The Board of Directors is the highest governance body and decision maker of Walsin Lihwa to oversee overall operation management. Pursuant to relevant company bylaws, the election of directors of the board shall adopt cumulative voting, and nomination of the candidates of directors of the board shall factor in nominees' professional knowledges, skills, experiences, and genders in addition to board diversity and independence. Directors of the board are elected by the shareholders' meeting after the board's nominee qualification review.

On May 19, 2023, a shareholders' meeting was convened and the 20th term of office of the Board of Directors including independent directors were elected from industry elites as well as accounting and financial professionals in addition to shareholder representatives. The newly elected 11 directors including 4 independent directors have a term of office of 3 years, effective upon being elected, and they shall convene at least once quarterly. For an effective check and balance system, their meetings' resolutions and actions were all reported to the board for discussion, and major bills passed by their meetings were also immediately disclosed on Walsin Lihwa's website to provide real-time and transparent information.

The Ethical Conduct Guidelines for Directors of the Board and Managerial Officers of Walsin Lihwa require strict abidance by recusal for conflicts of interest and anticorruption. Moreover, pursuant to the Board of Directors Meeting Regulations, if a director has a personal interest in any agenda item or his or her personal interest may prejudice the Company's interest, the director may not participate in discussion and voting, and shall recuse himself or herself from the discussion and voting, and also may not exercise voting rights as a proxy for any other director. The name of any director possibly having an interest relationship, essential content of the interest, and status of recusal shall be minuted for the best interest of stakeholders. For relevant information, please refer to III. Corporate Governance Report in the 2023 Annual Report.

Pursuant to the Corporate Governance Best Practice Principles and the Principles for Selection of Board Members and Managerial Officers and Their Ongoing Education and Succession Plans for the board's diverse backgrounds in terms of necessary professional knowledges, experiences, and different genders as well as independence, Walsin Lihwa shall continue inviting qualified candidates to join its board based on company development strategies and as well as internal and external environment changes to strengthen the balance of its board. To realize the vision for corporate governance, Walsin Lihwa's directors of the board come from its management team as well as senior management in relevant industries with different professional backgrounds in accounting, finance, and sales. They can effectively perform board duties to help establish and maintain Walsin Lihwa's vision and value, assist in corporate governance promotion and strengthen management, supervise and assess the management's policy and business plan implementation, take charge of Walsin Lihwa's overall economic, social, and environmental operations from the perspective of stakeholders, and enhance corporate governance quality and corporate value. For further information on the Board of Directors' education backgrounds, terms of office, professional qualifications, and concurrent positions at the Company or other companies as well as board diversity and independence, ESG training and ongoing education arranged for them, please refer to III. Corporate Governance Report in the 2023 Annual Report and the Company website.

To strengthen independence of the board, the Company has 4 independent directors, 36% of the board and higher than at least 3 independent directors as prescribed by law. None of them has any situation as prescribed in paragraph 3 and 4, Article 26-3 of the Securities and Exchange Act. The 4 independent directors help strengthen company management and corporate governance.

Board of Directors/ Board Diversity
Annual Report

To help strengthen board performance, the board of Walsin Lihwa has four function committees, the Audit Committee, Compensation Committee, Sustainable Development Committee, and Nomination Committee, to assist in the board in fulfilling its oversight responsibilities, setting forth and reviewing relevant policies, expediting effective system implementation, strengthening board operations, and reporting the status of implementation of board resolutions to the board on a regular basis.

Walsin Lihwa has a Corporate Governance Officer as required by the Taiwan Stock Exchange. The Corporate Governance Officer is Lo Hueiping, Vice President of Walsin Lihwa, who is responsible for board meeting arrangements, board meeting minuting, assistance in director appointments and continuing education for directors, provision of the necessary information to directors for them to carry out their duties, and assistance in directors' compliance with laws and other matters stipulated in the Articles of Incorporation or contracts to improve corporate governance and strengthen board functions. In 2023, continuing education for each director reached 6 hours pursuant to the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.

For further information on individual function committees, how they are organized, their duties, and how they work, please refer to III. Corporate Governance Report in the 2023 Annual Report and the Company website.

Pursuant to the Company's Regulations Governing Board Performance Evaluation, the Board of Directors shall conduct at least an annual board performance evaluation at the end of every year, and the board performance evaluation shall also be conducted by an external independent professional institution or a panel of external experts and scholars at least once every three years. In 2018 and 2022, Walsin Lihwa commissioned the Taiwan Corporate Governance Association, an independent third party without any business dealing with the Company, to evaluate the board performance. Through the evaluation by the professional organization as well as exchange with and guidance from its panel, Walsin Lihwa is able to benefit from objective and professional evaluation results and recommendations to keep improving its board quality. The 2023 board and function committee performance evaluation results were reported to the board on January 26, 2024. For further information, please refer to the Company website.

Pursuant to Rules for the Remuneration of Directors and Functional Committee Members, the Compensation Committee takes into account the board performance evaluation results and factors in the Company's business strategy, profitability, future development, business environment, the reasonableness of the correlation between directors' performance and the Company's operational performance and future risk exposure, directors' participation in and contribution to the Company's operation to submit a board compensation proposal for approval by the board for the proposal to be carried out. The Board of Directors’ equity will be evaluated to be factored in.

The policy of compensation for President, Vice Presidents and equivalent managerial officers is based on the Company's Regulations for the Evaluation of Managerial Performance and Compensation, taking into account the Company's business strategy, profitability, performance as well as their contribution to the Company and relevant market compensation levels. The Compensation Committee proposes the policy to the board for approval for the policy to take effect. The structure of compensation for managerial officers includes an equity incentive system covering treasury stocks, restricted stocks, shareholding trusts, and employee stock option certificates. The Company has utilized treasury stocks as an incentive to senior executives and increased their shareholdings by providing priority stock subscription rights to them for their subscription to follow-on offerings to strengthen alignment with shareholder interest. Executive performance evaluation has been included into corporate governance and tied in with compensation, and ESG elements will also be included in the future to strengthen the accountability and momentum of sustainability initiatives. The Company's compensation policy has no clawback provision at present but inclusion of the provision will be evaluated in the future.

Committed to the rights and interests of stakeholders, Walsin Lihwa wants to exert a positive ESG influence while pursuing business sustainability and growth. For ongoing improvement of sustainability performance, the Board of Directors approved the establishment of the Sustainable Development Committee and the committee charter. The Sustainable Development Committee is responsible for assisting the board in supervision of ethical management for business integrity, green operation, environmental sustainability, talent management, care for employees, value chain management, and sustainable development policy promotion and implementation to ensure effective sustainable development and strengthen business sustainability

Walsin Lihwa has a three-tier sustainable governance structure. The first tier is the Sustainable Development Committee responsible for supervision and decision-making. An independent director is the committee convener, and Chairman, Vice Chairman, and all independent directors of the board are members on the committee. The second tier is the Sustainability Office led by the Chief Sustainability Officer responsible for offering assistance to sustainable development strategy development. The third tier includes five promotion centers under the committee, which are the Business Integrity Center, Environment, Health, and Safety Center, Green Operation Center, Customer Service and Supplier Managements Center, and Employee Relations and Social Engagement Center for sustainable development strategy and action plan development and implementation

The Chief Sustainability Officer position was established on June 1, 2023 with organization of the Sustainability Office to assist in important strategy development and implementation:

• Identification of the sustainability issues that demand attention to accordingly develop response action plans,
• Management and tracking of various sustainability issues to enable ongoing improvement of sustainability implementation effectiveness,
• Assistance to individual promotion centers to ensure effective liaison, coordination, and operations integration,
• Committee meeting arrangements with action plans and implantation result reports provided to the committee, and
• Annual sustainability report structure development and compilation.