Compared to publicly traded companies that primarily use the system of independent directors and audit committees to supervise the legitimate and rational operation of the board's power, non-publicly traded companies adopt a system of supervisor(s) to oversee the board.
 
Since supervisor(s) do not have the right to vote on board resolutions, their opinions are sometimes overlooked. In some cases, some companies do not send meeting notifications to the supervisor(s), a situation especially prone in companies with a weaker understanding of corporate governance. However, while supervisor(s) lack the right to vote on matters at board meetings, not notifying them to attend the board meetings can lead to severe consequences.
 
In Taiwan, Article 218-2 of the Company Act stipulates: "Supervisor(s) of a company may attend the meeting of the board of directors to express their opinions." The purpose of this article is to allow supervisor(s) to understand the operational status of the company by attending board meetings, and to detect improper actions of directors earlier. As for the result of violating this article, there are no clear provisions in the Company Act itself, but there are court rulings worth referencing.
 
The court asserted that: “when the board of directors makes a resolution without notifying the supervisor(s) to attend and express their opinions, although the Company Act does not expressly stipulate the effect of such a resolution, it can be referred to Article 218-2 of the Company Act. This article grants the supervisor(s) the right to attend board meetings and express their opinions. The purpose is to provide different perspectives for discussion at the board through the objective, impartial third-party stance of the supervisor(s), rather than whether the supervisor(s) has voting rights. As the supervisor(s) is the supervisor(s)y body of the company's business, they need to understand the company's operational status to properly exercise their duties. Also, considering the intent of Article 204, which stipulates that the subject(s) to be discussed at the meeting of the board of directors should be notified to the supervisor(s) seven days in advance, resolutions made without notifying the supervisor(s) to attend and express their opinions should be considered invalid.“ (The Supreme Court Civil Judgment 106-Tai-Shang-57(2017)).
 
Sometimes, companies have sent meeting notifications to supervisor(s), but the supervisor(s) choose not to attend. The provision of the Company Act is to give supervisor(s) the right to attend and express opinions. Since the board has already notified the supervisor(s), if they choose not to attend, it is not the responsibility of the board. Therefore, if the supervisor(s) does not attend the board meeting after receiving the notice, the resolution made by the board will not be invalid, and the operation of the company will not be affected.
In short:
1. The supervisor(s) must be notified when convening a board meeting.
2. Whether the notified supervisor(s) attends or not does not affect the validity of the board resolution.
 
※Note: In 2018, the notice period in Article 204 in the Company Act was amended from 7 days to 3 days