CSBC Corporation, Taiwan Code of Ethics
Published by letter Chuan-Guan-Zhi No. 1020000531 on April 2, 2013
Amended as per letter Chuan-Guan-Zih No. 0000552 on April 2, 2014
Amended as per letter Chuan-Guan-Zih No. 1040000999 on May 21, 2015
I. (Purpose and Scope of Application)
The Company establishes this Code in order to build the corporate culture and to
seek sound development of ethical operation.
This Code is applicable to the subsidiaries of the Company, juridical persons to
which the Company has directly or indirectly donated 50% or more funds on
accumulated basis and other organizations or corporate entities over which the
Company has substantial control.
II. (Prohibition against Unethical Conduct)
No director, manager, employee, appointee or any person with substantial control
of the Company (hereinafter a “Substantial Controller”) or other stakeholder shall,
in the process of performing business activities, directly or indirectly offer, promise,
request or receive any undue interest or engage in any act that is unethical, illegal
or in violation of fiduciary obligation for the purpose of acquiring or maintaining
interest (hereinafter “Unethical Conduct”).
The target of the act mentioned in the previous paragraph includes public officials,
political candidates, political parties or any staff thereof, as well as any public or
private enterprise or organization and any director (managing director), supervisor
(auditor), manager, employee, Substantial Controller or other stakeholder thereof.
III. (Type of Interest)
“Interest” referred to in this Code means any matter or object of value, including
money, gift, commission, position, service, gratuity and kickback in any form or
name, except normal and occasional social etiquette that does not have an impact
on specific right or obligation.
IV. (Compliance with the Law)
The Company shall comply with the Company Act, Securities and Exchange Act,
Business Entity Accounting Act, Political Donations Act, Anti-Corruption Act,
Government Procurement Act, Act of Recusal of Public Servants Due to Conflicts
of Interest, regulations related to TWSE/GTSM listed companies and other
commercial conduct-related legislations as the basic condition for implementation
of ethical operation.
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V. (Policy)
The Company shall establish ethic-based policies in accordance with ethical,
transparent and responsible business philosophies and build good corporate
governance and risk control mechanism in order to create an operational
environment of sustainable development.
VI. (Precautionary Solutions)
The Company shall actively prevent unethical conduct in accordance with the
ethical management policy as mentioned the previous article, and shall establish
solutions for prevention of unethical conduct, including operational procedures,
code of conduct and educational training (“Precautionary Solutions” hereinafter)
when necessary.
The Precautionary Solutions mentioned above shall comply with the relevant local
laws and regulations at the locality of the Company, its affiliated businesses, and
its organization and operation.
In the process of formulating these Precautionary Solutions, sufficient
communication with employees, the labor union, important business counterparties,
and other stakeholders should be maintained.
VII. (Scope of Precautionary Solutions)
When establishing the Precautionary Solutions, the Company shall analyze
operational activities with higher risks of unethical conduct within the scope of its
operation and reinforce the relevant precautionary measures.
The Precautionary Solutions shall include at least precautionary measures against
the following conduct:
(I) Offer and acceptance of bribery.
(II) Provision of illegal political donations.
(III) Improper charitable donation or sponsorship.
(IV) Provision or acceptance of unreasonable gift, entertainment or other undue
interests.
(V) Infringement of business secrets, trademark, patents, copyrights, and other
intellectual property rights.
(VI) Engagement in unfair competition.
(VII) Direct or indirect harm to the rights, health, and safety of consumers or other
stakeholders during the research and development, procurement, production,
provision or sale of products and services.
VIII. (Commitment and Execution)
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The Company shall expressly state the policy of ethical operation, as well as the
board of directors’ and the management’s commitment to the active
implementation of the ethical management policy in its internal charters and
relevant external documents, and shall duly execute the policy in internal
management and commercial activities.
IX. (Ethical Operation of Business Activities)
The Company shall engage in business activities in a fair and transparent manner
on the basis of the ethical management policy.
Before engaging in business dealings, the Company shall consider the legality of
the agent, supplier, client or other business transaction counterparty and whether
they are involved in any unethical conduct. Dealing with parties involved in any
unethical conduct shall be avoided.
When signing a contract with its agents, suppliers, customers or other business
counterparties, the Company shall include in the contract clauses about compliance
with the ethical management policy and the possibility to terminate or cancel the
contract at any time if the transaction counterparty is involved in any unethical
conduct.
X. (Prohibition against Offer and Acceptance of Bribery)
The Company and its directors, managers, employees, appointees or Substantial
Controllers shall not, in performing business activities, directly or indirectly offer,
promise, request or accept any form of undue interests to or from any client, agent,
contractor, supplier, public official or other stakeholder.
XI. (Prohibition against Provision of Illegal Political Donations)
Any direct or indirect donation to any political party or any organization or
individual participating in political activities by the Company or any of its
directors, managers, employees, appointees or Substantial Controllers shall be in
accordance with the Political Donations Act and relevant internal procedures of the
Company. Such donations shall not be used to seek any commercial interest or
transaction advantage.
XII. (Prohibition against Undue Charitable Donation and Sponsorship)
Any charitable donation or sponsorship by the Company or any of its directors,
managers, employees, appointees or Substantial Controllers shall be in accordance
with applicable legislations and internal procedures and shall not be used as
bribery in disguise.
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XIII. (Prohibition against Unreasonable Gift, Entertainment or Other Undue Interests)
The Company and its directors, managers, employees, appointees or Substantial
Controllers shall not directly or indirectly provide or accept any unreasonable gift,
entertainment or other undue interests for the purpose of establishing commercial
relationship or impacting any commercial transaction.
XIV. (Prohibition against Infringement of Intellectual Property Rights)
The Company and its directors, managers, employees, appointees or Substantial
Controllers shall abide by the laws and regulations relating to intellectual property
rights, the Company’s internal operating procedures, and any contractual
provisions. Material shall not be used, leaked, disposed of, destroyed, or no other
behavior jeopardizing intellectual property rights shall be allowed without the
permission of the intellectual property rights holder.
XV. (Prohibition against Engagement in Unfair Competition)
The Company shall engage in business activities in compliance with relevant
competition laws and regulations. No attempt shall be made to fix prices,
manipulate bids, restrict output and quota, or share or segment the market by
means of allocating customers, suppliers, business regions or business types, etc.
XVI. (Prevention of Products’ or Services’ Harm to Stakeholders)
The Company and its directors, managers, employees, appointees or Substantial
Controllers shall abide by the relevant laws and regulations as well as international
standards during the processes of research and development, procurement,
production, provision or sale of products and services, ensuring information
transparency and safety in relation to the products and services. This shall be put
into practice in operational activities to prevent the products or services from
directly or indirectly hurting the rights, health, and safety of ship owners or other
stakeholders.
XVII. (Organization and Responsibility)
Directors, managers, employees, appointees, and Substantial Controllers of the
Company shall exercise duty of care as good administrators to procure that the
Company prevent unethical conduct and review at all times the Company’s
performance and seek continuous improvement to ensure the implementation of
the policy of ethical operation.
To perfect the management of ethical operation, various internal units of the
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Company shall undertake the following tasks, while the Audit Office shall
supervise the execution of such tasks and make regular reports to the board of
directors.
(I) Planning Department:
1. Help incorporate ethics and moral value into the Company’s business
strategy.
2. Recommend on the adjustment of internal organization and responsibilities;
establish mutual supervision, check and balance mechanism for business
activities with relatively higher risk of unethical behaviors in the
Company’s scope of business.
(II) Legal Affairs Office:
In coordination with the laws, ensure the effective execution of the
Precautionary Solutions for ethical management and the relevant standard
operating procedures in each solution.
(III) Management Department:
1. Set down the “Ethical Management Operating Procedures and Behavioral
Guidelines” (including the Precautionary Solutions and the reporting
system, whistleblower (reporter) protection procedures and behavioral
guidelines).
2. Promotion and coordination of the ethical management policy publicity and
training.
(IV) Audit Office:
1. Accept reports and undertake reporter protection affairs, ensuring the
effective execution.
2. Assist the board of directors and the management in investigating and
evaluating the effective operation of the precautionary measures established
for the practical implementation of ethical management, and conduct
regular compliance assessment on the relevant business workflows and
compile reports on that.
XVIII. (Legislative Compliance in Business Activities)
In performing business activities, the directors, managers, employees,
appointees and Substantial Controllers of the Company shall comply with the
legislative provisions and the Precautionary Solutions.
XIX. (Recusal Due to Conflicts of Interest)
The Company shall establish policies against conflict of interest, which provide
a basis for identifying, supervising, and managing the risk of unethical behaviors
that may be caused by conflict of interest. Proper channels shall be provided
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for directors, managers, and other stakeholders who attend the board of
directors’ meetings (even as nonvoting members) to offer explanations about
whether or not there is a potential conflict of interest with the Company.
The Company’s directors, managers, and other stakeholders who attend the
board of directors’ meetings (even as nonvoting members) shall explain the
important content of their interest in the subject matter in that specific board of
directors’ meeting when any motion in the agenda of the meeting is related to
the interest of themselves or the corporation they represent. If the Company’s
interest may be jeopardized, they shall not participate in the discussion or voting,
shall recuse themselves when discussing and voting for such motions, and shall
not exercise the voting rights on behalf of any other directors. Directors shall
also exercise self-discipline and shall not support each other in any undue
manner.
None of the directors, managers, employees, appointees or Substantial
Controllers of the Company shall acquire any undue interest for himself or his
spouse, parent, child or any other person by taking advantage of his position or
influence in the Company.
XX. (Accounting and Internal Control)
The Company shall establish effective accounting system and internal control
system for business activities with higher risk of unethical conduct. There
shall not be any second set of books of accounting or reserved secret accounts.
The systems shall be reviewed at all times to ensure that the design and
execution thereof remain effective.
The internal audit office of the Company shall regularly review the compliance
of the systems mentioned in the previous paragraph and shall prepare audit
reports which shall be submitted to the board of directors. CPAs may also be
appointed to carry out the audit, and professionals may be designated for
assistance when necessary.
XXI. (Operational Procedures and Code of Conduct)
The Precautionary Solutions established by the Company in accordance with
Article VI shall specifically provide the operational procedures and code of
conduct for the performance of activities by the directors, managers, employees
and Substantial Controllers, including the following:
(I) Provision or acceptance of interests shall be consistent with normal social
etiquettes and be occasional and not having any impact on specific rights or
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obligations.
(II) Provision of procedures for handling legal political donations.
(III) Provision of procedures and amount standards for justifiable charitable
donation or sponsorship.
(IV) Regulations to avoid conflict of interest related to job duties and the
reporting and handling procedures thereof.
(V) Rules of confidentiality for confidential and commercially sensitive
information acquired in the course of business.
(VI) Regulations and handling procedures in relation to any supplier, client or
business counterparty who is involved in any unethical act.
(VII) Procedures for handling any identified violation of the corporate code of
ethics.
(VIII) Discipline on violators.
XXII. (Educational Training and Review)
The Company’s Chairman, President or senior management shall regularly
communicate the importance of ethics with directors, employees, and
appointees.
The Company shall organize educational training and promotion to it directors,
managers, employees, appointees and Substantial Controllers regularly, and
shall invite counterparties engaged in business behaviors with the Company to
such training and promotion to make sure they fully understand the Company’s
determination concerning ethical operation, policies, Precautionary Solutions
and the consequence of deviating the ethical conduct.
The Company shall combine the policy of ethical operation with the policy of
employee performance review and human resource policies to establish a clear
and effective reward and discipline system.
XXIII. (Reporting System)
The Company shall establish specific reporting system, and put it into practice
reliably. The system shall contain at least the following:
(I) Set up and announce the independent internal reporting mailbox and
hotline, or designate other external independent agency to provide the
reporting mailbox and hotline for the use of the Company’s internal
personnel and outsiders.
(II) The Audit Office is the Company’s unit in charge of accepting reports.
If the reported case involves a director or senior manager, it shall be
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reported to the independent directors. The Management Department
shall identify the categories of reports and the corresponding standard
operating procedures of investigation.
(III) Recording and safekeeping of the accepted reports, process of
investigation, result of investigation, and the relevant documentation.
(IV) Confidentiality of reporters’ identity and content of reports.
(V) Measures to protect reporters from being improperly treated due to the
fact of making a report.
(VI) Incentives for reporters.
If the Company’s personnel or unit in charge of accepting reports is found to
have serious violation or the Company is at risk of suffering serious loss, a
report shall be made immediately to inform the independent directors in
writing.
Relevant personnel in charge of handling reports shall make a written statement
for keeping the identity of reporters and content of reports confidential. The
Company shall also make a commitment to protect reporters from being treated
improperly due to the fact of making a report.
XXIV. (Penalty and Appeal System)
The Company shall establish and announce the penalty and appeal system for
violation of the provisions of ethical operation, and shall disclose the position
and name of any violator, the date of violation, the content of violation and
dispositions immediately on the Company’s intranet.
XXV. (Disclosure of Information)
The Company shall develop the quantitative data for promoting ethical
management, and make ongoing analysis and evaluation of the effectiveness of
promoting ethical management. The steps taken for ethical management, the
performance, and the above-mentioned quantitative data and effectiveness of
execution shall be disclosed in the Company’s website, annual reports and
prospectus. The content of the Code of Ethics shall be published and
disclosed on the Market Observation Post System.
XXVI. (Review and Amendment of the Ethical Management Policy and Measures)
The Company shall pay attention to domestic and overseas development of
regulations related to ethical operation and shall encourage its directors,
managers and employees to propose suggestions for the review and
improvement of the ethical management policy and the relevant promoting
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measures established by the Company in order to enhance the Company’s
performance in putting ethical operation into practice.
XXVII. (Implementation)
This Code of Ethics shall be deliberated by the audit committee, and then
submitted to the board of directors for approval before implementation. It
shall also be reported in the shareholders’ meeting. The same shall be
applicable to any amendment hereto.
When the Code of Ethics is submitted to the board of directors for discussion
as provided in the previous paragraph, the Company shall thoroughly consider
the opinions of each independent director, and shall state their comments of
objection or reservation in the minutes of the board of directors’ meeting. If
an independent director cannot attend the board meeting in person to express
his/her objection or reservation, a written statement of his/her opinion shall be
presented in advance and be stated in the minutes of the board meeting, unless
a proper reason is given.
*This English version is a translation of CSBC Corporation, Taiwan Code of Ethics
in Chinese. In case of any discrepancy, the Chinese version shall prevail.
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