Chapter 5 Empowering the Supervisors |
| Article 51 |
A bank’s articles incorporation shall stipulate a fair, impartial, and open procedure for the election of supervisors in accordance with the Company Law, and shall adopt the cumulative voting mechanism or other methods set forth in the articles of incorporation sufficient to fully reflect the opinions of the shareholders.
Supervisors of a bank shall comply with the requirements set forth in the “Regulations Governing Qualification Requirements For Responsible Persons of Banks.” |
| Article 52 |
The spouse, relatives by blood within the second degree of relationship or relatives by marriage within the first degree of relationship of supervisors shall not serve as directors or supervisors in the same bank. |
| Article 53 |
The aggregate shareholding percentage of all of the supervisors of a bank shall comply with the laws and regulations. Restrictions on the share transfer of each supervisor and the creation, release, or changes of any pledges over the shares held by each supervisor shall be subject to the relevant laws and regulations, and the relevant information shall be fully disclosed. |
| Article 54 |
A bank may designate an appropriate number of independent supervisors based on the business scale and needs. Shareholders may recommend candidates, who are natural persons that comply with the requirements prescribed by the competent securities authority to be elected in the shareholders’ meeting for it to elect the independent supervisors.
However, a TSE/GTSM listed bank shall proceed in accordance with the regulations governing independent supervisors prescribed by the competent securities authority, the Taiwan Stock Exchange and the GreTai Securities Market.
An independent supervisor is advised to have a domicile within the territory of R.O.C. in order to timely perform the supervisory functions. |
| Article 55 |
When a bank sets forth the number of supervisors in its articles of incorporation, it shall evaluate the appropriate number on an overall basis. Those who serve as supervisors shall have ample professional knowledge and skill, work experiences, and possess an honest, practical, fair, and impartial attitude. |
| Article 56 |
In order to fulfill the functions of a supervisor, the supervisor shall have professional knowledge and be familiar with the relevant laws and regulations, understand the rights, obligations, and duties of directors of the bank and the functions, duties, and operation of each department, and frequently attend meetings of the board of directors to supervise the operations and to state his/her opinions when appropriate so as to control or discover any abnormal situation early on. |
| Article 57 |
A supervisor shall supervise the implementation of the operations of the bank so as to reduce the operational risks of the bank.
Where a director, for himself/herself or on behalf of others, enters into a sale/purchase or loan transaction, or conducts any legal act outside of the banking business with the bank, a supervisor shall act as the representative of the bank. In the event that there is any independent supervisor, to enhance supervision, it is advisable that the independent supervisor shall act as the representative of the bank in the above situation. |
| Article 58 |
A supervisor shall investigate the operational and financial conditions of the bank at any time, and the relevant departments in the bank shall provide the books or documents that will be needed for the supervisor's review.
When reviewing the finance or operations of the bank, a supervisor may retain attorneys or accountants on behalf of the bank to perform the review; however, the bank shall inform the relevant persons of their confidentiality obligations.
The board of directors or managers shall submit reports in accordance with the request of the supervisors and shall not for any reason obstruct, circumvent, or refuse the inspection of the supervisor.
When a supervisor performs his/her duties, a bank shall provide necessary assistance as needed by the supervisor, and the reasonable expenses that the supervisor needs shall be borne by the bank. |
| Article 59 |
For supervisors to timely discover any possible irregular conduct in the bank, a bank shall establish a channel for supervisors to communicate with the employees, shareholders, and stakeholders.
Upon discovering any irregular conduct, a supervisor shall take appropriate measures timely to curb the expansion of the irregular conduct, and file a report to the relevant regulatory authorities or agencies if necessary.
Where any of the independent directors, general managers, officers of finance or accounting, or attesting CPAs resigns or is removed from his/her position, the supervisors shall further investigate the reason thereof.
In the event that a supervisor neglects his/her duties and therefore causes harm to the bank, the supervisor shall be liable to the bank. |
| Article 60 |
When exercising his/her supervisory power, each supervisor of a bank may, after taking into consideration the overall interest of the company and shareholders, periodically or non-periodically convene a meeting to exchange opinions among all the supervisors when he or she feels necessary.
In order to promote deliberative efficiency, when supervisors convene the meeting referred to in the preceding paragraph, the supervisors shall stipulate complete rules for the proceedings of meetings, and shall submit said rules to the shareholders’ meeting. The minutes of each meeting shall be placed in safekeeping permanently. |
| Article 61 |
To empower the supervisory functions of supervisors, supervisors of a bank shall independently exercise their powers. When supervisors exercise their supervisory powers at different times, the relevant departments shall not request consistent inspecting actions or refuse to repeatedly provide data. |
| Article 62 |
A bank shall constitute a liability insurance contract with an insurance company for independent supervisors with respect to their liabilities resulting from exercising their duties. |
| Article 63 |
Supervisors of a bank are advised to participate in training courses of professional knowledge, such as law, finance, or accounting upon becoming supervisors and throughout their terms of occupancy in accordance with the rules of the Taiwan Stock Exchange and the GreTai Securities Market. |
| Article 64 |
A bank shall grant independent supervisors reasonable compensation in consideration for their differences from ordinary supervisors. |