Governance

Diodes’ approach to sustainability and financial integrity is built on the foundation of an effective corporate governance structure. We integrate transparency and accountability in our corporate governance practices, and incorporate sustainability into our corporate governance objectives. A strong corporate governance framework and associated practices are critical to earning and retaining the trust of our investors and other stakeholders. We are focused on continuous improvement to develop and enhance our control mechanisms to manage risks and maximize financial returns for our stakeholders. As a company with a global footprint operating in a dynamic international marketplace, we believe robust corporate governance fosters sound and responsible decision-making, strengthens accountability, transparency and fairness, and creates long-term sustainable values to our stakeholders.

Our corporate governance framework is guided by a Board of Directors (“Board”) comprised of a majority of independent directors. The stockholders elect the Board to oversee their interest in the long-term health of Diodes’ business and its financial strength. The Board is the ultimate decision-making body of the Company, except with respect to those matters reserved for the stockholders by statute or by our charter. The Board selects the senior management team, which is charged with the conduct of the Company’s business. Having selected the senior management team, the Board acts as an advisor and counselor to senior management and ultimately monitors its performance. The Board provides oversight and counsel to Diodes’ management team and works in collaboration with Diodes’ management team to:

• establish and promote corporate strategies and monitor performance against business objectives,
• promote attention to conducting business in a sustainable, socially, and environmentally responsible manner, and
• foster and strengthen an organizational culture that is grounded in our Core Values – Innovation, Integrity, and Commitment.

Through our corporate governance framework, the Board exercises the authority to drive management accountability, holding the management team accountable for good stewardship of company resources; to review and evaluate our business operations and performance against established business objectives; and to make independent decisions and recommendations that align and serve the interests of our stakeholders. The Board and the various Committees established thereunder also provide oversight to ensure Diodes conducts business in compliance with applicable laws, and the rules of the Securities and Exchange Commission (“SEC”) and NASDAQ.

• Certificate of Incorporation and Bylaws: these documents establish our corporate structure, the rules and procedures by which we operate, and the rights and responsibilities of shareholders, directors, and officers.
• Corporate Governance Guidelines and Related Policies: these documents establish standards of expectations to assist the Board and its committees in discharging their duties.
• Committee Charters: these documents outline the specific responsibilities for the four (4) committees established under our Board.

Sustainability is one of the key focus areas regularly reviewed by our Board of Directors. We have instituted a cross-functional Sustainability Steering Team to address the sustainability related risks and opportunities (please refer to Governance and Oversight for additional details).   The Sustainability Steering Team provides periodic updates to the Board of Directors (6 out of the 7 directors are independent, representing approximately 86%).

• Board's Oversight of Risk Management
  • Robust standing committee structure and board self-evaluation process helps facilitate overall risk oversight
  • Active engagement with the management team to identify and assess risks related to the Company’s strategies and business models
  • Broad industry experience of the directors helps anticipate emerging and interrelated risks and facilitate effective risk control and mitigation mechanisms
  • Access to Company employees and independent advisors to ensure directors can effectively fulfill their duties in an informed manner
• Rigorous Corporate Governance Guidelines and Policies
  • Corporate Governance Guidelines (“CGG”)
  • Stockholder Nominating Procedures
  • Director Selection Criteria and Retirement Age Policy
  • Stock Ownership Policy and Stock Holding Policy
  • Foreign Exchange Risk Management Policy (also referred to as the Hedging Policy)
• Diverse Board Representation
  • Six (6) out of our seven (7) directors are independent directors
  • Gender, racial and ethnic diversity reflected on the board representation
  • Two (2) female directors

• • Broad set of director skills, expertise, and industry backgrounds
  • Zero percent of the board has familial relationships with other directors
  • Limits on director over-boarding
• Performance-Based Executive Compensation
  • Attainment of both Company performance goals and individual objectives
  • Alignment between executive compensation and stockholder interests
  • No special grants were made to executive officers, including CEO, during the last fiscal year 2021.
  • Annual compensation review and stockholder approval
  • Independent Compensation Committee and independent compensation consultant
  • Recoupment of Executive Compensation Policy
• Frequent Dialogues with Investors and Stakeholders
  • Engagement with institutional investors at conferences, roadshows, site visits, and phone conversations
  • Communications channels available to all stockholders via Company Secretary
  • Active stakeholder engagement promotes transparency, accountability, and well-informed decision-making

* CGG refers to the Company’s Corporate Governance Guidelines

The Chairman and Chief Executive Officer are responsible for establishing effective communications with the Company’s stakeholders, i.e., stockholders, customers, company associates, communities, suppliers, creditors, governments, and corporate partners. The Board believes that the stockholders should have the ability to send written communications to the chair of any Committee, or to our independent directors as a group. Communications relating to any topic should be addressed as follows:

The Chairman of the Board will review all relevant communications with the Board. 

Communications are distributed to the Board of Directors, or to any individual director, depending on the facts and circumstances set forth in the communication. In that regard, the Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of the Board of Directors should be excluded, including the following: junk mail and mass mailings; product complaints; product inquiries; new product suggestions; resume and other forms of job inquiries; surveys; and business solicitations or advertisements. In addition, material that is unduly hostile, threatening, illegal, or similarly unsuitable will not be distributed, with the provision that any communication that is not distributed will be made available to any independent director upon request.

Communications that include information better addressed by the complaint hotline supervised by the Audit Committee will be delivered to the hotline.

Interested investors can contact our transfer agent for more information.

Additional information can be found on the Investors page of our corporate website at https://investor.diodes.com/.

Interested stakeholders can sign up for e-mail alerts at https://investor.diodes.com/email-alerts to automatically receive Diodes’ financial and stock information, SEC filings, and news alerts by email.