Ethical governance
CTBC Holding has in place policies to promote director diversity as well as strengthen the professionalism and independence of its directors. We are continuing to strengthen our corporate governance, regulatory compliance, risk management, and information security while integrating fintech to create a secure and fertile business environment. Our performance in corporate governance has been well recognized home and abroad; CTBC Holding, CTBC Bank, and Taiwan Life were awarded Corporate Governance System Assessment CG6013 (2021) certification with the highest rating (Outstanding) from the Taiwan Corporate Governance Association. For more information, please see the corporate governance awards section.
Corporate governance structure
CTBC Holding implements the separation of management and ownership, as part of which the Board of Directors supervises and guides the Company, including its sustainable management efforts. CTBC Holding has six functional committees to assist the Board of Directors in its operations and business decision-making, namely the Audit Committee, Remuneration Committee, Risk Management Committee, Nomination Committee, Ethics and Integrity Committee, and Sustainability Committee. Refer to the corporate governance and the Board system on our Investor Relations website for more information.
Executive remuneration

CTBC Holding and its subsidiaries have formulated the Remuneration Policy for Senior Executives and Managers, which ensures executives' compensation packages are designed with reference to market salary survey data and submitted to the Remuneration Committee and the Board of Directors for approval. Furthermore, the Company regularly evaluates and monitors its overall compensation policy. To ensure that the MBO of executives is closely aligned with the short- and long-term business targets of the Company and the interests of our shareholders, the principle of the manager remuneration policy is to offer competitive fixed pay in addition to variable pay based on the economic profits (EP) of each subsidiary's business units. The allocation ratio is reviewed annually and set based on individual performance. Long-term incentives are granted in the form of restricted stock awards in order to attract and retain the talent needed by the Company, foster employee loyalty, and encourage long-term shareholding by executives. This aligns the interests of employees with those of Company, in turn creating greater value for the Company and shareholders alike. Variable pay generally accounts for a higher percentage of total remuneration than the fixed pay does and put an emphasis on long-term incentives.

Since 2021, with the aim of encouraging senior managers to work together to drive corporate sustainability development further, the Presidents of CTBC Holding and its subsidiaries, as well as their functional heads and other key senior managers related to ESG, have been required to have ESG-related targets account for at least 2% of their performance evaluation objectives. This measure aims to ensure the achievement of ESG goals.

Anti-Money laundering countering terrorist financing
Customer risk management

CTBC Holding's Procedures for Money Laundering, Terrorist Financing and Proliferation Financing Risk Management stipulate that the background, characteristics of occupational and socio-economic activities, and geographical location of customers as well as the organizational structure of non-natural person customers be comprehensively considered in order to identify each customer's ML, TF and PF risks. The procedures also stipulate that customers, or their ultimate beneficial owners, who are current politically exposed persons with foreign governments be considered high-risk customers and that enhanced measures be taken during customer identification or ongoing monitoring including obtaining the approval of senior managers prior to establishing or creating new business relationships with such customers. In addition, business relationships will not be established with individuals, legal persons, or entities that are sanctioned under the Counter-Terrorism Financing Act.

CTBC Bank's Global AML/CFT Policy Statement outlines the customer due diligence (CDD) procedures for ensuring effective risk management.

CTBC Bank customer acceptance process
Risk management
As global political and economic changes can profoundly influence and shape financial trends, CTBC Holding is keenly aware of the importance of effective risk management. As a result, we have established a sound risk management framework and a comprehensive risk management strategy. For day-to-day operations, in addition to complying with relevant regulations of the competent authorities, appropriate risk management procedures are adopted and supplemented by qualitative or quantitative assessment and monitoring. Through full coordination across units, a mechanism consisting of three lines of defense against risk is formed to facilitate the implementation of effective control measures and to achieve the ultimate goal of sustainable and stable operations.