Kedge Construction upholds the highest principles of “integrity, quality, service, innovation, and sustainability.” The Board of Directors serves as the ultimate decision-making body for corporate development and strategic direction formulation. The Audit Committee and Compensation Committee fulfill their supervisory responsibilities while actively implementing diversity and independence among board members to enhance corporate governance effectiveness.
The Board of Directors is the highest management level of the enterprise’s operating mechanism and is responsible for the future development and strategy of the enterprise. Kedge Construction upholds the concept of sustainable management and aim to create the maximum benefits and values for our customers, shareholders, employees, and society. With “integrity, quality, service, innovation, and sustainability” as our highest guiding principle, we implement the principles of financial disclosures and information transparency, ensuring appropriate and efficient business operation and management and committing ourselves to protecting shareholders’ rights and interests.
Board Operations
In 2024, the Board of Directors convened six times, with an average attendance rate of 96.83%. The Kedge Construction Board of Directors, as the company’s highest governance body, consists of nine directors(all male). According to Article 192-1 of the “Company Act” and Article 15 of Chapter 4 of the “Kedge Construction Articles of Association,” the nomination of Kedge directors follows a candidate nomination system. The nomination of board members is highly rigorous, considering not only their expertise but also their reputation in ethics and leadership. The independence of independent director candidates must also comply with the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies. According to relevant laws and regulations, shareholders holding more than 1% of the total issued shares of the company can submit a list of candidates to the company, allowing shareholders to participate in the nomination process for board candidates. All director candidates are elected by voting at the shareholders’ meeting. Currently, the nine directors (including three independent directors) each have more than five years of work experience in fields ranging from business, law, finance, and accounting to areas necessary for company operations. They are assigned tasks according to the situation and report to the board of directors.
To promote honesty and ethical behavior among directors and enhance corporate governance, the company has established a code of ethical conduct for directors: all directors must prevent and mitigate conflicts of interest, and independent directors maintain their independence within their scope of business. The annual report discloses the compliance of independent directors with the independence requirements to ensure compliance with Article 3 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.” The board of directors has established an Audit Committee, a Remuneration Committee, and a Sustainable Development Committee to assist in oversight and improve corporate governance performance.
Members of the Board of Directors
The company has specified in the “Corporate Governance Best Practice Principles” and the Procedures for Election of Directors that the diversity principle, business operation, business model, and development shall be considered for the composition of members, without restrictions on gender, age, and education. In practice, each board member has expertise and practical experience in various fields of business administration, construction management, and accounting in alignment with the diversity policy.
Implementation of the diversity policy in 2024
3. Our current board of directors is composed of nine members. The specific management objectives and achievement status of the board’s diversification policy are as follows:
4. Diversity Management Objectives: According to Article 20 of our company’s “Corporate Governance Best Practice Principles,” the composition of board members should consider diversity. Our current board of directors is composed of nine members, including six directors and three independent directors, all of whom have extensive experience and expertise in civil engineering, finance, business, law, and management. Additionally, our company emphasizes gender equality in the composition of the board. Currently, we aim to have at least one female director (for the next board re-election, this management objective will guide the nomination process). Moving forward, we will continue to strive to achieve a goal of having more than 25% female directors.
The remuneration for the directors of Kedge Construction is negotiated based on the degree of directors’ participation in the Company’s operations and the value of their contributions, covering the Company’s economic, social, environmental, and sustainable goals. The Company has also established the “Regulations Governing the Evaluation of the Performance of the Board of Directors” and the “Director and Manager Performance Evaluation and Salary Management Regulations”. According to the current “Company Articles of Association”, if there is a profit in the current year, no more than 2% can be set aside as remuneration for directors and supervisors. The actual distribution ratio and amount shall be proposed by the Board of Directors in the proposal for the distribution of shareholder dividends and submitted to the shareholders’ meeting for resolution.
Effectiveness of the Board of Director GRI 2-17
Directors’ advanced training
Kedge Construction arranges for directors to participate in advanced courses each year on directors’ professional skills and knowledge as well as issues related to sustainable development, so as to strengthen the professional ability of directors and the company in response to operational impacts. In 2024, there were accumulatively 66 hours of the advanced course participation.
Link between the ESG performance and the remuneration of directors and senior management
In order to link the performance of the senior management with the Company’s sustainable vision and short-, medium-, and longterm goals, evaluate the core competencies of the senior management, strengthen the responsibility of the senior management, and implement the linkage between performance and salary, Kedge Construction has included ESG strategic goals as one of the evaluation items for directors’ remuneration changes, and has established an “incentive system and sustainable performance linkage policy” to include sustainability as one of the performance indicator items, with the general manager and senior managers accounting for 10% and 20% respectively. The evaluation focuses on executing the Company’s annual sustainable development goals, implementing honest business operations, promoting corporate governance, and supporting sustainable responsible procurement, so that the goals of senior management are consistent with the Company’s ESG sustainable development strategy.
Performance Evaluation of the Board of Directors
Article 3 of the company’s “Regulations on the Performance Evaluation of the Board of Directors” stipulates that the internal performance evaluation of the Board of Directors shall be carried out at least once a year; the external evaluation by an external professional independent organization or a team of external experts and scholars shall be carried out at least once every three years.
Results of internal evaluatio
Board Performance Self-assessment Based on the collection of relevant meeting data of the company’s Board of Directors in 2024, the “Board Performance Self-assessment Questionnaire” was filled out based on the five major aspects. Scores were assigned according to evaluation standards reflecting actual operational performance, resulting in an average score of 4.47 out of 5.0. The self-assessment results were rated as “Excellent.” Our company has a total of nine directors (including independent directors).
In December 2024, nine “Board Member Self-Evaluation Questionnaires” were distributed, with a 100% return rate. After summarizing and compiling the results, the average score from the self-evaluation questionnaires was 4.78 out of 5. The self-evaluation result is rated as “Excellent.”
Results of external evaluation
In February 2023, Kedge appointed the Taiwan Association of Board Governance to conduct an external evaluation of the performance of the Board of Directors during 2019-2022. The evaluation concluded that the Company’s board members have diverse professional backgrounds, actively plan measures for net zero carbon emissions and carbon reduction paths, attach importance to community care, and strictly control construction schedule execution and construction quality. It also recommended that the Company establish a system of initial director training, report ESG implementation status to shareholders’ meetings, and entrust fair and neutral professional organizations to improve the whistleblowing mechanism. External evaluation of Board of Directors performance for 2023-2025 is scheduled to be conducted in 2026.
Management of the conflicts of interest
The procedure rules of the Board of Directors of Kedge Construction and the organizational regulations of the functional committees all have provisions on the avoidance of interests. If a director’s proposal involves the interests of himself, his spouse, blood relatives within second-degree relatives, or a company in which the director has control and affiliation, he shall explain his interest at the current board meeting. If there is concern about impairing the interests of the company, he shall not participate in the discussion and vote. He shall be withdrawn during discussion and voting, and shall not exercise other directors’ voting rights on behalf of other directors; the names of relevant directors, descriptions of important contents and circumstances of withdrawal shall be recorded in the meeting minutes. Directors and managers are also required to complete the annual related party transaction statement and report the results to the Audit Committee.
In addition, Kedge has also formulated a code of integrity for employees at different levels, a code of ethical conduct for directors and managers, and a code of professional ethics for employees. As of the end of 2024, there have been no major conflicts of interest in Kedge Construction.
