TSMC Strengthens Board of Directors Functions to Enhance Corporate Governance and Competitiveness

TSMC advocates and acts upon the principles of operational transparency and respect for shareholder rights. We believe that the basis for successful corporate governance is a sound and effective Board of Directors. In line with this principle, TSMC's Board of Directors set up the "Audit Committee" and the "Compensation Committee" in 2002 and 2003 respectively. In order to make our corporate governance more comprehensive, the TSMC Board took a step further in February 2023 to expand and strengthen the functions and responsibilities of its committees, including renaming the “Audit Committee” to the “Audit and Risk Committee”, and the renaming the “Compensation Committee” to the “Compensation and People Development Committee”. It also established a “Nominating, Corporate Governance and Sustainability Committee” of the Board of Directors. Each Committee supports the Board to fulfill its responsibilities, and regularly reports to the Board on its activities and recommendations.

Strengthening Good Corporate Governance and Demonstrating Corporate Value

TSMC envisions the membership of its esteemed Board of Directors to be composed of highly ethical professionals with the necessary knowledge, experience as world-class business leaders, and understanding from diverse backgrounds. Currently TSMC’s Board of Directors consists of 10 distinguished members, and six of them are Independent Directors. Inheriting the spirit of TSMC’s Founder Dr. Morris Chang’s philosophy on corporate governance, and under the leadership of Chairman Dr. Mark Liu and CEO & Vice Chairman Dr. C.C. Wei, TSMC’s Board of Directors takes a serious and forthright approach to its duties and is a dedicated, competent and independent Board.

The Audit and Risk Committee assists the Board in fulfilling its oversight of the quality and integrity of the accounting, auditing, reporting, and financial control practices of the Company, and at the same time strengthens its oversight responsibility for the risk management structure. The Compensation and People Development Committee assists the Board in discharging its responsibilities related to the Company's compensation and benefits policies, plans and programs, and in the evaluation and compensation of TSMC’s Directors of the Board and executives, and also expands its responsibility to review the Company's succession plan for senior executives.

In addition, in order to strengthen the selection mechanism for directors, build diversified and professional board, and reference international practices, TSMC's Board of Directors approved the establishment of the "Nominating, Corporate Governance and Sustainability Committee". In addition to recommending independent director candidates to the Board and other functions, the Committee regularly reviews TSMC's corporate governance and sustainable development policies for improving the corporate governance structure and laying the foundation for sustainable development.

TSMC Corporate Governance Structure

As the world's leading pure-play foundry, TSMC adheres to the core values of integrity, commitment, innovation and customer trust (ICIC). The Company not only focuses on its core business to provide a platform for unleashing innovation to the world, but also actively dedicates itself to ESG development. The Company also pays close attention to international trends of corporate governance, protecting the rights and interests of all stakeholders, moving towards comprehensive sustainable management, and demonstrating corporate value.