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Corporate Governance

Succession Mechanism for Key Management Positions

According to the “Succession Mechanism for Key Management Positions” approved at the 33rd meeting of the company's 8th Board of Directors on December 18, 2019, the company has established a succession mechanism for key management roles. The purpose of this mechanism is to ensure sustainable operations and growth by building a structured succession plan for key management positions. This enables the transfer of professional knowledge and experience, maintains organizational effectiveness, and ultimately helps achieve business objectives.

Key Management Positions

The company's president, senior vice presidents, and heads of various divisions (or offices) are appointed through internal development or external recruitment, subject to approval by the Board of Directors.

Succession Mechanism and Implementation Stages

The succession process is carried out in five stages: Identification of Key Competencies, Inventory of Current Talent, Development of Successor Talent, Review of Successor Talent, and Approval of Management Personnel. Details are as follows:

Based on the results of the Managerial Proficiency Assessment and the departmental responsibilities defined in the company's organizational regulations, qualifications and criteria are established.

  • Experience and Performance
    1. Compliance with legal requirements or relevant professional managerial experience and qualifications for each functional area.
    2. Performance evaluations.
    3. Professional competencies in areas such as strategic planning, railway operations, research and innovation, business management, finance and accounting, safety management, information systems, legal affairs, and insurance.
    4. Managerial competencies include leadership ability and management style.
    5. Cross-departmental experience.
  • Core Values and Personality Traits
    1. Discipline, Integrity, Efficiency, Innovation, and Sensibility.
    2. Accountability.
  • The Human Resources Management Department compiles the qualifications and competencies of the next-tier management personnel under key management positions. It also assesses their current readiness and generates a list of high-potential candidates for each unit to review, thereby establishing a structured talent pipeline.
  • A talent development execution plan is formulated, focusing on professional and managerial competency training through in-person courses or mentorship by management personnel.
  • Job rotation programs are implemented to foster a company-wide culture of rotation.
  • Deputy division (or office) head positions are established to implement the succession mechanism and enhance decision-making capabilities.

The effectiveness of talent development is periodically reviewed using a structured evaluation form.

When a key management position becomes vacant, candidates are proposed based on business objectives and organizational needs. Upon the Chairman's approval, the appointment is submitted to the Board of Directors for final confirmation.

Implementation Status

To cultivate successor talent for key management positions, the company has conducted the Managerial Proficiency Assessment for all divisions (or offices), departments, and section-level management personnel since 2019. Starting in 2021, the company also established standardized qualification criteria for all divisions (or offices) and department-level management positions, identified potential successor candidates, and assessed their readiness. These efforts aim to:

  1. Accurately identify training needs based on the current overall management capabilities of management personnel.
  2. Plan tiered leadership training and develop a Learning Passport for management personnel, based on evaluation results and the company's mid- to long-term development strategy.
  3. Build a management talent pool and establish a structured talent pipeline.

As of November 30, 2025, the company has completed the Managerial Proficiency Assessment for all 211 divisions (or offices), departments, and section-level management personnel, and defined qualification criteria for 52 divisions (or offices) and department-level management positions. Based on the Learning Passport framework, the company has conducted 49 training sessions focused on communication, supervision, cognitive management skills, and accountability, with a total of 1,235 participants.

In addition, to foster a culture of talent development from the ground up, each unit has implemented a tiered management rotation program since 2021. This initiative promotes a rotation culture, enhances professional and managerial capabilities, and encourages cross-functional thinking, thereby strengthening the company's competitiveness in sustainable operations. To further implement the succession mechanism and enhance decision-making capabilities, the company also established deputy division (or office) head positions starting in 2021, aligned with the dual goals of succession planning and talent development. As of November 30, 2025, 137 management personnel have completed cross-departmental rotations, and potential talents have been assigned to serve as deputy division (or office) head positions for developmental training as needed.

According to the company's “Succession Mechanism for Key Management Positions,” all senior managers must possess the necessary professional skills and experience, and also comply with the company's Code of Ethical Conduct and Integrity Management Guidelines. They are required to undergo training in ethics and integrity, insider trading prevention, confidential information protection, and gender equality in the workplace. Additionally, they participate in various professional competency training programs to cultivate business acumen and embody the company's five core values: Discipline, Integrity, Efficiency, Innovation, and Sensibility.

To strengthen senior managers' decision-making capabilities and broaden their strategic business perspectives, they are also arranged to attend board meetings, participate in regular key management meetings, and lead major business projects.