Represent

In addition to physically being the tallest building in Taiwan, the TAIPEI 101 has also been pursuing perfection in its operation and management as we expect ourselves to become the highest role model for sustainable governance. As such, we have always upheld the highest standards when it comes to the construction of the Company's environment of governance. We believe that for many of the TAIPEI 101's tenants, the building is acknowledged as an icon of their respective industries. TAIPEI 101's sound corporate governance environment and stringent management standards render the TAIPEI 101 worthy as a business partner that tenants can feel confident, secure, and take pride in. And thus, contents in this chapter will focus on TAIPEI 101's governance framework and mechanisms including its organizational structure, composition and operation of its board of directors while illustrating how we have strengthened the practice of our core philosophies and behavioral guidelines through the construction of corporate cultures that emphasize honesty and integrity. In addition, this section will also cover how TAIPEI 101 has managed to extend its prudent and high standards for management and attitude to its external value chain in order to deepen supplier management, create inclusive and sustainable cooperation relationships so as to fully demonstrate our concern and response to material issues of "Corporate Governance", "Ethical Management", "Legal Compliance" and "Supplier Management" that our stakeholders have stated as being of major importance.

 

2.1 SOUND GOVERNANCE SCHEME

STAKEHOLDERS

In addition to having a well-rounded and sound corporate management scheme in place, TAIPEI 101 professional team of management has continued to inject new vitality into the Company by promoting corporate forward-thinking innovation and reform in order to maintain a solid grasp on opportunities for sustainability.

2.1.1 Corporate Governance Structure

Within the organizational structure of the TAIPEI 101, each department has a clear definition of duties. The Company's structure comprises mainly the Mall Management, the Tower Management, and the Administration Divisions, along with other offices including the Auditing Office, Corporate Branding & Communications Department, and Security Office to carry out supervision and operation of relevant affairs. After minor adjustments to the organizational structure in 2014, given the relative stability of the external environment and gradual acclimatization of internal separation of duties and responsibilities, no major change to TAIPEI 101 organizational structure has been made in 2015.

  • G4-34 (Governance structure and composition)
  • Mall Management Division:Responsible for tenant business solicitation at the shopping mall, contract management, and internal operation, property management, marketing planning, customer services and so forth.
  • Tower Management Division:Responsible for office tower rental and property management, along with observatory operation and management, marketing event planning, souvenir development and so forth.
  • Administration Division:Responsible for administrative affairs covering human resources, general affairs, finances, IT, procurement, legal affairs, and so forth.

The Management – Chairman, President and Various Division Supervisors

Joseph Chou Te-Yu Chairman

Department  Chairman's Office

Gender  Male

Experiences  Phd. In Economics, Virginia Polytechnic Institute and State University Associate Professor, National Chengchi University Department of Public Finance

Chen Shih-Ming President

Department  President's Office

Gender  Female

Experiences  Université de Lausanne, Switzerland Tamkang University Senior Vice President, Mega International Commercial Bank Co., Ltd. Executive VP of Thailand Branch and \VP of Ho Chi Min City Branch, Mega International Commercial Bank Co., Ltd.

Thomas Tai Vice President

Department  Mall Management Division

Gender  Male

Experiences  Tamkang University Pacific SOGO Department Stores Co., Ltd.

Freda Tsai Vice President

Department  Tower Management Division

Gender  Female

Experiences  Department of Architecture, Cornell University Department of Architecture and Graduate School of Urban Design, Harvard University Kingtown & Construction Nanshan Life Insurance Company

Lillian Chu Vice President

Department  Administration Division

Gender  Female

Experiences  Master's Degree in Economics, National Chung Hsing University China Development Financial

 
  • Ratio of male to female members in the management - 2:3
  • Note 1 - During its fourth interim board meeting on March 11, 2015, the 6th term Board of Directors has agreed for Mr. Joseph Chou Te-Yu to serve as the President of TAIPEI 101 starting on March 16, 2015.
  • Note 2 - During the first shareholders interm meeting on December 9, 2015, the Company reelected its Directors and Supervisors of the 7th term Board, and agreed for Mr. Joseph Chou, Proxy of Mega Financial Holding Company, to be the Chairman of TAIPEI 101. The term of office is from December 9, 2015 to December 8, 2018.
  • Note 3 - Ms. Christina Sung served as the Chairman of TAIPEI 101 from December 7, 2012 to December 8, 2015.
  • Note 4 - During its first interim board meeting on December 9, 2015, the 7th term Board of Directors has agreed for Ms. Chen Shih-Ming to be the President of TAIPEI 101, starting from January 5, 2016.
 

Four Categories of Internal Governance Meetings

Under the management's leadership, TAIPEI 101 has convened relevant internal governance meetings according to schedule in 2015 to achieve thorough control of the Company's operation while facilitating internal communication. Relevant internal governance meetings operate based on the following mechanisms:

 

TAIPEI 101 Organization Structure Chart

 

Board of Directors Governance Structure

The Company is a public company. The majority of shares are held by 18 principal shareholders, who are major corporations in their respective industries. We have also established "Procedure of the Board Meeting" and convene shareholders' meetings on a yearly basis and interim shareholders' meetings as needed so that shareholders have the most up-to-date company development information and are able to provide timely recommendations. In 2015, TAIPEI 101 held one shareholders' meeting, which passed important resolutions including: amendment to specific clauses in the Company's bylaws, approving TAIPEI 101's business report, financial statement and surplus distribution for 2014.

Institutional Shareholders and Ratio of Ownership

 

Shareholder Breakdown by Type

The TAIPEI 101's supervisors are appointed in accordance with "Directors and Supervisor Election Procedure" established by the Company. The members of the Board act as the proxy of the major shareholders and the Board comprises 13 Directors and 4 Supervisors, with a term of service lasting for 3 years for directors and supervisors alike. As the company is not publicly listed, it does not have a seat for independent director nor an auditor, nomination, remuneration or other types of functional committees.

Directors are elected by the shareholders and have outstanding contributions and achievements in their respective fields including accounting, finance, building management and so forth. They not only propose recommendations and strategies to help the Company's future development but also oversee and govern the interests of the Company's shareholders.

 
List of Board Members

 

The Company has established its "Procedure of the Board Meeting," which requires the Board to meet once every two months. In 2015, the Board of Directors held a total of 8 board meetings (ad hoc), with the average attendance at 91.18% for the directors.

To facilitate corporate governance, the Company's bylaws have clearly laid out the compensation system for theTAIPEI 101's directors, supervisors, and managers. In addition, new items of supervisor evaluation have been scheduled to be included into relevant CSR performance assessment in 2016.

  • Note 1 - The list of Board of Directors is determined by the reelection of the 7th term Board held during the first sharedholers interim meeting on December 9, 2015.
    The term of office is from December 9, 2015 to December 8, 2018.
Gender Distribution for Members of the Board
Age Distribution for Members of the Board
  • G4-LA12 (Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity)
 

2.1.2 Sustainability Governance

STAKEHOLDERS

In order to accomplish our vision of sustainable development and mission goals, we have established our "Corporate Sustainable Development Team" and the "Corporate Sustainable Development Team Operating Procedure" in order to actively promote improvements in governance, environment, social and information disclosure.

Our Corporate Sustainable Development Team is headed by the President with 24 members, assisted by the highest-ranking supervisors from Administration, Mall Management, and Tower Management serving as the head of three interdepartmental task forces: "Corporate Governance Committee," "Social Relations Committee," and "Environmental Sustainability Committee". In accordance with the "Corporate Sustainable Development Team Operating Procedure," the team convenes meetings on a quarterly basis to keep track and management the progress of ongoing corporate social responsibility tasks to ensure improvement upon specific issues.

Structure and Duty of the Corproate Sustainable Development Team

 

Ever since its initiation in June 2014, the Corporate Sustainability Development Team has been diligently at work and meeting periodically in each quarter. The three division supervisors have been compiling their respective quarterly progress for the Corporate Governance Committee, Social Relations Committee, and the Environmental Sustainability Committee. With the hard work from these committees, the objectives established during the sustainability development meetings in 2014 have been gradually achieved in 2015. The organizational diagram of the Corporate Sustainability Development Team and their key achievements in 2015 are presented below:

  • G4-34 (Governance structure and composition)
 
Corporate Sustainability Development Team Organization
 
Corporate Sustainability Development Team Key Achievements
 

2.2 RESPONSIBLE MANAGEMENT

STAKEHOLDERS

As Taiwan's tallest gateway to the world, the TAIPEI 101 has always been a focus of attention both locally and abroad. Shouldering the mission of maintaining Taiwan's image and reputation, we have placed special emphasis on "Honesty and Integrity." Our principles of ethical management that stress being fair, equal and open have long become an intricate component of our internal culture and delivered positive influence in the value chain. This chapter will cover our principles of ethical management, code of moral conduct, various grievance mechanisms, and our internal audit system.

2.2.1 Ethical Management

Principles of Ethical Management

To fulfill our corporate social responsibilities, we have stayed true to the Company's core value of "Integrity" and conducted relevant operations with an upright and responsible attitude while reporting once every two months to the Board of Directors on the results of internal audit to prevent acts of dishonesty from affecting the Company's reputation or creating additional management risks.

Culture of Ethics and Integrity

Internally, in order to disseminate our philosophy and conduct of ethical management, we have established various code of conduct to strengthen our overall concept of integrity and self-discipline. For members of the Board, we have established "Code of Conduct for Executive Directors" and "Insider Trading Rules" as the principle to govern and avoid conflict of interest for members of the Board while faithfully disclosing information on insider trading. Four our employees, we have officially implemented the "Employee Code of Conduct" last year as the guideline for employees regarding affairs of legal compliance, asset security, avoiding conflict of interest, maintaining moral conduct and fulfilling corporate social responsibilities.

  • G4-56 (Ethics and integrity)
  • G4-SO4 (Communication and training on anti-corruption policies and procedures)
Coverage of the "Employee Code of Conduct"
 

In addition to the aforementioned "Code of Conduct for Executive Directors" and "Employee Code of Conduct", we have established pertinent conduct guidelines for supervisors, procurement personnel and suppliers as summarized below:

Codes of Conduct
 

In addition to the aforementioned policies and regulations, we have also been working on improving compliance to the code of conduct and relevant communication mechanisms, including:

  • In the "Employee Code of Conduct" test, 90.85% of our employees have scored 80 points and above.
  • G4-SO4 (Communication and training on anti-corruption policies and procedures)
 
Grievance Mechanisms

TAIPEI 101 offers comprehensive grievance mechanisms and should any stakeholder discover any instances of violation with the Company's regulations on ethical conduct or issues pertaining labor rights, society, human rights, he/she can report the incidence through various complaint channels. For employees lodging a grievance, the Company will provide full protection for the whistleblower to ensure the quality of investigation while preventing the whistleblower from being subjected to unjust reprisal or treatment. Once lodged, a grievance will be handed over to the highest-ranking supervisor responsible for the matter for immediate actions to be taken. In 2015, TAIPEI 101 had no complaints made on violation of ethical behavior or grievances pertaining to labor rights, society, human rights or environmental protection.

Grievance Channels
  • G4-LA16 (Number of grievances about labor practices filed)
    SO11 (Number of grievances about impacts on society filed)
    HR12 (Number of grievances about human rights impacts filed)
  • G4-EN34 (Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms)
 
Internal Audit System

The TAIPEI 101 has established its "Internal Audit Implementation Guidance" in conjunction with the Auditing Office to assist the Board of Directors and managers to inspect and review flaws in the internal control system while gauging the results and efficacy of its operation to provide suggestions on improvement when appropriate. This would ensure effective operation of the internal control system and serve as the basis for its review and correction.

The Company has established corresponding operating procedures by taking into account the characteristics of specific risks related to particular operations under the premise of ensuring legal compliance. The results of implementation for the aforementioned operations are subjected to routine audit by the Auditing Office in accordance with the auditing plan approved by the Board of Directors. Special audits may be implemented depending on the situation in order for suggestions on improvement to be presented in a timely manner. Results of relevant internal audits shall be reported to the Board of Directors on a quarterly basis. For 2015, the Company had no incidents of significant flaws or oversight. Issues identified for improvements and suggestions shall be tracked by the Auditing Office periodically until the issues in question have been rectified. In addition, the Auditing Office shall take the level of risks for various operations into consideration and establish the audit plan for the following year based on the implementation of various operations and audit results for the current year.

  • G4-14 (Corresponding approach or principle)
  • G4-SO3 (Total number and percentage of operations assessed for risks related to corruption and the significant risks identified)
 

2.2.2 Legal Compliance

STAKEHOLDERS

All departments making revisions/addendums to their internal regulations are required to take pertinent regulations relating to their scope of operation into consideration. In addition, in the event of amendment/annulment to relevant regulation, the related department shall revise their internal regulations to ensure that relevant operations would be carried out in accordance with pertinent regulations. The Legal Affairs Office is responsible for the review of contracts, legal affairs, legal education, IP and regulation/procedure review. In 2015, no incident of "fraud, discrimination at the workplace, sexual harassment, or corruption" has occurred at TAIPEI 101.

Process of Internal Regulation Revision / Addendum for all Departments
Take regulations pertaining to the departments' operations into consideration
 
Check with the Legal Affairs Office and Auditing Office to ensure compliance with pertinent regulations
Contract Review Procedure

Each department shall submit request for the preliminary review of contracts to the Legal Affairs Office by submitting printed document or electronic file of the contract in question. After the request has been accepted, the responsible Legal Affairs personnel shall log the accepted date in the contract system and use Microsoft Word's track change function for the preliminary review. After the preliminary review has been completed, the contract would be reviewed by the responsible Legal Affairs personnel before it is finalized. All responsible units shall apply for the contract stamp in accordance with relevant document application procedures.

  • G4-14 (Corresponding approach or principle)
    G4-SO3 (Total number and percentage of operations assessed for risks related to corruption and the significant risks identified)
    G4-EN29 (Environmental laws)
    SO8 (Significant fines)
    PR9 (Provision and use of products and services)
    PR4 (Regulations and voluntary codes concerning product and service information and labeling)
    PR7 (Regulations and voluntary codes concerning marketing communications)
 
Legal Dissemination and Training
Violations of Regulation in 2015

In an effort to protect customers' rights, the company requires all products sold at the TAIPEI 101 to comply with "Commodity Labeling Act" and "Act Governing Food Safety and Sanitation." All products must display appropriate content labels and warnings and be validated through our internal inspection process before they may be sold at the shopping mall. In 2015, no violations of product label, food safety, and marketing related incidents have occurred.

 

2.2.3 External Participation

STAKEHOLDERS

In October 2015, TAIPEI 101, along with restaurant operator tenants "Diamond Tony's Italian Restaurant," "Shin Yeh" and Taiwan Fairtrade Association signed a four-party "Corporate Fair Trade Product Procurement and Innovative CSR MOU" as a gesture of support for international fairtrade products. Starting from October 26, 2015, the flag of the fair trade city were raised at TAIPEI 101 to show our support for Taipei City as the second fair trade city to be certified by Fairtrade International after Kumamoto City in Japan.

Not only that, as the portal of Taiwan for foreign visitors, the TAIPEI 101 has also striven to participate in renowned international associations listed in the table below:

Associations


  • G4-15 (Sustainable Initiative)
  • G4-16 (Association)
 

2.3 CREATING SUSTAINABLE VALUE CHAIN

STAKEHOLDERS

The upstream of the TAIPEI 101's value chain includes many outsourced vendors, such as the security industry, cleaning service industry, waste transportation industry, environmental hygiene, and pollution prevention industry, horticulture industry, and parking management industry and so forth. We have been working hand in hand with our value chain to provide a clean, safe, and aesthetically pleasing office tower and shopping center to tenants and customers. This section will cover our management policies and evaluation guidelines for suppliers and outsourced vendors.

2.3.1 Value Chain Management

TAIPEI 101 Value Chain

In order to ensure effective procurement, should the amount of annual procurement exceed the company's established threshold or in the event of substantial demand for specific procurement item, we would adopt centralized purchasing and most of the purchased items were related to construction repair, maintenance, cleaning and security. In an effort to assist development of local economies, we have always prioritized local suppliers and outsourced vendors. For 2015, the total amount of local procurement TAIPEI 101 has made came to NT$ NT$865,835,349 (including tax) out of the annual total procurement of NT$915,933,019 (including tax), equivalent to 94.5% of the total procurement. In addition, due to expiring contracts, we have replaced our partners for mall security, parking management and premise hygiene through open bidding.

  • G4-12 (Describe the organization's supply chain)
  • G4-13 (Significant changes regarding the supply chain)
  • G4-EC9 (Proportion of spending on local suppliers)
  • In 2015, our total for local procurement came to 94.5% of our annual procurement total.
 

2.3.2 Suppliers

STAKEHOLDERS

Ever since our initiation, we have always perceived suppliers and outsourced Employees Media vendors to be our most important partners of collaboration. Guided by our management philosophy that emphasizes sustainable development, TAIPEI 101 has therefore continued to improve upon its supply chain management and sustainable procurement guidelines by incorporating "Supplier Code of Conduct" and Supplier Commitment into our "Supplier Social Responsibility Guidelines." On top of that, we have also established our "Supplier Evaluation Management Procedure," which has been subject to revision with newly added terms and clauses on social responsibilities so that we can achieve greater degree of control and management of risks in the supply chain.

Supplier Related Regulations and Measures
  • GG4-EN32 (New suppliers that were screened using environmental criteria)
  • G4-HR10 (New suppliers that were screened using human rights criteria)
  • G4-LA14 (New suppliers that were screened using labor practices criteria)
  • G4-HR5 (Abolition of child labor)
  • G4-HR6 (Reducing any form of forced or compulsory labor by new suppliers)
 

2.3.3 Outsourced Vendor

STAKEHOLDERS

We have adopted similar aspects for the management of outsourced vendors – solicited publicly through tendering. In addition to basic criteria such as company scale and technical capabilities, ISO 9001 international quality certification is also one of our appraisal criteria. On top of that, we also require our outsourcing vendors to comply with regulations pertaining to environment, human rights, labor, health and safety while strictly prohibiting any outsourced vendors from employing child labor, illegal foreign workers or engage in acts of labor discrimination and so forth so as to reduce the risks that might be inflicted on the outsourced vendors themselves and TAIPEI 101.

Vendor Outsourcing Status

Presently, all of our outsourced vendors have complied with our regulations by hiring all office tower and shopping mall security personnel, cleaning personnel, mechanical service technicians, and parking management personnel locally.

No. of Outsourced Vendor Personnel in 2015
  • G4-10 (Report the total number of employees – outsourced vendor)

Outsourced Vendor Training

In order for our partners to grow side-by-side with us to achieve the goals of sustainable development, we request that outsourced vendors are obliged to enhance their employees' working competency. And as such, outsourced vendors shall provide 24 hours of pre-service training for newly hired staff in order for them to understand the working regulations at the TAIPEI 101, as well as the key points of the working environment and safety matters. In addition, in accordance with the requirements of the "Labor and Safety and Health Act," outsourced vendors must inform their staff of the risks related to work and the measures that should be taken.

In 2015, we have expanded the scope of outsourced vendor training to cover retail counters, cleaning, security, horticulture, parking management, and so forth by offering corresponding trainings for staffs of different units in order to deliver the best and consistent service quality for TAIPEI 101's customers and tenants. In 2015, our outsourced vendor employees completed a total of 7,427 hours of training, which was an increase of 75.83% compared to the previous year.

Among these trainings, we have placed special emphasis on security training in order to safeguard the physical safety of all tenants. Each month, all security personnel are required to take a test that involves climbing from 1F to the top floor. In addition, as a reminder for our security personnel to take human rights seriously, they are also required to go through 15 minutes of dissemination on relevant concepts during their daily briefings.

  • G4-LA9 (Average hours of training per year per employee by gender and by employee category)
  • G4-HR7 (Percentage of security personnel trained in the organization's human rights policies or procedures that are relevant to operations)
  • In 2015, our outsourced vendor employees completed a total of 7,427 hours of training, which was an increase of 75.83% compared to the previous year.
 
Office Tower Outsourced Vendor Training (5,147 hours in total)
  • Note 1 - Total Number of Training Hours per Year = No. of Trainees X Frequency X No. of Training per Year
 
Shopping Mall Outsourced Vendor Training (2,140 hours in total)
  • Note 1 - Total Number of Training Hours per Year = No. of Trainees X Frequency X No. of Training per Year
 
Observatory Security Personnel Training (140 hours in total)
  • Note 1 - Total Number of Training Hours per Year = Number of Trainees X Frequency X Number of Training per Year