Corporate Governance - Hon Hai Technology Group

Overview

Hon Hai Technology Group (Foxconn) has set a corporate governance code of practice, for the protection of shareholders’ rights, to strengthen the functions of the Board of Directors, respect the interests of stakeholders, enhance the transparency of information and relevant rules, and strives to establish effective corporate governance frameworks:

Execution Principles

Foxconn attaches great importance to corporate governance and handles it in accordance with the following principles, with a view to implementing corporate governance in the mode of the highest international standards:

Timely disclosure of important material information.

A healthy balance and interaction between management and the Board of Directors.

Maintain a certain ratio of Independent Director representation.

Establish Audit Committee, and ensure the independence of the committee (Articles of Incorporation amended on the 2015 AGM to establish Audit Committee)

Establish Remuneration Committee to strengthen corporate governance and maintain healthy policies regarding director and management compensation.

Specific and clear dividend policies.

Pass shareholder meetings on a one agenda by one agenda basis, and incorporate electronic voting to uphold shareholder rights.

Adhere to Company governance guidelines, uphold the principle of management integrity, and implement internal audit controls.

Corporate Governance Implementation

Two committees are formed under Foxconn's corporate governance framework, the Audit Committee and Remuneration Committee.

Remuneration Committee
Foxconn formed the Remuneration Committee on September 2011, in order to fulfill on Foxconn's core governance values, and adhering to the "Company's Remuneration Committee Charter". The main functions of the committee is as follows:

(一)

Set and routinely review the performance and remuneration, policies, standards and structures of directors and management.

(二)

Routinely review and set the remuneration of directors and management.

Audit Committee
Foxconn formed the Audit Committee on June, 2016, replacing supervisors. The Audit Committee adheres to the Company's "Audit Committee Charter" in order the fulfil the core Company's governance values. The main functions of the committee are as follows:

(一)

Fair presentation of the financial reports of the Company.

(二)

The hiring (and dismissal), independence, and performance of certificated public accountants of the Company.

(三)

The effective implementation of the internal control system of the Company.

(四)

Compliance with relevant laws and regulations by the Company.

(五)

Management of the existing or potential risks of the Company.

Scope of Operation and Implementation of the Corporate Governance, Corporate Social Responsibility and Corporate Integrity Unit

Corporate Governance
Foxconn has assigned dedicated personnel in charge of corporate governance related activities, including: Providing necessary information to the Board of Directors to act upon; attending to board meetings and related issues; execution of Company registrations and/or amendments; creation of board meeting and shareholder meeting minutes and records.

Corporate Social Responsibility
In 2007, Foxconn set up the FGSC Committee. The Committee chairman is a vice president. Given its importance to the Company, we set up three groups which are headed by three executive managers, who serve as vice chairmen of the committee. The director-general is in charge of the daily operation of the Committee. We currently have 6 full-time officers in charge of CSR promotion and supervision of specific affairs. Each Business Group of Foxconn has set up a CSR branch; there are more than 400 part-time officers in charge of the CSR affairs of the Business Groups. At the end of each year is an annual CSR meeting to formulate CSR work plans and goals for the coming year. After being approved by the Director General to start promoting, regular internal audits of each plant’s annual CSR are carried out, to ensure that the plants are in line with the relevant CSR policies of the Company. Each Business Group also periodically reviews the operation of branch performance and reports to the Committee with issues concerning stakeholders for the year. Then the relevant written materials are compiled to produce an annual CSR report, which is submitted to the CSR chairman and Board of Directors.

Corporate Integrity
Foxconn has set up a dedicated Corporate Integrity unit through the Safety Department. In order to advocate for honesty and investigate corruption matters, reporting to the Board of Directors regularly.

Information Disclosure Framework

Foxconn has established extensive information disclosure frameworks, ensuring shareholders receive timely and correct information from the Company. The disclosure in principle is to be fair, transparent, and provide information regarding operations, finance, board agendas, and management tenets policies.