The Board of Directors appointed Ms. Sylvia Fang, the Vice President and General Counsel of TSMC, as the Corporate Governance Officer responsible for corporate governance matters, including handling of matters relating to Board, Audit and Risk Committee, Compensation and People Development Committee, Nominating, Corporate Governance and Sustainability Committee and Shareholders’ meetings in compliance with law, assistance in onboarding and continuing education of directors, provision of information required for performance of duties by directors, and assistance in directors' compliance of law, etc.
The duties performed by the Corporate Governance Office in 2022 are as follows: assisted Chairman of Board of Directors and Committees’ Chairs to convene four Board Meetings, one Special Board Meeting, four Audit Committee Meetings, one Special Audit Committee Meeting, four Compensation Committee Meetings, one Special Compensation Committee Meeting, and 2022 Annual Shareholders’ Meeting; provided continuing education information to directors; provided information required for performance of duties by directors; presented quarterly legal compliance report to the Board of Directors, and timely responded to all Directors’ requests, and etc.
Continuing Education Training of Corporate Governance Officer in 2022
|Name||Date||Host by||Training/Speech Title||Duration|
Vice President and General Counsel
Corporate Governance Officer
|04/22||Taiwan Corporate Governance Association||Net-zero Emissions, Carbon Neutrality, and Corporate Compliance||3 hours|
|10/19||Taiwan Corporate Governance Association||The 18th Corporate Governance Summit Forum – Boosting Board Directors’ Competencies for Effective Sustainable Corporate Governance||6 hours|
|12/21||Taiwan Corporate Governance Association||Introduction of Hostile Takeovers and Regulation Compliance||3 hours|
Corporate Conduct and Ethics Implementation
TSMC’s Board of Directors strives to perform the responsibilities of supervising the corporate conduct and ethics compliance practice through the Audit and Risk Committee, the Compensation and People Development Committee, the Nominating, Corporate Governance and Sustainability Committee, the hiring of a financial expert consultant for the Audit and Risk Committee, and coordination with the Internal Audit department. The General Counsel and the Corporate & Compliance Legal Division (which directly reports to the General Counsel) promote the Company’s ethical standards, and the General Counsel reports quarterly to the Board on the implementation status. In addition, both the responsible senior manager to oversee the Ombudsmen system and Internal Auditors update the Board on ethical standards and compliance issues on a regular basis. Moreover, TSMC’s officers, especially our CEO, CFO, and General Counsel, with oversight from our Board, are responsible for the full, fair, accurate, timely, and understandable financial accounting and financial disclosure in reports and documents filed by the Company with securities authorities and in all TSMC public communications and disclosures.
Furthermore, to ensure that our conduct meets relevant legal requirements and the highest ethical standards under the Ethics Code, TSMC provides multiple channels for reporting business conduct concerns.
The Implementation in 2022
Under the framework of the Ethics Code, TSMC has established a regulatory compliance program that includes policies, guidelines and procedures in various policy areas, including: Corporate Governance, Securities Laws, Anti-corruption, Anti-harassment, Anti-discrimination, Labor Laws, Anti-trust (unfair competition), Environmental Protection, Safety and Health, Export Control, Financial Reporting, Insider Trading, Intellectual Property Protection, Proprietary Information Protection, Personal Data Protection, Record Retention and Disposal, as well as procuring certain raw materials from socially responsible sources (Conflict-free Minerals). The above-mentioned policies are crucial in facilitating overall compliance with the Ethics Code. TSMC provided an “Annual Ethics and Compliance Training Course” (mandatory 0.5 hour online course) covering various important regulatory compliance topics and a total of 67,922 (99.9% completion rate) employees (including employees in subsidiaries) completed this training course. In addition, to implement insider trading regulatory compliance, TSMC provided training material of the insider trading on-line program (0.5 hour-length course), and designated managers at R&D Organization and oversea fabs of Operations Organizations as trainees – a total of 1,950 managers, at 97.7% completion rate completed this on-line program as requested. Each year going forward, TSMC will designate employees from different departments to take insider trading on-line program to strengthen employees' awareness and compliance with insider trading laws.
In 2022, TSMC did not receive any reports related to finance, accounting or antitrust matters, nor did we receive any complaints concerning breach of customer privacy and loss of customer data, non-monetary sanctions, or any material regulatory violations (where a fine exceeds NT$1 million). In 2022, the incidents reported through the Audit Committee Whistleblower System, Ombudsman System, and Irregular Business Conduct Reporting System totaled 335. Among them, 217 cases were related to people management/employee relations, 107 cases were categorized as others (e.g., asking personal questions or private matters), and 11 cases were related to ethics. Four incidents were verified upon investigation and determined for disciplinary action by the Ethics Committee. In 2022, TSMC leveraged the four violations to strengthen ethics promotion for all employees in supplier-related activities.
For a long time, TSMC has been protecting R&D innovation and operation development by way of utilizing patents and trade secrets as dual tracks under the established comprehensive IP management system, encouraging Company’s innovation culture, and strengthening Company’s competitive strengths so as to fulfill the Company’s ESG vision. At least once a year, the General Counsel updates to the Board of Directors the status of the intellectual property management scheme.
- TSMC received a AAA (the highest tier) certificate by Taiwan Intellectual Property Management System (TIPS) in December 2021, and the valid period will expire after December 31, 2024.
- In terms of patent filings, TSMC has accumulated more than 85,000 patent applications worldwide as of end of 2022, including 8,500+ applications filed in 2022. TSMC ranked No. 2 among global US patent applicants, and No. 1 among patent applicants in Taiwan.
- In terms of patent grants, TSMC has accumulated 56,000+ patents worldwide as of end of 2022, including 5,500 global patents received, ranking No. 3 among U.S. Patentees and No. 1 among patent patentees in Taiwan.
- In terms of patent quality, the allowance rate of TSMC’s U.S. applications reached 100%.