Annual Reports  >  2014  >  Corporate Governance > Code of Ethics and Business Conduct
Code of Ethics and Business Conduct

Ethics Values

Integrity is the most important core value of TSMC’s culture. TSMC is committed to acting ethically in all aspects of our business; constantly and vigilantly promoting integrity, honesty, fairness, accuracy, and transparency in all that we say and do.

At the heart of our corporate governance culture is TSMC’s Code of Ethics and Business Conduct (the “Code”) that applies to TSMC and its subsidiaries, and this Code requires that each employee bears a heavy personal responsibility to preserve and to protect TSMC’s ethical values and reputation and to comply with various applicable laws and regulations.In so doing, each of us:

  • must not advance our personal interests at the expense of, or in conflict with the Company;
  • must refrain from corruption, unfair competition, fraud, and waste or abuse of corporate assets;
  • must not undertake any practices detrimental to TSMC, the environment and to society;
  • must procure all of our raw materials from socially responsible sources;
  • must abide by both the spirit and letter of all applicable laws, rules and regulations; and
  • must avoid any efforts improperly to influence the decisions of anyone, including government officials, agencies, and courts, as well as our customers, suppliers, and vendors.

In order to build and sustain an environment of innovation, technology leadership, and sustainable profitable growth, the Code requires that we must promote business relationships founded upon an unwavering respect for the intellectual property rights, proprietary information and trade secrets of TSMC, our customers, and others.

With respect to information disclosure, 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.

Our core value in ethics is implemented in four ways by all of our employees, officers and Board members who must wholeheartedly embrace and practice the Code. First, TSMC’s management sets the “tone from the top” by acting in accordance with the Code so that they may be an example to all stakeholders. Second, working-level managers are responsible for ensuring their staff’s understanding of and compliance with applicable rules and regulations. Thirdly, we encourage an environment of open communications in discussing any questions related to the Code. Any stakeholder may consult his or her direct supervisors, Human Resources or Legal to obtain timely advice. Lastly, TSMC requires all employees to stay vigilant and whistle-blow any noncompliance by anyone to their supervisors, the function head of Human Resources, the responsible corporate Vice President that oversees the Ombudsmen system, or to the Chairman of the Company’s Audit Committee directly. In particular, the Ombudsmen system allows for anonymous reporting and is open to external parties such as our vendors and subcontractors. TSMC treats any complaint and the investigation thereof in a confidential and sensitive manner, and strictly prohibits any form of retaliation against any individual who in good faith reports or helps with the investigation of any complaint.

In addition, we expect and assist our customers, suppliers, business partners, and any other entities with whom we deal (such as consultant or third party agents who act for or on behalf of TSMC) to recognize and understand TSMC’s ethics standards to fulfill our responsibilities as a corporate citizen.

Any modification to the Code requires the approval of our Audit Committee composed of independent directors to ensure our ethics compliance program is independently judged in light of the highest ethical standards.

Code Administration and Disciplinary Action

To educate and remind our employees of their responsibilities under the Code, we publish our Code and relevant policies on our intranet and promote its awareness through training courses, posters, and internal news articles. We also have an introductory training course on the Code which is available to all employees online, as well as advanced courses delving into more specific individual topics such as anti-corruption and insider trading (available online or in person).

As part of our ethics compliance program, all employees must disclose any matters that cause, or may cause, actual or potential conflict of interest. In addition to such proactive disclosure requirement employees with certain job responsibilities and senior officers must periodically declare the existence of any conflict of interest situation. All departments and subsidiaries of TSMC are also required to conduct Control Self-Assessment (CSA) tests annually to review employees’ awareness of the Code. The results of such CSA are reviewed to gauge the results of our compliance program.


As for our suppliers, vendors and contractors, we require all of them to declare in writing that they will not engage in any fraud or any unethical conduct when dealing with us or our officers and employees. We also communicate our ethical culture to our business partners through regular live seminars to prevent any unethical conduct and detect any sign of Code violations.

The Internal Auditor of TSMC plays a critical role in ensuring the Company’s compliance with the Code and relevant rules and regulations. To ensure that our financial, managerial, and operating information is accurate, reliable, and timely and that our employee’s actions are in compliance with applicable policies, standards, procedures, laws and regulations, our Internal Auditor conducts audits of various control points within the company in accordance with its annual audit plan approved by the Board of Directors and subsequently reports its audit findings and remedial issues to the Board and management on a regular basis.

We do not tolerate any violation of the Code and treat every possible violation incident seriously. Any violator of the Code (or relevant regulations) will be severely punished to the full extent of our policies and the law, including immediate dismissal, termination of business relationship, and judicial prosecution as appropriate.

Taiwan Corporate Conduct and Ethics Implementation as Required by the Taiwan Financial Supervisory Commission