Human Capital Development

To meet the demands of rapidly changing inancial markets and internal operating and development

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strategies, we systematically cultivate the professional competencies of our employees and create a diversiied learning environment, creating human capital value. Highlights: nearly 40% of management trainees have assumed managerial positions; the management associate (MA) program has a retention rate of nearly 60%; more than 600 internal instructors have been developed; and the amount spent in 2016 on subsidies for employees to continue their education and get a degree rose nearly 60% year-on-year.

and inject new thinking and vitality. At the same time, solving society’s skills gap (the gap between what students learn and what companies need) is part of our social responsibility. With that in mind, the Company leverages the Group’s extensive resources to develop opportunities for cooperation between the private sector and academia that prepare students for the job market. Every year, Fubon Financial Holdings plans internship programs based on the needs of participating schools that give students practical instruction and workplace experience, in effect narrowing the skills gap and making it easier for students to adapt to the professional world.

This approach has carried over to inancial technology to address the global trend toward digitization and the Financial Supervisory Commission’s gradual deregulation of digital applications in the inancial sector.

Fubon Financial Holdings set up a “Fintech Ofice” to bring together the Group’s telecommunications, e-commerce and internet technology talent and its digital capabilities in the hope of establishing Fubon as a digital benchmark. In 2016, the initiative was expanded to industry-academia cooperation by working with Fintech-related university departments to plan related courses, which we hope can expand and deepen the Fintech talent cultivation network.

Systematically Developing Employee Competencies

In 2016, Fubon Financial Holdings held 999 classes for employees that earned an average satisfaction rating of 4.6 (with 5 the highest). Employees averaged 50.2 hours of training during the year. To ensure that the instruction is effective, every course of training has minimum hour requirements and evaluation methods and standards for gauging performance and assessing the actual beneits of human capital inputs.

Average Training Hours per Employee

2016 Fubon Financial Holdings Taipei

Fubon Bank

Fubon Life

(Ofice Staff) Fubon Life

(Outside Agents) Fubon Insurance

Fubon Securities Total

Managers

68.7 40.7 42.7 43.7 46.4 44.4 43.8

25.2 52.6 44.8 40.4 45.3 49.5 41.6

Non-managers

15.5 36.0 33.4 68.6 25.2 34.1 53.3

20.2 39.0 29.3 65.9 32.7 39.5 51.8

Average Training Hours per Employee

25.3 38.7 32.2 59.6 31.5 38.5 50.2

Note 1: Training development plans are tailored to the speciic needs of each job and are not affected by gender. The differences in average training hours between men and women are due to structural workforce issues

Note 2: A total of 1,892,804 hours were spent in training, including on compliance, legal education, and courses for new hires.

Note 3: The 999 classes include classes held by the Group for employees from across different subsidiaries.

trends, think in new ways and enhance their professional management skills. Several new topics were added, including on ESG policies and trends, the threats and challenges of digital inance, Fintech, and compliance risk management. Nearly 3,700 managers attended these leadership classes and gave them an average satisfaction rating of 4.6.

II. Management Trainee Program

A management trainee program was initiated in 2009 to deepen the Company’s talent pool and pass on the Company’s culture and ideals. These trainees are of tremendous beneit to subsidiaries in the development of their businesses, and they also reduce the risk of disruptions in management talent by serving as "managers in reserve" for future successions. Thus, during their training period or as they work for the Company, they are considered key human resources in Fubon’s talent development plans.

Employees who qualify for the management trainee program must irst pass an initial review that covers past performance, willingness to become a manager and management potential, and they then have to be recommended by a supervisor. After that, they undergo a comprehensive evaluation (such as leadership potential assessments and 360 degree feedback) and their overall credentials are discussed at a panel meeting of department managers. The candidates that emerge must then meet certain criteria, such as coursework and special project and public welfare participation, before being certiied as managers. A total of 570 management trainees had been certiied as managers through the program as of the end of 2016, with 61 certiied in 2016 alone. Nearly 40% of the 570 people who have received certiication have been promoted to managerial positions, meeting the program’s expectations and the talent needs for organizational growth and succession challenges.

In 2016, the digital learning platform was being upgraded to accommodate the smartphone era, and several new functions were planned, including a sign in/sign out function, an interactive course design function, and after-class questionnaires to gather feedback. Nearly 400 digital courses were added during the year, including courses developed in-house and purchased from outside organizations. Fubon employees used the learning platform more than 300,000 times during the year, as the injection of new resources compared to the previous year attracted more interest in online learning.

III. Management Associate (MA) Program

A management associate program was established in 2005 to ensure Fubon’s sustainable operations and continually nurture talent with management potential. Highly talented individuals are selected as candidates for the program and must overcome several hurdles before being hired as management associates. They are then given two years of systematic and diversiied training to quickly familiar them with the inancial services business and its operating procedures and deepen their specialized knowledge.

The training system has three components: 1) participation in special projects to strengthen the MAs core competitiveness and allow them to demonstrate their ability to innovate; 2) overseas internships to school them in international practices; and 3) a mentoring system that allows them to learn from senior executives up close and accelerate their learning curves. There were 12 classes of management associates from 2005 to 2016 that led to the hiring of nearly 200 MAs, who have had a retention rate of nearly 60% to date.

IV. Internal Instructor Cultivation Program

Cultivating internal instructors is vital to the design of training programs that are better aligned with I. Training for Managers

Tailored career development programs have been developed for managers at all levels of the organization that correspond to their management functions. Training courses are developed and designed to expose managers to the latest management techniques and knowledge and help them perform more effectively.

A total of 81 management classes were held in 2016, and the average satisfaction level was 4.6, with 5 the highest score. Among them, 60 leadership training classes were held to help managers identify

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internal practices and make the learning process more effective.

It also reinforces knowledge management and the handing down of experience. Because of that, Fubon Financial Holdings continues to nurture internal instructors through a comprehensive internal certiication system. A total of 73 Fubon employees were certiied as instructors in 2016, bringing the total to more than 600 since the program was initiated. Through their efforts, the organization’s specialized knowledge is imparted and shared through training classes and digital courses, helping forge a learning organization.

The internal instructor program has also been instrumental in lowering outside training expenses, and its impact has been extended through digital courses designed by the instructors, further boosting the return on investment in human capital. In 2016, internal instructors’ teaching hours rose 7.2% from the previous year to more than 3,000 hours.

V. International Talent Incubation

Fubon Financial Holdings likes to encourage exchanges with highly talented people from other countries in other fields to stimulate more cross-sector innovation and management inspiration. To develop outstanding talent with international management perspectives, the Company selects top employees every year to take one-year advanced management courses at MIT’s Sloan School of Management. In 2015, the Company promoted participation in the National University of Singapore’s Asia Leaders in Financial Institutions program and help Fubon managers understand the multifaceted nature of Asian development through intensive learning and dialogues with top industry leaders.

During their time abroad, participants still collect their salaries, their tuition is fully paid for, and their airfare (including for family members) and other living expenses are subsidized by the Company.

The hope is that when these outstanding talents return to their duties in Taiwan, they will inject ideas for change and new ways of thinking.

Creating a Diversiied Learning Environment Conducive to Self-learning

I. Employee Transfer Management

Fubon Financial Holdings has established “Regulations on Rotating and Transferring Personnel” to give employees exposure to different kinds of jobs and encourage their professional growth. Under the guidelines, supervisors can apply to have employees rotated based on their experience, performance, development potential

or professional needs. Employees can also go through recruiting channels to pursue rotation opportunities. Meanwhile, to comply with internal controls related to the inancial services sector, people in positions involving inance, cashier or purchasing functions shall be rotated after completing ive years in the same job.

II. Digital Learning Platform

To empower employees to learn on their own without time or place constraints, we have successfully created a digital learning platform through which they can strengthen their inancial expertise, computer skills, interpersonal communication skills, language ability, management skills or legal knowledge. New learning resources are constantly added to the platform. Employees are advised every month via the HR+ App of new internal and external training courses and the lastest training programs, and they can immediately check on the App’s

“Knowledge Station” for the learning resources they need. The digital learning platform helps employees and supervisors effectively manage the learning process by giving them lexibility in meticulously planning the best mix of classroom and digital instruction and evaluating the most effective learning methods. The result is that employees can learn without losing the beneits of group discussions and interaction or role playing while having the lexibility to learn on their own.

In 2016, the digital learning platform was being upgraded to accommodate the smartphone era, and several new functions were planned, including a sign in/sign out function, an interactive course design function, and after-class questionnaires to gather feedback.

Nearly 400 digital courses were added during the year, including courses developed in-house and purchased from outside organizations.

Fubon employees used the learning platform more than 300,000 times during the year, as the injection of new resources compared to the previous year attracted more interest in online learning.

III. Continuing Education Subsidies

To encourage employees to continue their education and arrange avenues of learning suitable for them, the Company offers inancial support for studying a language or pursuing a degree or professional certiications, and also provides incentives for earning certiications.

In addition, employees who take courses related to inance or their jobs at their own expense, whether at home or abroad, can apply to take time off while keeping their positions based on Fubon’s

“Management Guidelines for Employees Taking Leave without Pay.”

This measure caters to the different needs of Fubon employees as they

pursue personal growth and enables the company to keep positions open for outstanding employees and achieve its retention goals.

In 2016, 95 people applied for continuing education subsidies and received more than NT$1.4 million in assistance, up 60% from a year earlier. In terms of support for the pursuit of professional certiications, there were more employees who earned international certiications than during the previous year, and we hope employees will continue to strengthen their professional expertise to provide customers even better service.

Promoting Social Empowerment to Deal with Trends

For more than 10 years, Fubon Financial Holdings has collaborated with academia as part of its corporate social responsibility to nurture professional financial talent. With the support of the chairman, we launched a program under this cooperation strategy to join hands with schools and “nurture potential stars to create a new tomorrow.” Fubon has also worked with Fintech-related university departments to plan courses and continued to provide internship opportunities. In 2016, Fubon managers contributed more than 800 hours to seminars under the program that drew 1,629 students, 110% more than in the previous year.

I. Expanding Academia-Industry Cooperation to Unearth Potential Talent

As of 2016, the courses Fubon Financial Holdings tailors for vocational colleges and universities cover two main topics: “inancial technology” and “banking and inance.” The “banking and inance”

course has long been popular with inance-related departments and covers financial management practices, wealth management and property & casualty insurance practices.

The “financial technology” course, launched in 2016 to address the explosion in innovative financial technology, was developed in partnership with three university departments – Soochow University’s “School of Big Data Management,” the first of its kind in Taiwan; and National Chiao Tung University’s Department of Information Management and Finance and National Taipei University of Technology’s Department of Information and Finance Management, the only two departments in Taiwan that nurture inancial and digital talent simultaneously. The goal was to unearth and nurture potential inancial technology talent and be prepared to deal with the Company’s IT talent gap. We also hoped to spark innovative ideas and thinking internally through interaction with

the students.

Fubon managers or senior executives account for 70% of the course’s instructors, but executives from other Fubon Group companies are included to make the program more complete. Taiwan Mobile’s chief information officer, momo.com marketing managers, and kbro division managers are brought in, for example, as the main instructors on telecom and e-commerce practices. People from blockchain partner AMIS, digital asset exchange platform MaiCoin, Google and the Industrial Technology Research Institute are invited to teach technology. The caliber of this staff of instructors is unrivaled, and Fubon intends to invest additional resources in the program in 2017 to cultivate even more high-potential talent in the ield.

II. Nurturing Talent through the Fubon Internship Program

Fubon Financial Holdings has run an internship program successfully for many years. Fubon Life, which ills a relatively high percentage of its vacancies with interns, offers a comprehensive program for interns covering six major domains that gives them valuable workplace experience. A four-stage training process (orientation, general knowledge, specialized knowledge and summary) helps interns gradually become familiar with the business and the organization while developing the skills and knowledge they will need in the workplace in the future. At the end of the program, the best interns get priority consideration for full-time employment and serve as a stable source of manpower.

The internship program relies on three approaches to attract potential talent: 1) signing cooperation agreements with vocational colleges and universities; 2) participating in campus recruiting activities; and 3) advertising on online manpower sites. There are two types of internships:

From left to right: Fubon Financial Holdings Chief HR Oficer Joyce Chen, Vice President Eric Lee, and President Vivien Hsu; Taiwan Mobile Foundation Chairman Simon Chang; and Soochow University President Wei-Ta Pan and Vice President Wei-Liang Chao were present for the signing of an agreement by Fubon and Taiwan’s irst university to have a “School of Big Data Management” to cooperate on nurturing Fintech talent.

1. Special Project Intern: Internship primarily involves a student working independently toward achieving a specific objective, including participating in the research, analysis and development of a special project. Interns’ schedules can be arranged lexibly around their academic obligations, and their time at work can range from one to ive days a week. Special projects can include customer segmentation analysis, industrial and economic research, mentoring by high-level managers, social media marketing, programming development, and participation in a Fintech workshop.

2. Workplace Intern: Offers a workplace experience involving regular job duties; program works in concert with the school’s internship policies and can run for a full year, a semester or simply summer or winter breaks. Interns work ive days a week to fully experience how a workplace operates, and they serve in a range of roles, from bank tellers and securities agents to property & casualty customer service representatives and administrative assistants.

Internship programs are designed with students’ academic programs and school requirements in mind and can last for a summer or winter vacation, a semester or a full year. Students can also make their own arrangements and work at the Company at least two days a week. An internship contract is signed with each intern covering the length of the internship, evaluation criteria, the nature of the work, attendance requirements, and compensation to safeguard their rights and interests. For overseas internships, Fubon Financial Holdings provides an internship allowance and subsidizes transportation and living expenses to reduce interns’ inancial burden and allow them to concentrate on their work.

Fubon Life President Benson Chen (left) strikes a playful pose with an intern while presenting him with his internship certiicate, helping draw young people closer to the company.

Aside from courses and internships, Fubon Financial Holdings also arranges ield trips to the Company for students at schools’ request. During the outings, Fubon supervisors introduce students to the workplace by helping them observe and understand workplace practices.

III. Potential Stars Scholarship Program

Fubon has always taken it upon itself to support disadvantaged members of society. In 2016, we launched a program to give scholarships to outstanding college students of limited economic means to help them complete their education. The students, who represent a valuable source of potential talent, are also given irst shots at internships and full-time job opportunities. The program drew an enthusiastic response in its irst year, with nearly 800 applications received. After the applicants’ qualiications were screened and managers at Fubon subsidiaries conducted a comprehensive review, 20 low-income students were selected as the recipients of NT$50,000 scholarships. The program will be expanded to 40 beneiciaries in 2017 so that more students can receive the encouragement and warmth they need and deserve. Fubon

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Fubon Financial Holdings President Vivien Hsu (front, third from left) attends the “Potential Star Scholarship Program” ceremony on Jan. 20, 2017 to present 20 students with scholarships. She was joined by Fubon Financial Holdings Chief HR Oficer Joyce Chen (2nd row, left) and Fubon Insurance President Ben Chen (front, 3rd from right) in encouraging the students to inish their education.

also hopes the program will serve as a catalyst that inspires more companies to invest in the futures of economically disadvantaged students.

The Company will remain fully committed in the future to the professional and personal development of its employees to cope with external trends and support internal strategies. We will also continue to emphasize the systematic cultivation of employees’ professional competencies and flexible talent rotation plans while fostering an environment conducive to self-initiated learning with the help of a top-notch digital learning platform and incentives for continuing education.

Social empowerment programs centered around industry-academia cooperation will also remain top priorities in our human capital strategy. A Fintech innovation competition will be held in 2017 to help the Company connect with young talent, and we will further promote our internship and “Potential Star”

scholarship initiatives. The internship program will also be expanded to overseas subsidiaries to provide the talent needed to support Fubon’s expansion into Asia. All of these plans will help expand our vision and create closer bonds between the Company and students, schools and society.