Corporate Governance

TWSE 2637 / LSE WML

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    • Wisdom’s Board of Directors consists of 9 directors, and 5 of them are independent directors.The candidates nomination system is adopted by Wisdom for election of the directors, which is expressly stipulated in the Articles of Incorporation of the Company 74.

      Members of the Board of Directors (starts on May 31, 2024 and ends on May 30, 2027)



    • Board diversity：

      Given the unique nature of the shipping business, we work with partners with various backgrounds in the global market. Diversity on the board of directors and in the workforce is a valuable element to the company's operations. However, diversity also means a wide range of attributes. In the interest of consistency and stability, the disclosure of information lists only gender, nationality, age, concurrent positions as employee, and professional background.
      The company emphasizes gender diversity and a broad range of professional knowledge and skills in the composition of our Board of Directors. The specific management goal is to have women comprise one-third of the board seats and to ensure that directors possess diverse professional skills, including accounting, finance, and law, to strengthen the board's structure.
      The Board consists of 9 members: 5 independent directors (56%) and 4 non-independent directors (44%). Among them, there are 2 female directors (22%), 1 Japanese director (11%), 2 directors aged 30-50 (22%), and 7 directors aged over 50 (78%). Only the Chairman also serves as the President (11%), while the remaining 8 directors (89%) do not hold any employee or executive positions. Additionally, 3 directors (33%) have a background in the maritime industry, while the other 6 directors (67%) possess expertise in accounting, finance, law, and other fields. The proportion of female directors on the board has not yet reached one-third, primarily due to the historical and industrial characteristics of the shipping industry, which result in fewer female candidates with relevant industry experience. To address this, the company plans to utilize the independent director talent database platform to identify suitable female independent director candidates. The company aims to gradually increase the proportion of female directors within the next 1 to 2 board terms.



    • Professional knowledge and independence of Directors：

      • All current members of the board of directors of the company are in compliance with Article 26-3, Paragraph 3 and Paragraph 4 of the Securities and Exchange Act. None of the board members (including the 5 independent directors) is a spouse or relative within the second degree of kinship to another board member.
      • All independent directors meet the requirements for active qualifications, passive qualifications, and independence in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.

    • The resolution of financial and operational strategies of the Company.
    • The audit of the internal control and operation results of the Company.
    • The approval of material transaction and investment of the Company.
    • The endorsement of subsidiaries’ monetary loan.
    • The approval of the material HR arrangement of the Company.
    • Complying with ROC Laws and Regulations and the TWSE Corporation Rules related to TWSE listing.

    Note 1: Matters under §14-3 of the Securities and Exchange Act
    Note 2: Objection or reservation from independent director

    • Members of the current committee (starts on May 31, 2024 and ends on May 30, 2027)

      Independent Director, Lin Tse-Chun
      Independent Director, Chiu Yung-Ho
      Independent Director, Liu Tsai-Ching
      Independent Director, Maa Kwo-Juh
      Independent Director, Chen Ching-Yi

    • The Audit Committee meets at least once a quarter and at anytime as needed. The Audit Committee consists entirely of the independent directors of the Company, and all members recommend one person as the convener and the chairman.

    • The primary responsibility of the Audit Committee is to assist the board of directors in performing its duty to oversee the accounting, audit, and financial reporting processes in the Company and the quality of financial management.
    • Matters to be reviewed by the Audit Committee include:
      • Fair presentation of financial statements
      • Effective enforcement of internal control
      • Adequacy of accounting policies
      • Management of existing or potential risks
      • Material asset or derivative transactions
      • Material loans, endorsements, or guarantees
      • Appointment and removal of financial, accounting, or internal audit officers
      • Selection/Change of certificated public accountants and their independence and performance
      • Performance of Audit Committee's responsibilities
      • Audit Committee Performance Self-assessment Questionnaire
      • Securities offerings or issues
      • Compliance with relevant laws and regulations

    • Review of financial reports:

      The board of directors prepared the 2023 business report, financial statements, and earnings distribution plan. In particular, Ernst & Young Taiwan has audited the 2023 financial statements, and issued an audit report. The reports above have been reviewed by the Audit Committee as correctly portraying the Company's business activities.

    • Assessment of validity of the internal control system:

      The Audit Committee evaluates the validity of the Company's policies and procedures regarding the internal control system (including finance, operations, risk management, information security, outsourcing, compliance and other control measures), and reviews the Company's audit department and certifying CPA as well as regular reports from the management, covering both risk management and compliance.

    • Appointment of certifying CPA:

      The Audit Committee is tasked with monitoring the independence of the certifying CPA firm for the purpose of ensuring impartiality in financial statements. In general, apart from tax related services or specially approved business activities, the certifying CPA firm is not allowed to provide any other service to the Company. All services provided by the certifying CPA firm must have the Audit Committee's prior approval.
      To ensure independence of the CPA firm, the Audit Committee has followed Article 47 of the Certified Public Accountant Act and the rules regarding integrity, impartiality, and independence in No. 10 Bulletin of Norm of Professional Ethics for Certified Public Accountant of the Republic of China and devised an independence evaluation form. The form is intended to assess the independence, professional training, and competence of CPAs and whether they are related parties to or share business or financial interest with the Company. The 33rd meeting of the 5th Audit Committee on November 27, 2020 and the 33rd meeting of the 5th board of directors on November 27, 2020 reviewed and passed that all certifying CPAs at Ernst & Young Taiwan met the independence criteria.

      Note 1: Matters under Article 14-5 of the Securities and Exchange Act
      Note 2: Resolutions that are passed by a two-thirds majority or more of the directors but without being passed by the Audit Committee

    • The frequency of communication between independent directors and internal audit officers and auditors is at least once a month, between independent directors and CPA is at least once every four months. Communicate through the Audit Committee or individually with independent directors or by emails, and contact directly at any time as needed. The communication is in good condition.
    • The internal auditor attend the audit committee every month to report the audit work, audit results and follow-up report to the independent directors.
    • Independent directors and internal auditor all attend the board meeting every month. The internal auditor reports the internal audit work at each board meeting.
    • When reviewing quarterly, semi-annual and annual financial reports, CPA will attend the audit committee to report the process of reviewing or auditing the financial statements, the scope of matters and the update of relevant laws and regulations.
    • Summary of the communication between independent directors and internal audit manager：

    • Summary of the communication between independent directors and CPA :

    • Members of the current committee (starts on May 31, 2024 and ends on May 30, 2027)

      Independent Director, Lin Tse-Chun
      Independent Director, Chiu Yung-Ho
      Independent Director, Liu Tsai-Ching
      Independent Director, Maa Kwo-Juh
      Independent Director, Chen Ching-Yi

    • The Remuneration Committee meets twice a year. The Remuneration Committee consists entirely of the independent directors of the Company, and all members recommend one person as the convener and the chairman.

    • Review regularly the Remuneration Committee Charter and present recommendations for amendment.
    • Set and review regularly the annual and long-term performance targets for directors and managers and the remuneration policies, systems, standards, and structures.
    • Assess regularly the progress of directors and managers toward their performance targets, and set the contents and amounts of individual compensation packages.

    • The Remuneration Committee met 3 times in the last year (2024).
      The details of the attendance are as follows:

    • Determine the criteria for professional know-how, skills, experience, gender diversity background and independence for board members and executive officers, and search, review, and nominate candidates for directors and executive officers accordingly.
    • Establish and develop the organizational structure of the board and its committees, conduct performance evaluation for the board of directors and its committees as well as directors and executive officers, and evaluate independence of independent directors.
    • Establishes and reviews regularly continuing training programs for director and succession plans of directors and executive officers.
    • Devise the Company's Corporate Governance Best Practice Principles.

    The Company established a CSR committee in October 2017, and then abolished the committee and established an ESG committee according to the law on March 25, 2022. The board of directors appoints the convener, who appoints members to the committee and the ESG Task Force to support environmental, social, and governance development.The Board of Directors reviews the sustainability report, with the ESG Task Force reporting to the Board on the execution of sustainability practices, including but not limited to stakeholder communications and sustainability performance inventory. The Board also reviews and oversees sustainability strategies and progress, providing necessary guidance. The last report was presented to the board of directors on August 23, 2024.

    • Follow the business strategies devised by the board of directors and promote implementation of the sustainability policy.
    • Devise detailed plans to enforce the sustainability policy.
    • Take inventory of stakeholder communications and sustainability activities, and summarize sustainability trends.
    • Prepare the Sustainability report, obtain approval from the Board of Directors, and make disclosures according to the law.

    The company established the Safety Management Committee in September 2017. The convener is appointed by the Board of Directors. The convener selects members to improve and strengthen the company's ship operation safety management and enhance ship-shore safety awareness.

    • Evaluate the efficiency of the safety management system and make necessary revisions.
    • Ensure the management of vessels and the results of external audits and evaluations, reducing port inspection deficiencies.
    • Integrate information from various departments and coordinate dock repairs and procurement arrangements to ensure the seaworthiness of vessels.
    • Review accidents and inspection deficiencies and recommend related rewards and penalties.
    • Compile the latest safety management regulations and information.
    • Regularly report safety management-related issues to the Board of Directors.

    • The Guidelines for Performance Evaluation of Board of Directors and Functional Committees state that the board of directors and functional committees shall perform performance evaluation at least once a year. Board evaluation shall be performed by external independent agencies or teams of experts and scholars at least once every three years.
      Results of internal and external board evaluation shall be completed within three months after the end of a year.

    • The evaluation criteria for the board of directors and functional committees shall include at least the five criteria below:
      • Director participation
      • Quality of meeting discussions and decisions
      • Board composition and structure
      • Education and training completed by directors
      • Corporate governance and culture

    • Every year, when all questionnaires are completed and collected, the Corporate Governance follows the guidelines above to perform analysis, and includes quantitative indicators before presenting the report to the board of directors and making recommendations for improvement at the same time.

    • The Guidelines for Performance Evaluation of Board of Directors and Functional Committees state that the board of directors and functional committees shall perform performance evaluation at least once a year. The Board and functional committee members completed self-assessment questionnaires.

    • Recommendations for improvement from the 2023 internal evaluation:
      • Courses can be decided after the Nominating Committee has discussed course contents and considered the backgrounds of the directors, newly amended regulations, and industry characteristics.
      • The report on performance evaluation of the board and its members was approved in the board meeting on March 8, 2024.

    • The Company hires an external institution to perform an external board performance evaluation every three years. The latest was when the Company received an external board performance evaluation report from KPMG on February 18, 2022. KPMG performed evaluation of the board of directors of Wisdom Marine Lines between December 22, 2021 and February 18, 2022. KPMG evaluated the board based on 88 items in nine criteria and the board members based on 27 items in six criteria.
      Board evaluation consists of nine criteria: construction of a functional board, an effective board, professional development and continuing training, business outlook, fulfillment of roles and responsibilities, management of the management team, establishment of corporate culture, stakeholder communication, and performance evaluation.
      Board member evaluation consists of six criteria: mastery of company goals and duties, awareness of director responsibilities, professional development and continuing education, fulfillment of roles and resonsibilities, degree of participation in company operations, and internal relations and communication.
      The evaluation method combines data analysis, questionnaire, and interview, and use the results to issue the performance evaluation report.

    • KPMG concluded that the board of directors of Wisdom Marine Lines had made policies and processes according to the applicable regulations and domestic governance indicators. The board of directors consists of directors with relevant skills and training, and responsibilities are allocated according to experience in order to ensure the board and functional committees work effectively. The overall performance was rated between good and excellent.
      Room for improvement in the board of directors was still identified in some of the nine criteria, such as an effective board, professional development and continuing education, and fulfillment of responsibilities.

    • KPMG made the following recommendations:
      • Although key operations such as business risk management, ethical management, and ESG/CSR fulfillment take place in practice, they are not reported formally to the board of directors. This may lead to external directors being less familiar with these operations.
      • It was found that the company provided information on a director's role and responsibilities whenever a director took office. It should be required to provide directors with information on assuming the role. Given the board of directors consists mainly of independent directors and onsite visits are difficult to arrange for directors of a shipping company, more information on the business should be provided in the director's guide so to help new directors gain more quickly an understanding of the company's operations and industry trends and fulfill their responsibilities.
      • It was understood that the directors held extensive discussions on key business risks, such as the debt ratio and energy saving and carbon reduction trends. According to the Corporate Governance 3.0 - Sustainable Development Roadmap, the design and operation of business risk management is to be supervised by a risk management committee or an audit committee. Wisdom Marine Lines does not have a risk management committee at present, and business risk management must be overseen by the Audit Committee under the risk management framework. In addition to optimizing existing business risk management mechanisms, all aspects and areas of risks should be considered in order to identify key areas to focus on in different stages.
      • The Company plans to follow KPMG' recommendations and make plans for improvement as part of the continuing effort to reinforce the role of the board of directors.

    • The Auditing Office is an independent department directly subordinate to the Board of Directors. Wisdom carry out internal audit to assist the Board of Directors and mangers in inspecting and reviewing defects in the internal control systems as well as measuring operational effectiveness and efficiency, and shall make timely recommendations for improvements to ensure the sustained operating effectiveness of the systems and to provide a basis for review and correction.

    • There is a Chief Auditing Officer and 2 auditors in Auditing office. The appointment, dismissal, evaluation, and compensation of the Company’s internal auditors are performed based on the rules of the “Personnel Recruitment Assignments,” “Appointment and Training Assignments,” “Performance Appraisal Assignments,” and “Application Rules for Resignation.” Their evaluation is performed once every year. The above-mentioned appointment will be submitted to the Audit Committee and the Board of Director for review and approval. Performance Appraisal and compensation actions will be submitted to the Chairman. The above-mentioned rules have been disclosed in the Company’s internal Control of Payroll.

    • Plan and implement the annual audit plan and issue audit report according to the company's Internal Control System and the relevant regulations of the TWSE.
    • Formulate and implement the annual audit plan at the end of each year. Implement it according to the plan after approval by the Board of Directors.
    • Report the audit report to the Audit Committee and the Board of Directors regularly.
    • Track the improvement of internal deficiencies and abnormal matters discovered by internal audit regularly.

    • The Company has implemented the Procedures for Handling Material Nonpublic Information. The procedures require that employees of the Company adhere to the regulations against insider trading. Trading of related securities is prohibited if one is in possession of material nonpublic information.
    • The Company provides a compliance handbook for newly elected directors after they take office and awareness orientation for new employees when they receive training. The latest orientation for new employees took place in March to April 2024. The courses covered confidentiality of material information and the elements of insider trading. The presentations and video files used in the courses were placed on internal discs that can be accessed by all employees so that those who missed the courses would be able to receive the same information. Electronic announcements are made every January to reiterate the rules to the employees. Announcements on "insider trading prevention training" were made on January 03, 2024.