Since its establishment, PharmaEssentia has continuously optimized its corporate governance structure to establish a corporate culture of integrity and accountability. We are committed to establish our own Corporate Governance Roadmap, based on the five action plans in the Corporate Governance Roadmap (2018-2020) set out by the Financial Supervisory Commission (hereinafter referred to as “FSC”) and the Company’s future development directions. Our highly specialized and diverse Board of Directors serves as the Company’s highest governance unit, and an “Audit Committee” and a “Remuneration Committee” are set up under the Board to strengthen supervision and governance. Our governance and management team also achieved excellent results in 2019. The Company was promoted to the second-class range (the top 6%-20%) in the results of the annual Corporate Governance Evaluation System organized by the Taiwan Stock Exchange Corporation along the Taipei Exchange and our annual consolidated revenue reached a record high of NT$ 306 million. While engaging in business operations, the Company also strives to promote a number of management topics such as non-financial information disclosure, hence in 2020 we set up a dedicated Executive Center for Corporate Sustainability to plan and promote cross-departmental sustainability activities, set goals and implement projects. Through the cooperation of the 5 taskforces and interactions among their diverse expertise, we actively respond to the expectations of stakeholders and practice the corporate social responsibility of PharmaEssentia. For the identification and management of operational risks, we have established comprehensive internal control and audit systems in accordance with relevant regulations. When cooperating with partners at all stages of the value chain, PharmaEssentia establishes a corresponding strategic cooperation model with an aim to maintain a long-term relationship of mutual benefit and common prosperity. PharmaEssentia is gradually establishing a legal compliance strategic framework and code of ethics and standards of conduct based on the four strategic building blocks: “Structure and Governance”, “Policies and Practices”, “Operations and Accountability” and “Culture and Education” to protect the privacy and personal security of patients and employees, and eliminate all matters of dishonesty, bribery and corruption. In the future, we will also strengthen the promotion of our Code of Conduct and related education and training and guide the behavior and decision-making of all employees in the Company to comply with ethics and moral standards.
Corporate governance is to PharmaEssentia, as the brain is to the operation of all living mechanisms of the human body. It is the core of the Company’s operations and growth. Since its establishment, PharmaEssentia has upheld integrity and transparent governance to establish mutual trust with all its stakeholders, and to build a fully integrated innovative biopharmaceutical company with specialized management systems. We recognize that only through establishing a solid corporate governance mechanism, then we can effectively manage our operations and provide monitoring mechanisms to incentivize the effective use of resources, the implementation of the responsibilities from business operators, and the protection of benefits from shareholders and other stakeholders, such as employees and patients, among others. We have committed to establish our own Corporate Governance Roadmap, based on the five action plans of the Corporate Governance Roadmap (2018–2020) set out by the FSC and the Company’s future development direction.
The Board of Directors is the Company’s highest governance body and the center for business decision making. The term of office of each Director is 3 years, and there are 11 Directors in this term. The Board meeting is convened at least once every quarter. Managers and financial and accounting Directors are required to attend for consultation, and the audit supervisor shall report the audit status to the Board of Directors.
In 2019, PharmaEssentia convened 8 Board meetings and the actual attendance rate of board of directors was 79% . And in 2020, PharmaEssentia also convened 8 Board meetings and the actual attendance rate of board of directors has raised up to 97.7%.
The Board Member Diversity Policy of the Corporate Governance Code stipulated that the Company shall aim to achieve diversity of the board. The board members of PharmaEssentia have diverse expertise and industry backgrounds, enabling them to provide operating judgment, accounting and analysis, business management, industry knowledge and specialized advice such as international market prospects. The 11 Directors seats include 3 seats for Independent Directors, accounting for 27.2% of the total number of Directors.
The Board of PharmaEssentia has set up an Audit Committee and a Remuneration Committee in accordance with their authorities and functions to assist it in supervising and to strengthen management.
For more information on the list of Directors of the Company’s Board and their operations, please refer to pages 37~43 of the Company’s 2019 annual report in English. Or link to Downloads and Interactions center
The Principles of Ethical Corporate Management formulated by PharmaEssentia follow the provisions of the Ethical Corporate Management Best Practice Principles for TPEx Listed Companies. In order to implement the principles and provisions of the Principles of Ethical Corporate Management, more specific set of regulations will be formulated in the corporate governance dimensions of Anti-corruption, Corporate Social Responsibility, Trade secret and Conflict of interests. And the Company aims to assist the unique characteristics of each subsidiary or department to establish management requirements for each department or business function, in view to formulate the implementation rules of each department or business function.
Compliance with ethical standards
PharmaEssentia is committed to establishing a corporate culture of integrity and accountability. The Company prohibits dishonesty, bribery, corruption, or insider trading. At the same time, it encourages its employees and senior executives to comply with ethical standards and strives to make all stakeholders understand our ethical standards. The Company promotes the precautions related to professional ethics during the training of new employees. All employees are required to follow the six major business conducts and ethics regulations set by the Company. Regarding this, the Company specifically implements the ethical and moral standards that are unique to the pharmaceutical biotechnology industry: the three phases of preclinical studies, clinical trials, and drug marketing.
Specific measures for prohibition against insider trading and material nonpublic information
The company has formulated the rules and regulations of " Operating Procedures for Handling Material Nonpublic Information and Preventing Insider Trading ". The Procedures has been approved by the board of directors, and the relevant specifications have been disclosed on the company's website. Thereby preventing improper information disclosures, ensuring the consistency and accuracy of information released to the public, and strengthening the prevention of insider trading.
Principles of Ethical Corporate Management
The company has formulated the rules and regulations of "Principles of Ethical Corporate anagement" and "Procedures for Ethical Management and Guidelines for Conduct". The Procedures and Guidelines have been approved by the board of directors , and have established channels for stakeholder communication and whistleblowing on the company's website and the intranet to protect the rights and interests of all shareholders.
The company employs external professional lawyers to strengthen the education and training of all colleagues on the integrity management policies that the IPO companies should abide by. The implementation is as follows:
【Reporting of Violating Ethical Corporate Management】
While PharmaEssentia is engaged in business operations, it also focuses on topics related to sustainable management including the “creation of long-term shared value” and “stakeholder engagement.” We take the initiative to fulfill our corporate social responsibility, and actively respond to the expectations of customers and investors, as well as the promotion of the sustainable development of enterprises by domestic authorities. The Company strengthens the supervision of its operation and management through the Board of Directors, and at the same time fully promotes the management of ESG, and effectively utilizes operation strategies through diverse mechanisms. While developing innovative drugs, the Company also promotes the balance of economy, society and environment and sustainable development concepts and strives to implement the founding philosophy of PharmaEssentia: Better science, Better lives. The year 2019 is selected to be the first year of corporate sustainability, and with reference to the domestic TPEx-listed corporate governance promotion indicators, and the international sustainability reporting frameworks formulated by organizations such as GRI, SASB, the UN, and the Access to Medicine Index 2018, the Company has launched a five-year sustainable development implementation plan. We hope that through scheduled progress and improvements, we can maximize the influence of PharmaEssentia on the society and lay the foundation of the Company’s sustainable operation.
In July 2020, the Executive Center for Corporate Sustainability and the five taskforces were officially established under the CEO. The Executive Center for Corporate Sustainability is responsible for planning and promoting cross-departmental and unit-related sustainable development policies, goals, strategies, and sustainable development implementation plans. Each taskforce will implement the strategy, goals, and implementation plans through close cooperation and diverse professional exchanges, education and training, in accordance with the sustainable development plan formulated by the Executive Center for Corporate Sustainability, and regularly report back to the Executive Center for Corporate Sustainability. The Executive Center for Corporate Sustainability carried out its first briefing to the Board of Directors on the business plan of the corporate sustainability project in May 2020 and received the full support from the directors that were present at the meeting. In the future, the Executive Center for Corporate Sustainability will continue to promote all units to implement the tasks of the annual corporate sustainability plan and report the status of project implementation to the Board of Directors on a quarterly basis.
The Audit Committee serves as the supervisory unit for the Company’s existing or potential risk management and control. The managers are responsible to carry out risk identification and corresponding measures in actual operations , and control the risks that may arise from various businesses within an acceptable range, so as to protect the rights of all stakeholders of PharmaEssentia and increase shareholder value. The Company has established appropriate policies, procedures, and internal control systems for risk management in accordance with relevant regulations. Significant financial activities must be reviewed by the board of directors in accordance with relevant regulations and internal control systems. The Company achieves the goal of division of profession functions and mutual supervision through organization establishment, and the audit office conducts regular and occasional inspections and reports to the board of directors. In view of the importance of risk management to the sustainable development of PharmaEssentia, repeatedly discuss and identify the risks of PharmaEssentia. Moreover, the team assess the risk events that may have an impact on business objectives and review the corresponding risk response actions according to the major issues identified in this report and their respective professions. In the future, PharmaEssentia will continue to optimize the risk management mechanism to reduce the impact of risks on the Company.
One of the Company’s philosophies is to give back to the society by creating value along Taiwan’s pharmaceutical biotechnology value chain based on its purpose. Therefore, we firmly believe that every partner in the upstream, mid-stream and down-stream of the industry is a source of power to support the sustainable growth of PharmaEssentia. As different stages of innovative drug development have different technical requirements, the Company can leverage on its strengths to maximize synergy through the cooperation of external partners. Based on expertise and cost considerations, PharmaEssentia has corresponding strategic partners and individual cooperation models at different stages of the value chain. The Company selects the partners according to criteria including the mission objectives of each stage, and the professional qualifications required. In the short run, the Company’s management focus is on the management of suppliers/contractors. In the long run, we will continue to strengthen the interaction with various partners , and work together for the common sustainable value of environmental issues, labor safety and rights, and integrity management. For more information about our partners, please visit our official website.
The stability and quality of raw materials, instruments, and equipment directly affect the product quality of PharmaEssentia and the safety of patients’ medicine use. Therefore, the focus of the Company’s procurement and supplier management is to ensure that the suppliers, their raw materials, and equipment supply meet our quality and delivery requirements, and GMP regulations. And through rigorous procedures, we strictly control the selection, evaluation, and approval of suppliers. When looking for suppliers, we prioritize the cooperation with local Taiwanese suppliers. In 2019, the total number of suppliers of PharmaEssentia was 262, among which, 91.6% are local Taiwanese suppliers, and with a 67% of total procurement transaction amount. In 2019, the Company carried out internal assessment on 99 suppliers, and total of 20 suppliers were audited on-site. All the suppliers have completed the assessment.
We aim to improve the management efficiency of suppliers. Therefore, the purchased materials or services are divided into four categories: strategic materials, critical materials, leverage materials, and general materials based on the risk and purchase amount. Then different management strategies are drawn up according to the market characteristics and product attributes of each type of material or service.
We will not only strengthen the sustainable management of existing suppliers, but also strive to enhance the close cooperation relationship with local suppliers and promote the upgrading of their technical core and management capabilities. According to statistics, the percentage of strategic and critical local high risks suppliers in 2019 were 44% and 83% respectively. Due to the Company’s industrial characteristics, most of the main strategic materials are controlled by international companies, and thus the percentage of such local suppliers is relatively low. We hope that our operational growth in the future can drive the development of Taiwan’s industrial supply chain.
The COVID-19 outbreak in early 2020 has brought an unexpected shock to the world. At the beginning of the pandemic, PharmaEssentia held a response meeting and conducted subsequent follow-up meetings. To ensure the quality of production, the Company conducts risk assessment on suppliers and raw materials and formulates corresponding response measures.
|2019 CSR Report|