Ethical Corporate Management Best Practice Principles

Transcription

1 Ethical Corporate Management Best Practice Principles Article I: Last Updated: 2015/11/06 (Purpose of establishment and scope of application) This set of principles was instituted in accordance with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies announced by Taiwan Stock Exchange Corporation and serves as a guideline to nurture a corporate culture of business integrity and sustainable development for the Company. The Principles shall be abided by directors, managers, employees, mandataries, and other entities with actual ability to control the Company (hereinafter referred to as the Actual Controllers ). The aforementioned individuals and entities hereinafter are referred collectively to as the Company Professionals. This set of principles is applicable to the Company, subsidiaries of the Company, non-profit organizations to which the Company directly or indirectly donates more than 50% of funding or any other institutions or corporate bodies it controls. Article II: (Prohibition of unethical practices) Company Professionals shall not directly or indirectly offer, promise, request or accept illicit benefits in any form in the course of business engagements, or, act in breach of trust, illegally, or the obligation under trust for seeking or keeping benefit (hereinafter referred to as unethical practices ). The aforementioned targets shall include civil servants, candidates in political elections, political parties or political party apparatus, and any other enterprises or institutions in the public and private sectors and their directors, supervisors, managers, employees, parties under dominant control, or any other Related - 1 -

2 Parties. Article III: (Forms of interest) Benefits as specified in this set of principles refer to any object or matter of high value, including money, gifts, commissions, offering of positions, service, preferential treatment, and kickbacks in whatever forms or under whatever titles, except for common practices as customs and social interaction that are incidental and do not affect specific rights and obligations. Article IV: (Compliance) The Company and Company personnel shall duly observe the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, applicable legal rules for listing on TWSE or for regulating commercial behavior as fundamental conditions for the proper enforcement of business integrity. Article V: (Policy) The Company maps out its corporate policy on the basis of sincerity under the corporate philosophy of integrity, transparency, and accountability, and has developed a viable system for corporate governance and risk control to establish an environment for corporate sustainability. Article VI: (Preventive Measures) The Company has instituted procedures and a code of conduct for the prevention of unethical practices. It is this set of principles that highlights the importance to Company personnel of performing their assigned duties in compliance with applicable legal rules. Article VII: (Scope of Ethical Corporate Management Best Practice - 2 -

3 Principles) In the preparation of preventive plans, the Company shall analyze areas of business operations that entail high risk of unethical practices, and include the following: I. Accepting and offering bribes. II. Offering illegal political donations. III. Improper charity donations or sponsorship. IV. Offering or accepting unreasonable gifts, receptions or any other illicit benefits. Article VIII: (Promise and Execution) The Company shall announce its policy of business integrity on the official website, in the annual report and related documents for external circulation. The Board and management shall promise to pursue the policy under due diligence and properly enforce it in internal management and external business activities. Article IX: (Integrity in business operations) The Company shall conduct business in a fair and transparent manner. Before proceeding with any business transaction, the Company shall consider the legitimacy of contractors, suppliers, customers and other business partners confirm if there is any record of unethical practices and avoid engaging in business with parties that have a record of unethical practices. When entering into an agreement with a third party, the Company shall include its business integrity policy as an integral part of the agreement. In addition, the Company shall also specify in the agreement that in the event of any breach of business integrity by the trading counterparty, the Company can terminate or discharge the provisions of the agreement at any time. Article X: (Prohibition of bribery) In the course of business, Company personnel shall not directly or indirectly offer, promise, demand or accept illicit benefits of any - 3 -

4 form, including kickbacks, commissions, finder fee, or, offer or accept illicit benefits from customers, contractors, suppliers, civil servants, or any other Related Parties unless otherwise permitted by the law in the place of operation. Article XI: (Prohibition of illegal political contributions) Company personnel may make donations to political parties or organizations or individuals participating in political activities directly or indirectly in compliance with the Political Donations Act, and related internal procedures of the Company. There shall be no political donations as an attempt to seek business interest or advantage in trade. Article XII: (Prohibition of improper charity donations or sponsorship) Company personnel may make charitable donations or offer sponsorship only in compliance with applicable legal rules and the internal operational procedures of the Company, and shall not use such donations or sponsorship as covert bribery. Article XIII: (Prohibition of unreasonable gifts, receptions or other forms of illicit benefit) Company personnel are strictly prohibited from demanding any gifts, special offers or preferential treatment directly or indirectly from current or potential suppliers, contractors, or customers, including special and extravagant meals or other forms of reception unrelated to business or customary practice. Company personnel shall not accept any gift of special offer from any supplier, contractor, or customer except where the offering is in accordance with local customs and common courtesy and the value is below NT$2,000, or, the gifts bear the logo of related companies and is presented as a souvenir or free items for business promotion. If the offering is cash, explain the policy and regulations of the Company and politely decline the offer. If rejection is impossible, surrender the items to the Company - 4 -

5 Secretariat for further action. Company personnel shall not accept any price or gifts from related firms at celebrity events unless otherwise made known to the head of the function in advance and in writing. Company personnel shall not seek loans from, or leases with or without compensation, or any other forms of financing from suppliers, contractors and customers that have a business relationship with the Company. Company personnel on business trips (official business) shall not accept any improper invitation to a banquet or reception or an invitation to a banquet or reception that will substantiate an act of corruption by the individual concerned. The life style and behavior of personnel on business trips (official business) reflects on the Company and caution is required. Article XIV: (Prohibition against infringing intellectual property rights) Company Professionals shall comply with applicable laws and regulations, the Company's internal operational procedures, and contractual provisions concerning intellectual property, and may not use, disclose, dispose, or damage intellectual property or otherwise infringe intellectual property rights, such as management secrets, trademarks, patents, or publications, without the prior consent of the intellectual property rights holder. Article XV: (Confidentiality agreement) Company Professionals shall comply with the Securities and Exchange Act, may not use undisclosed information to engage insider trading or disclose the information to others to engage insider trading. Any institution or personnel take part in the Company s merger, segmentation, share purchasing or transferring, important memorandum, strategic alliance, cooperation plan or important contract, shall sign a confidentiality agreement with the Company, promise not to disclose the Company s business secrets or other important information, and may not use the information without - 5 -

6 the prior consent of the Company. Article XVI: (Organization and responsibilities) The Board of the Company shall pay close attention to related matters under due diligence, and supervise the Company to ensure there are no unethical practices. The Board shall also review enforcement and make continued improvements to ensure the proper pursuit of the business integrity policy. Human Resources Department of the Company is dedicated to administer the pursuit of the business integrity policy and the establishment of related preventive measures to make ethical corporate management viable, supervise the enforcement of such measures and make reports to the Board if there is any material misconduct. Article XVII: (Compliance with applicable business performance laws) In performing business operation, Company personnel shall duly observe relevant legal rules and the Company s preventive measures. Company Professionals shall abide by all articles, rules, bylaws, operation procedures of the Company, and follow the orders from authorized superior management. Article XVIII: (Avoidance of conflict of interest by Company personnel) The Company shall make policy to avoid conflicts of interest, and arrange channels for Company personnel to voluntarily explain possible and potential conflicts of interest with the Company. The directors of the Company shall be highly self-disciplined and be excused from any discussion or voting on motions related to their own interest or the interest of principals they represented that could jeopardize the interests of the Company, except to giving opinions or respond to questions. Likewise, directors shall not act as agents for other directors in the same situation and vote on their behalf or in the name of other directors to avoid conflicts of interest. Directors shall be self-disciplined and not support one - 6 -

7 another for illicit purposes. Company personnel shall not enable themselves, their spouses, parents, children, or any other third party to benefit illicitly by using their rank and position in the Company. Article XIX: (Accounting and internal controls) The Company shall establish an effective accounting system and internal control system to track business activities with high risk to business integrity. There shall be no off the book ledger or secret ledgers. These systems shall be subject to review as needed, to ensure the continued effectiveness of design and execution. The auditors of the Company shall audit compliance with the aforementioned systems and prepare audit reports to be presented to the Board of Directors. Article XX: (Operational procedure and action guidelines) The Company has established operational procedures or action guidelines to prevent unethical practices in business operations in the following areas: I. Standard to determine the offering or accepting of illicit benefits. II. Procedures for offering legally permitted political donations. III. Procedure for making legally permitted charitable donations or sponsorship and limits on the amount of such donations. IV. Regulations governing the avoidance of conflicts of interest with duties assigned to specific personnel, and procedures for declaration and handling. V. Regulations governing the confidentiality of secrets and sensitive business information acquired through business operations. VI. Regulations and procedures for handling unethical suppliers, customers and business partners. VII. Procedures for handling breaches of ethical corporate management best practice principles

8 VIII. Disciplinary action against offenders. Article XXI: (Training and Evaluation) The Company shall provide education on this set of principles for Company personnel to ensure their full understanding of the Company s determination, policy, and preventive measures in the area of business integrity and the results of breaching business integrity. The Company shall integrate the business integrity policy with employee evaluations, thereby establishing a viable system for rewards and punishments. Article XXII: (Report and punishment) Company personnel shall voluntarily report to supervisors, managers, the internal audit chief or other appropriate executives if they discovery any violation of these principles. The Company shall keep the identity of informers and the content of the report in strict confidence and investigate through independent channels. The Company shall take relevant punitive action against Company personnel who violate these principles, depending on the severity of the offense. In addition, the Company shall disclose the job titles and names of offenders, as well as the date and content of the violation, applicable provisions and punitive action on the MOPS website. The Company has established a complaints system for those who allegedly violate these principles to appeal or seek redress. Article XXIII: (Disclosure) The Company shall disclose the state of enforcement of these principles on its official website and in the Company annual report and prospectus. Article XXIV: (Review and amendment of this set of principles) The Company shall pay close attention to the development of - 8 -

9 business integrity rules and regulations at home and abroad, and encourage recommendations from Company personnel that could serve as a reference for the review and improvement of these principles, and in turn help to enhance ethical corporate management. Article XXV: (Implementation) This set of principles shall come into full force after being passed by the Board with copies delivered to the supervisors and presented to the Shareholders Meeting for ratification. The same procedure is applicable for any amendment thereto. *In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail