On January 11, 2024, the Financial Supervisory Commission amended the Regulations Governing Procedure for Board of Directors Meetings of Public Companies and the Regulations Governing the Exercise of Powers by Audit Committees of Public Companies in an effort to enhance the completeness of meeting procedures of board for directors meetings of listed companies, ensure the right of participation for independent directors on audit committees, prevent negative impacts on company operations, and strengthen corporate governance. The following is a summary of the amendments:

I. Regarding the Regulations Governing Procedure for Board of Directors Meetings of Public Companies:

（I） Originally, Paragraph 1 of Article 12 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies provided, “When the meeting time is due and one-half all board directors are not present, the meeting chair may announce that the meeting will be postponed.” In practice, disputes often arose when the meeting time was postponed indefinitely. Hence, this amendment expressly provides that when the quorum is not met, the chair may only postpone the meeting to a time “on the same day.”

（II） Considering that during the proceedings of a board meeting, it is common to see the chair being unable to chair the meeting for some reason or failing to declare the closure of a meeting in accordance with the law, this amendment amended Paragraph 4 of Article 13 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies to provide that the provisions of Paragraph 3 of Article 10 shall apply mutatis mutandis to the selection of a deputy to act in place of the chair. That is, under such circumstances, the vice chairperson shall act in place of the chair. If there is no vice chairperson or the vice chairperson is also on leave or for any reason is unable to act, a managing director designated by the chairperson will act. If there is no managing director, a director designated by the chairperson will step in. If the chairperson does not make a designation, the board can elect a managing director or director from among themselves to ensure the board of directors continues to operate and prevent disputes over the legality of the board’s resolutions.

II. Regarding the Regulations Governing the Exercise of Powers by Audit Committees of Public Companies:

（I） An amendment is made to work with Paragraph 4 of Article 14-4 of the Securities and Exchange Act regarding the provision: “When a company brings a lawsuit against a director, and when a director engages in transactions or other legal acts with the company for himself or others, the proceedings shall be carried out by a panel discussion of the audit committee with representatives selected by the audit committee.” The amendment expressly provides that the selection of representatives of the audit committee shall be adopted with the approval of at least one-half of all committee members; the audit committee may resolve for members to individually or jointly represent the company; if representatives are not selected according to the procedure, the entire audit committee shall jointly represent the company to ensure that company operations are not disrupted by the failure to select representatives.

（II） In order to ensure the attendance of audit committee members, meetings should be scheduled at times and places convenient for all independent directors. Moreover, to prevent disruptions to the company’s operations due to the audit committee’s inability to elect the convener or the convener’s unwillingness to convene a meeting, a method for electing a convener has been established. When the convener is on leave or otherwise unable to convene a meeting, the meeting shall be convened by another independent director designated by the convener. If no such designation is made, the meeting will be convened by another independent director elected by and from among the committee members.

（III） To ensure the completeness of the procedures of audit committee meetings, proceedings related to audit committee meetings are expressly provided, including: The meeting shall be conducted in accordance with the agenda and order of items specified in the meeting notice; the chair may not declare the meeting closed without a resolution from the audit committee; if the number of members present is less than half of the committee members, the chair may postpone the meeting to a later time on the same day; if at any time during the meeting, the number of members sitting at the meeting does not reach one-half of the committee members, the chair may suspend the meeting; and if the convener is unable to chair the meeting for any reason or the chair fails to declare the meeting closed in accordance with the law, a method for electing a deputy is provided. These amendments are provided to enhance the completeness of the procedures of audit committee meetings, maintain the operations of audit committees, and strengthen corporate governance.

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