.
The members of the Company's 6 th Board of Directors possess rich experience and expertise in various fields, including business management, leadership and decision-making, knowledge of the industry, international perspectives, financial accounting and taxes, and law. Among them, 3 independent director have served for less than 3 years, while 1 independent directors have served for more than 3 years but less than 6 years, 1 independent directors have served for more than 6 years but less than 9 years, the average tenure of 6th Board members is 2.67 years. Currently, 3 directors in the Company are employees (including employees from affiliates). The number of directors concurrently serving as the Company's manager does not exceed one-third of the total number of directors. The age distribution of the directors is diverse, with 3 directors below the age of 50, 3 directors aged between 50 and 60, and 9 directors aged 61 or above, as of July 15, 2026. In terms of gender, there are 13 male directors (86.67%) and 2 female directors (13.33%). Regarding industry experience, 92.86% of the directors have relevant Global Industry Classification Standard (GICS) financial work experience (Tso-Cheng Su is an executive director and therefore not included in this calculation).
The Company places great importance on gender equality in the composition of the Board of Directors. The Board composition is primarily determined based on directors' professional backgrounds, experience, level of participation in the Company's future development, and overall contributions, without imposing restrictions on gender ratios. Going forward, the Company will continue to promote gender equality among Board members, with the goal of having at least 2 female directors on the Board. At present, the number of female members in the Board of Directors in this term is two, which has achieved the goal, and we will work towards increasing the number of female board members. The relevant implementations are listed as follows:
Functional Committees
To enhance the functions and strengthen the independence of the Board of Directors, the Company has established 3 functional committees under the Board ,namely the Remuneration Committee, the Audit Committee, and the Sustainable Development Committee. In addition, special committees have been established under the Chair to enhance corporate governance and improve risk management and legal compliance systems.
Critical Concerns
Each responsible unit of the Company reports key material matters to the Board of Directors in accordance with operational practice or regulatory requirements, enabling the Board stay informed and communicate in a timely manner.
A total of 26 such matters were reported in 2025. For further information, please refer to the official TCFHC website .
Continuing Education for Directors
TCFHC follows the “Directions for the Implementation of Continuing Education for Directors of TWSE Listed and TPEx Listed Companies” in arranging continuing training for directors. Through capability enhancement and experience sharing, the Company seeks to strengthen directors’s professional knowledge and competencies and enhancing corporate governance effectiveness.
In 2025, directors completed a total of 167.5 hours of continuing education, covering topics such as corporate governance, FinTech, IT security, anti-money laundering, risk management, internal control and audit, and corporate AI transformation. In addition, to help directors effectively keep abreast of ESG issues and development trends, each director participated in at least 1 ESG-related courses. For information on the courses attended by directors, please refer to the TWSE Market Observation Post System .
Performance Policies Evaluation of the Board of Directors
The "Board of Directors Performance Evaluation Guidelines" were established to enhance the operational effectiveness of TCFHC's Board of Directors. The Board of Directors and functional committees shall conduct internal performance evaluations each year. They shall also engage external independent professional institutions or teams of external experts and scholars to conduct evaluations at least once every 3 years. The evaluation results shall be reported to the Board of Directors by the end of March of the following year. The result of such evaluations are used as a reference for selecting or nominating directors, while the results of each individual director's evaluation serve as a reference for determining their respective individual remuneration.
In 2023, the Company engaged a third-party institution to conduct an external performance evaluation of the Board of Directors. The overall performance in 3 major dimensions, namely, "Structure", "Members", and "Process and Information" was rated "Advanced", "Advanced", and "Benchmark", respectively. The scope of the Board of Directors' internal evaluation for 2025 included the Board as a whole, individual members of the Board, and functional committees. The evaluation methods consisted of internal self-evaluation and individual self-evaluations. All evaluation results were rated as "Excellent". The evaluation cycle, period, scope, methods, and results for the performance evaluation of TCFHC's Board of Directors are all disclosed on the Company's official website .
Remuneration of Directors and Senior Management
Directors
The Company's directors' remuneration includes monthly compensation, health check-up subsidies (on a reimbursement basis), research fees for functional commitees, and directors' remuneration. The monthly compensation standard for directors (excluding the chair) is determined by the Board of Directors with reference to the recommendations of the Remuneration Committee, taking into account their level of participation in the Company's operations, the value of their contributions, the Company's operating performance, and prevailing industry standards. In addition, the Company conducts internal performance evaluations of directors annually and external evaluations every 3 years. The results are submitted to the Remuneration Committee and the Board of Directors as a reference for determining directors' remuneration. Independent directors who serve as members of functional committees are additionally paid research fees based on the number of meetings attended. Directors' remuneration is based on the Company's pre-tax profits before deducting employee and director's remuneration, and shall not exceed the limit set out in the Articles of Incorporation (up to a maximum of 1%). After review and approval by the Remuneration Committee and the Board of Directors, it is reported to the shareholders’ meeting. The Chair's compensation is stipulated in the Articles of Incorporation and is set at 1.25 times the total income received by the General Manager.
Senior Management
The Company has established its Articles of Incorporation and relevant governing salaries, bonuses, and remuneration. Remuneration is determined based on managerial rank and grade, position, and individual performance evaluations. To ensure that remuneration remains aligned with general market standards, the Company regularly reviews the annual remuneration levels of comparable positions within the industry. Furthermore, the salaries and annual bonuses of personnel at the managerial level and above are submitted annually to the Remuneration Committee and the Board of Directors for review and approval.
Fixed Remuneration
The salaries of the Company's senior management (excluding the CEO) are determined based on the corresponding salary standard under the Company's "Employee Salary Scale" for the relevant rank and grade. Each year, the proposed salary standards for these positions are submitted to the Remuneration Committee for recommendation and then presented to the Board of Directors for approval. Any new or revised standards form managerial position allowances and meal stipends follow the same procedure-first reviewed by the Remuneration Committee, and then submitted to the Board of Directors for deliberation and approval before implementation. At the end of each year, in accordance with regulatory requirements, the Company also submits the remuneration policies for managerial personnel to the Remuneration Committee for review and evaluation.
The remuneration standard for the CEO is proposed annually by the Remuneration Committee and subsequently submitted to the Board of Directors for approval. Any adjustments to this compensation follow the same procedure.
Variable Remuneration
Variable remuneration mainly refers to performance-based bonuses, including evaluation bonuses, performance bonuses, and employee remuneration, all of which are paid on a deferred basis.
The annual performance evaluation of the CEO includes both financial and non-financial indicators. Financial indicators includes the target achievement rate and growth rate of earnings before tax, the target achievement rate and growth rate of return on equity (ROE), the achievement and growth rate of output ratio, the non-performing loan ratio, and the loan coverage rate and expected loan coverage ratio excluding loans to government agencies. Non-financial indicators include the effectiveness of subsidiary management and business reform, as well as comparisons with the financial performance of industry peers, including profit target achievement rate, return on equity (ROE), and return on total assets (ROA). These indicators are comprehensively considered to determine the amount of the CEO's annual variable compensation, the ratio between fixed and variable compensation is estimated 7:3 in 2025. In addition, the Company links part of the CEO's remuneration to a long-term retention mechanism via an employee stock ownership trust, under which the Company's contributions may not be claimed until at least 6 years. This deferred variable remuneration accounts for approximately 0.6% of the CEO's total annual remuneration. Furthermore, if any confirmed civil liabilities to the Company arise before bonus distribution, the bonus is subject to separate review and potential reduction or cancellation by the Board of Directors.
In recent years, to enhance the Group's ESG performance and encourage senior management (including the CEO) to prioritize corporate sustainability, the Company has added a "Significant Achievements" section to the senior management performance evaluation form, in addition to records of rewards and disciplinary actions and attendance. This section includes key evaluation criteria such as the execution of major annual ESG initiatives and significant positive achievements, including but not limited to corporate governance, business operations, environmental sustainability, and corporate social responsibility. These are treated as key indicators in year-end evaluations. Moreover, the Company has designated concrete and outstanding ESG-related actions taken by managerial personnel as important indicators in determining annual remuneration. These are reviewed by the Remuneration Committee and submitted to the Board of Directors for final approval. Subsidiaries are also evaluated based on the execution of major ESG topics and key operational policies. Subsidiaries may submit relevant evidence and documentation to apply for additional performance evaluation points, up to a maximum of 10 points.
Shareholding
Although the Group has not established specific shareholding requirements for senior management, it has included the Company's profit performance as an evaluation indicator for business performance bonuses. The Group also links it to the employees' performance evaluation and rewards, hoping that the long-term interests of the management and shareholders will gradually align. The shareholding of the president and other senior management has gradually increased over the years. In addition, to strengthen employees' enhance employees' commitment to the Company starting from 2024, the "employee stock ownership trust" has been expanded to cover the Company and all subsidiaries within the Group. The Company allocates monthly subscription funds (company contributions) for employees participating in the trust, encouraging employees and senior management to regularly and systematically purchase and hold the Company's shares during their tenure, thereby sharing the Company's operational achievements as shareholders.
Board of Directors and Key Management Succession Plan
The Company's Board of Directors is composed of 15 members, including 6 directors representing government shareholders-nominated by the Ministry of Finance, the largest shareholder-from among senior civil servants, professional managers, and industry experts; 4 directors representing private shareholders, and 5 independent directors with extensive management experience, academic expertise, or professional qualifications.
The government-appointed director representing public shareholdings was carefully selected by the Ministry of Finance based on merit. The director possesses strong expertise in business management, strategic decision-making, industry knowledge, global perspective, finance and taxation, as well as legal affairs. Under professional leadership and effective collaboration with the management team, the Company has achieved steady profit growth and consistent dividend payouts in recent years. Our operational performance has been well recognized and highly regarded by investors.
The election of independent directors in the Company is conducted through a candidate nomination system, whereby shareholders elect independent directors from a list of nominated candidates. The independent directors possess professional qualifications and practical experience in areas such as business, law, finance, accounting, or other fields relevant to the Company’s operations. Their expertise provides substantial support in safeguarding consumer and investor interests and in strengthening corporate governance.
A majority of the members of our Board of Directors are government-appointed directors representing public shareholdings, selected by the Ministry of Finance based on merit. The Company ensures that directors receive appropriate continuing education by encouraging their participation in seminars, workshops, forums, or training programs covering key corporate governance topics, including finance, risk management, business operations, legal affairs, accounting, and internal control systems. These efforts also contribute to the development of future leadership and succession planning.
Succession Planning for Key Management
Most of the senior management positions in the Company are concurrently held by executives at the department head level or above from the head office of TCB. The implementation status of TCB management development plan for the year 2025 is as follows:
Regular Training Programs for Management Personnel:
To ensure continuity in leadership, regular training courses are provided for management personnel at all levels. Both internal and external experts are invited to deliver lectures, aiming to enhance professional competencies and soft skills, while expanding and enriching the talent pool. In addition, various departments conduct business-related training programs to continuously strengthen the financial expertise and professional knowledge of managers at all levels.
Specialized Programs for Management Personnel at All Levels
- Succession Planning for Senior Executives (Including CEO and Deputy General Managers): Selected department heads participated in the "Senior Talent Training Program for Public-Owned Enterprises" held by Ministry of Finance, 5 participants attended in 2025, with a total of 21 individuals being prepared for senior executive positions.
- Newly Appointed General Managers: Newly promoted managers participated in the "Training Program for New Managers", with 2 sessions held in 2025 and a total of 30 participants. Course content included branch operations sharing, customer complaint handling, financial-friendly services, key business topics (credit, and foreign exchange), and performance enhancement techniques and leadership communication skills taught by expert instructors.
- General Manager Candidates: Deputy general managers were selected to attend the "Advanced Executive Management Development Workshop". 2 sessions were held in 2025 with 58 participants, bringing the total pool of trained managerial candidates to 246. The program included branch experience sharing, discussions on key business issues by supervising departments, training on performance goal management, core leadership, and sales strategies.
- Deputy General Manager Candidates: Assistant general manager were selected to attend the " Intermediate Executive Management Development Workshop". 2 sessions were held in 2025 with 109 participants, bringing the total number of trained assistant manager candidates to 324. Course topics included key business issues (credit, digital finance, and wealth management), complaint handling, and leadership training focused on team development.
- Newly Appointed Assistant General Manager: Outstanding employees who passed qualification assessments were promoted to managerial positions and enrolled in the "Junior Executive Seminar". 1 session was held in 2025 with 138 participants. Topics included key business issues (AML, audit findings, deposits and remittances, complaints, wealth management, and digital finance) and foundational supervisory skills taught by professional instructors.
In alignment with business needs, an annual training plan was developed to offer a wide range of professional courses aimed at enhancing the functional competencies of management personnel. In 2025, a total of 81 training sessions were conducted for assistant manager-level personnel and above. The training topics were diverse, covering core business areas such as deposits and remittances, foreign exchange, loans, and wealth management, as well as regulatory compliance, anti-money laundering, environmental sustainability, and industry outlook. The total number of participants across all sessions reached to 7,171.
Regular Promotion Assessments:
In accordance with the "Guidelines for Promotion Assessment of Current Employees" and related regulations, the Company regularly evaluates workforce allocation at all levels to determine the number of eligible promotions. Promotion assessments are conducted on a regular basis. In 2025, a total of 1,555 employees were promoted, including 449 individuals promoted to assistant manager level and above.