Corporate Social Responsibility

Corporate Social Responsibility Overview

A Letter from the Chairman

In 2018, on the 21st anniversary of its founding, Novatek Microelectronics not only continued to maintain its leadership position with the largest market share of large-size panel driver IC sales globally, but also unreservedly seized the opportunity to launch mobile tough and display driver integration single-chips (TDDI), driving the creation of annual revenue to a historical peak of NT$54.834 billion, a 16.5% increase over the previous year. Led by a product portfolio optimization, the Company's gross profit margin set a new high of 31.03% since the listing, which was a significant increase of 2.2 percentage points over the previous year, while net profits after tax reached NT$6.391 billion, a very substantial annual growth rate of 27.2% compared with the previous year, with after-tax earnings per share of NT$10.50. Novatek Microelectronics aims to become the best partner for customers in the field of smart imaging and display technology. We attach great importance to recruiting and cultivating key R & D expertise, enhancing our patent distribution, and planned investment in the development of forward-looking technology. In 2018, the Company invested NT$7.741 billion in research and development expenses, accounting for 14.1% of revenue, up 19.8% from the previous year.

 

Novatek attaches great importance to sustainable development and corporate social responsibility. Through the Novatek Education Foundation, we provide long-term scholarships to outstanding students, support physical training and sports development, and sponsor outstanding sports talent to participate in international competitions, winning honor for the country. In 2018, we were honored to receive the positive affirmation of the 'Long-term Sponsorship Award of the Sports Promoter Awards, given by the Ministry of Education's Sport Administration. In addition, Novatek also encourages Company employees to invest their efforts in volunteer services, which have included accompanying visually-impaired students to carry out local away-from-home studies and foodstuff exploration education activities, caring for and guiding disadvantaged students in remote rural regions by carrying out on-site observational learning in human science education, as well as career exploration, farming experiences and many other such activities, We were also selected as the MoE Youth Development Agency's '2018 Youth Volunteer Service Excellence Group'. We hope that these efforts on our part will serve as a modest spur to evoke the community's increased concern for the education of the disadvantaged. In terms of corporate social responsibility information disclosure, we have continued to improve the quality of reporting and were awarded the Corporate Sustainability Report Award - Electronic Information Manufacturing Group' Gold Award of the 2018 Taiwan Corporate Sustainability Awards (TCSA).

 

 

Novatek still continued with a steady pace to implement the five major aspects of its corporate social responsibility of the previous year, namely, 'Corporate Governance', 'Mutual Benefits of Partners', 'Environmental Sustainability', 'Friendly Workplace', and 'Social Care'.

 

Corporate Governance

Corporate governance is the cornerstone of sustainable development, and Novatek is well aware of its indispensability and importance. Our Company does not only adhere to the principle of focusing on our business and honest management, we also operate in full compliance with relevant government laws and regulations, and take shareholders' rights as our priority. Our continuous inclusion in the Taiwan Stock Exchange's Corporate Governance 100 Index' for constituent stocks and the top 20% of companies for corporate governance appraisal are positive affirmations of the Company's corporate governance. Novatek's management team consists entirely of professional managers, who do not focus only on short-term business performance, but rather actively seek the sustainable development of the Company. In addition, we have instilled an awareness of corporate ethics in all our employees through the establishment of a 'Code of Honest Business Operations' and a 'Guidelines for Honest Business Practices and Procedures', thereby establishing and implementing corporate governance mechanisms from top to bottom, which will enable Novatek to develop in a long-term and stable manner. This is our commitment to all our stakeholders.

 

Mutual Benefits of Partners

Teamwork, and wholeheartedly working in the interests of our customers constitute the Novatek business philosophy. Novatek and its suppliers are always looking for better and more consummate technology and methods, striving to meet customer needs and expectations. With respect to our customers, Novatek has always 5 regarded them as strategic partners. Through the establishment of customer contact and feedback mechanisms and our orientation towards customer demand, we create the greatest benefit for each other. As for our suppliers, Novatek also requires that all reasonable efforts be made in their business operations to cooperate with the relevant policies of Novatek, allowing us to create a sustainable and survivable environment together, while safeguarding the rights of workers.

 

Environmental Sustainability

As an important member of the global semiconductor product supply chain, Novatek has a duty to assume responsibility for environmental sustainability. Through the formulation of environmental health and safety policies, operational activities which affect the environment, health and safety must be in compliance with legal requirements, minimizing their negative impact on the environment, and they must have increased resource recycling as their aim. In addition, to meet with international environmental laws and regulations and customer requirements for environmental protection, Novatek has also constructed and established a green product management system which has received the recognition of major international companies. In the future, Novatek's keystone goal of sustainable development will include continuing to strive for the refinement of product design, and bringing out more energy-saving products with low loads on the environment, thereby making a contribution to the sustainable development of the environment.

 

Friendly Workplace

Talent is not only an asset of a company, but also the foundation for its sustainable development. What Novatek has depended upon to be able to attain the achievements it has today, are high-quality human resources. The importance Novatek attaches to professional expertise is fully reflected in the workplace environment and conditions provided by the Company. Being repeatedly selected for the 'Taiwan High Compensation 100 Index' for constituent stocks published by the Taiwan Stock Exchange illustrates the competitive remuneration conditions we provide. In addition to attracting and retaining professional expertise with high-level remuneration and benefits, we also place exceptional emphasis on the physical and mental health and the personal growth of our employees. We do this in the hope and expectation that professional talent will continue to develop within the Company. Apart from that, harmonious industrial relations are also beneficial to the Company's long-term stable development. The diverse communication mechanisms that exist within Novatek allow our employees' opinions to be heard, and the relevant authority to quickly respond to those opinions, thereby constructing an excellent barrier-free communication culture and an open and enlightened working atmosphere.

 

Social Care

Companies must use their social status and the power they have to actively invest in and give back to society. Novatek has chosen education and care for the disadvantaged as the channel through which to do this, because we believe that only through education can thoroughgoing change be brought to individuals and to society, and unlimited possibilities be created. In addition to contributing with the establishment of the Novatek Education Foundation, Novatek combines Company resources with the voluntary will of our employees to enthusiastically invest in the cultivation of technological talent, education of the disadvantaged in remote rural communities and the sponsorship of social charity. We hope that through these efforts on our part, we will provide more resources for the socially disadvantaged and for children in remote rural regions and in turn create more hope.

 

Heavy responsibilities come with the operation of an enterprise and the road to be traveled is a long one. In the realm of corporate social responsibility, Novatek has in the past always done more and said less. We hope that this report will be able to briefly summarize our efforts and expenditures over the past year, and also symbolize the importance that Novatek attaches to being a corporate citizen. In the foreseeable future, Novatek will still continue to throw its energies into greater efforts and resources, implement corporate social responsibility, and allow the Company's existence and development to bring greater value to all our stakeholders and to society at large.

 

 

 

Chairman of Novatek

 

 

 

 

Novatek Corporate Social Responsibility Committee

 

With the progress of society, the objectives and responsibilities pursued by enterprises are no longer limited to the simple level of economic interests, but rather are multi-oriented. In the pursuit of economic interests, we should also consider the negative impact of conventional economic activities on society and the environment. Novatek has made corporate social responsibility the focus of the five major facets of its corporate governance, the shared prosperity of partnerships, environmental sustainability, friendly workplace and social care, with the intention of to fulfilling our corporate social responsibilities and meet the expectations of our stakeholders with a more systematic and methodical approach.

CSR組織圖

Novatek set up the "Novatek Corporate Social Responsibility Committee" in April 2016 to ensure the implementation of corporate social responsibility, and the vice president and company spokesperson David Chen was assigned by the president as chairman of the committee. There are five work groups in this committee, including operation governance, social feedback, environmental sustainability, employee care, and partnership, which are responsible for determining the objectives of corporate sustainable development, regularly reporting to the Board of Directors, composing the "Report on Novatek Corporate Social Responsibility", and ensuring that all identified major considerations are covered in order to implement the social responsibility policies.

 

In the foreseeable future, Novatek will continue to invest more effort and resources in the fulfillment of its corporate social responsibilities, so that the existence and development of Novatek will bring greater value to all its stakeholders and to society in general.

 

 

Novatek's Corresponding Results in 2018 and the Company's Short and Medium-to-Long-term Objectives

  2018's Objectives 2018's Achievements Short-term Objectives (2019) Medium- and Longterm Objectives
Corporate Governance
  • Corporate governance evaluation results ranking us in the top 20% of listed
    companies
  • Board of Directors attendance rate of more than 80%
  • Return on equity of >15%
  • Improving the disclosure content in the Corporate Governance page of the Company's official website
  • Corporate governance evaluation results ranking us in the top 20% of listed companies
  • Board of Directors attendance rate of more than 80%
  • 2018 Return on equity of 21.7%
  • The disclosure content in the Corporate Governance page of the Company's official website has improved
  • Corporate governance evaluation results ranking us in the top 20% of listed companies
  • Board of Directors attendance rate of more than 80%
  • Return on equity of >20%
  • Reinforce advocacy of concepts of integrity and regulatory compliance
  • Dynamically participating in corporate governance evaluations and full information disclosure
  • Enhancing the Board of Directors' functionality ensuring shareholders' rights and benefits
  • Adherance to core values of integrity, implementation of regulatory compliance and risk control and management mechanisms
Mutual Benefits of Partners
  • Aim for customer satisfaction of 89%
  • Have 100% of our suppliers sign the 'Novatek Sustainability Policy Statement'
  • Ensure 100% of raw material purchases come from refineries recognized by the Global Sustainability Initiative
  • Have 100% of suppliers achieve ISO 9001 certification
  • Complete 78% of supplier on-site audits
  • Customer satisfaction reached 87%
  • 100% of our suppliers sign the 'Novatek Sustainability Policy Statement'
  • 100% non-use of conflict minerals
  • 100% of suppliers have achieved ISO 9001 certification
  • Completed 76% of supplier on-site audits
  • Aim for customer satisfaction of 90%
  • Have 100% of our suppliers sign the 'Novatek Sustainability Policy Statement'
  • Ensure 100% of raw material purchases come from refineries recognized by the Global Sustainability Initiative
  • Have 100% of suppliers achieve ISO 9001 certification
  • Complete 80% of supplier on-site audits
  • Degree of customer satisfaction continues to rise
  • Continuing to focus on and respond to issues of international sustainable development
  • Maintaining 100% use of raw materials from qualified foundries
  • Carrying out source material management and implementing source management
Environmental Sustainability
  • 100% of raw materials are RoHS compliant
  • 100% of our raw materials meet halogen-free requirements
  • 100% of our finished products meet REACH requirements
  • Annual per capita electricity consumption of <680KWH
  • 100% of raw materials are RoHS compliant
  • 100% of our raw materials meet halogen-free requirements
  • 100% of our finished products meet REACH requirements
  • Annual per capita electricity consumption of 794KWH
  • Greenhouse gas reduction program reduced greenhouse gas emissions by 67,244.52 kg; CO2e/ year
  • 100% of raw materials are RoHS compliant
  • 100% of our raw materials meet halogen-free requirements
  • 100% of our finished products meet REACH requirements
  • ISO14001 Management System Certificate expires in 2019, and a three year certification renewal is being carried out to obtain certification and maintain management
    system efficacy.
  • Continue to pay attention to international environmental issues
  • Continue to verify customers' environmental demands
  • 100% of raw materials are RoHS compliant
  • 100% of our raw materials meet halogen-free requirements
  • 100% of our finished products meet REACH requirements
  • Promote energyconservation measures, saving 5% in the years from 2019 to 2023 (1%
    annual electricity saving)
Friendly Workplace
  • Over 9,000 participants have been arranged for education and training, and more than 38,000 hours of training will be taught
  • Utilization of each employee communication and feedback channel will reach 100%
  • Establishment of major abnormality tracing and review rate of ≧ 90%
  • Participation rate of ≧ 45% for employee welfare and health
    promotion activities
  • The stock exchange announced 7th place in the 2017 'average employee salary expenses' for listed companies in Taiwan
  • Communication feedback rate for all types of employees was 100%
  • More than 9,200 instances of education and training were arranged and over 38,650 hours of training were taken
  • To provide a competitive remuneration and welfare system and a comfortable and safe working environment
  • Communication feedback rate for all types of employees reaching 100%
  • Implementing various types of training course plans to help develop employees' progress and growth. More than 9,300 instances of education and training have been arranged and over 38,800 hours of training will be takenComplete 80% of supplier on-site audits
  • Ensuring that employees have long-term and stable careers
  • Establishing harmonious industrial relations and improving channels of communication
  • Cultivating high-tech talent development and building key technical capabilities
Social Care
  • Promotion of industryacademia internships and technology talent cultivation award programs, spending in excess of NT$6 million for the year.
  • Promotion of 13 elementary school reading programs in Yunlin and Hualien, and quality book gifts
  • Long-term sponsorship of professional sports talent in archery and weightlifting, spending in excess of NT$2 million per year
  • Volunteer service activities targeting disadvantaged students, with more than 1,800 hours of volunteer service hours per year in 16 sessions.
  • ≧ 28% of employees responding to calls for donations or donations for the year, totaling NT$7 million
  • A public interest project implementation rate of ≧ 75%
  • Awards assisted 36 Doctorate and Master's degree students with a total amount of more than NT$4.4 million, and we continued to cooperate with the four schools of National Taiwan University, Tsing Hua University, Chiao Tung University, and Cheng Kung University to promote various industry-academia cooperation projects.
  • We participated in reading promotion programs in Yunlin and Hualien for a total of 15 schools, with 16,426 instances of children taking part
  • We sponsored professional sports talent in archery and weightlifting, spending in excess of NT$3.36 million for the year. We received the positive recognition of the '2018 Sports Promoter Awards - Longterm Promoter' award, given by the Sports Administration of the Ministry of Education
  • We carried out 16 sessions of education volunteer services for disadvantaged students, amounting to in excess of 1,400 service hours. We received the positive recognition of the '2018 Youth Promotion Excellent Volunteer Service Group' award, given by the Youth Development Administration of the Ministry of Education
  • 28% of employees responded to calls for donations or annual donations totaled NT$6.36 million
  • There was an annual public welfare project implementation rate of 93.7%
  • To promote industryacademia internships and technology talent cultivation award programs, promoting 20 cases of industryacademia cooperation, with awards in excess of NT$4.5 million per year.
  • To continue promoting reading programs and quality book gifts at 13 elementary schools in remote rural regions of Yunlin and Hualien
  • To continue sponsoring outstandingly talented individuals and teams in various sports such as archery and weightlifting, providing sponsorship in excess of NT$2.2 million for the whole year
  • To implement various sponsorship programs for those disadvantaged in education, and regularly urge corporate volunteers to volunteer their services, with a target of 16 sessions for the year.
  • To have 28% of employees respond to calls for donations or have annual donations totaling NT$6.36 million
  • To achieve an annual public welfare project implementation rate of 93.7%
  • To make themed and fixed donations with a ratio of 5 to 5
  • To continue to sponsor and promote the development of science education, to cultivate outstanding professional technological expertise, and to raise the willingness of outstandingly talented people to enroll in Doctorate degree
    programs, in order to encourage outstanding Doctorate and Master's degree students to concentrate on academic research and technological innovation.
  • To cultivate an interest in reading among students in remote rural areas, to provide impetus and pass down reading and selflearning skills, thereby raising overall learning
    abilities
  • Long-term cultivation of outstanding talent in sports, connecting with their professional sports programs to continue training and development to win glory for the country, and promote sports
  • To support and assist the cultivation of grassroots students disadvantaged in education, and reduce the educational resources gap in rural areas through volunteers' care and learning
  • To continue carrying out annual charity sustainability fundraising
  • To proactively contact and visit social welfare organizations / groups
  • To strive to maintain a project implementation rate ≧ 80% for the year
  • To make themed and fixed donations with a ratio of 5 to 5

2016 CSR Report 2017 CSR Report2018 CSR Report