The board members of First Financial Holding are re-elected every 3 years through a "candidate nomination system". The qualifications of all candidates for directors and independent directors is reviewed by the board before they are elected from a list of candidates at the shareholders' meeting, thereby ensuring that the nomination and selection procedures of directors is open and transparent.

Additionally, the Company has established targets for the board meeting attendance of all directors to exceed an average of over 85%; the actual attendance of independent directors must exceed 80%. In 2023, 13 board of directors meetings were convened with an average attendance rate of 97.81% for all directors (99.45% when including attendance by proxy) and more than 80% for all independent directors, thereby fulfilling their supervisory duties.

After analysis of the Company's development of operations in the future, a diversity policy must be implemented to address the Group's emerging risks. The Company's directors possess industry and professional knowledge in banking, insurance, securities and laws, accounting, finance, tax affairs, technology, or risk management. Generally speaking, directors are capable in operations, management, leadership, accounting, financial analysis, crisis management, and decision-making as well as possessing plenty of knowledge in global market perspectives, industries, and risk management.

The Company's 7th-term board of directors is composed of 10 directors and 5 independent directors. Currently, including the Chairman and President, there are a total of 8 female directors who make up 53% of all directors.

"First Financial Holding Corporate Governance Best Practice Principles" clearly states that independent directors may not serve more than 3 consecutive terms in order to facilitate their objective use of authority and to prevent a reduction of their independence due to prolonged tenure; currently, all 5 independent directors have not served for more than 3 consecutive terms. Separate individuals, who are neither spouses or first-degree relatives, have been appointed as Chairman and President; furthermore, there are no instances of spouses or second-degree relatives between the directors.

"First Financial Holding Rules and Responsibilities of Independent Directors" provides clear terms stating "if independent directors have objections or reservations, they must be clearly documented in the board of directors meeting minutes", and "the Company may not obstruct, refuse, or avoid the execution of the independent director's duties. If an independent director finds it necessary when conducting duties, they may request the board of directors to assign personnel or independently hire a specialist for assistance, or request an internal audit to conduct special investigations or follow-up after the fact" to establish sound governance and system of independent directors, thereby allowing directors to express their function for the board and company operations.

Additionally, the Company's board of directors rules of procedure, the organizational rules of various functional (audit, remuneration, and integrity) committees, and managerial code of conduct include stipulations for directors or committee members to recuse from the discussion and voting of agenda matters in which individuals have personal interests or that which may harm the Company's interests.

In 2016, the Company established the "Performance Evaluation Method for the Board of Directors" to conduct annual internal performance evaluations for the board of directors. At minimum, a performance evaluation should be conducted by an external professional and independent institution or team of expert scholars once every 3 years.

The average score of board/directors evaluation was 4.75 (Full score is 5) in 2023 with an "Excellent" grade. Functional Committees achieved an average score of 4.98 (Audit, Remuneration and Ethical Management Committees each scored 4.98, 5, 4.95) with an "Excellent" grade as well. The above result was submitted to the 32nd meeting of the 7th Board of Directors on January 24, 2024.

FFHC appointed EY Business Advisory Services Inc. (hereinafter referred to as the external consultant) in 2023 to conduct external performance appraisal on the Board of Directors and each functional committee. Based on response to the Board & Directors Performance Evaluation Questionnaire, document reviews and on-site interviews, the external consultant, utilizing their methodology, concluded that the overall achievement percentile of three major aspects of the Company (including the board composition, board members, and process/information) is “top performance”. The result indicates that the operations of FFHC's board and functional committees are beyond current regulatory standards and can be regarded as the industry benchmark.

In January 2024, our external consultants produced the 2023 "Assessment Report on the Board of Directors' Performance", which was submitted to the 32nd meeting of the Company's seventh Board of Directors for reference on January 24, 2024.

In order to improve the professional knowledge, capabilities, and decision making ability of directors, the Company's 2023 training roadmap for directors scheduled a total of 118.5 hours* in core courses and professional programs.

PricewaterhouseCoopers (PwC), a professional consultancy company, indicated in its "Global Economic Crime and Fraud Survey 2022" that cybercrime (42%) was the most frequent economic crime encountered by companies. In addition, FinTech is changing the financial service industry, and has become an emerging tool for fast money laundering, as the patterns of money laundering have become more diverse and harder to detect. To help Directors understand the history and trends of cyber fraud and money laundering developments as well as the dangers confronting banks and their response measures, we conducted the "Money Laundering Risks Associated with Emerging Technologies" educational training course in 2023, with eight Directors in attendance.

In order to establish sound supervisory functions and reinforce management, the Company's board of directors began in 2011 by establishing the specialized functional committees composed of independent directors such as the "Remuneration Committee", "Audit Committee", and "Ethical Management Committee". Each committee is authorized under their organizational rules to reinforce the board of director's supervision of finances, remuneration systems, and ethical management.