TSMC's Board of Directors consists of seven distinguished members with a great breadth of technology, businesses and management experience. Three of the eight members are independent directors: former British Telecommunications Chief Executive Officer, Sir Peter L. Bonfield; former Acer Group Chairman, Mr. Stan Shih; and former Texas Instruments Chairman, President and CEO, Mr. Thomas J. Engibous. Under the leadership of Chairman Morris Chang, TSMC's Board of Directors takes a serious and forthright approach to its duties and is a serious, competent and independent Board.

In the spirit of Chairman Chang's approach to corporate governance, a board of directors's primary duty is to supervise. The board should supervise the Company's: compliance with relevant laws and regulations; financial transparency; timely disclose of material information, and maintaining of highest integrity within the company. TSMC's Board of Directors strives to perform through the Audit Committee and the Compensation Committee, the hiring of a financial expert for the Audit Committee, coordination with the Internal Audit department, and through the ombudsman reporting system.

The second duty of the board of directors is to provide guidance to the management team of the company. TSMC's management quarterly reports to the TSMC's Board on a variety of subjects. The management also reviews the Company's business strategies with the Board. Furthermore, the management often reviews with and updates TSMC's Board on the progress of the strategies, obtaining Board guidance as appropriate.

The third duty of the board of directors is to evaluate the management's performance and to dismiss officers of the company when necessary. TSMC's management has maintained a healthy and functional communication with TSMC's Board of Directors, has been devoted in executing guidance of TSMC's Board of Directors, and is dedicated in running the business operations, all to achieve the best interests for TSMC's shareholders.