Page 51 - TSMC 2018 Annual Report

2 Ethic Management Practice
(1) Does the the company assess the the ethics records of whom it has
business business relationship with and include business business conduct and ethics related clauses in in the business contracts?
(2) Does the company set up a a a unit which is dedicated to or tasked with promoting the company’s ethical standards and and reports directly to to the Board of Directors with periodical updates on relevant matters?
(3) Does the company establish policies to prevent conflict
of interests provide appropriate communication and complaint channels and implement such policies properly?
(4) To implement relevant policies on on ethical conducts does the company establish effective accounting and internal control systems that are audited by internal auditors or or CPA periodically?
(5) Does the company provide internal and external ethical conduct training programs on on a a a a a regular basis?
Implementation of Complaint Procedures
(1) Does the company establish specific complaint and reward
procedures set up conveniently accessible complaint channels and and designate responsible individuals to handle the complaint received?
(2) Does the company establish standard operation procedures for investigating the complaints received and ensuring such complaints are handled in in a a a a a a confidential manner?
(3) Does the company adopt proper measures to prevent a a a a complainant from retaliation for his/her filing a a a a a a complaint?
Information Disclosure
Does the company disclose its guidelines on business ethics as as well as as information about implementation of such guidelines on on on its website and Market Observation Post System (“MOPS”)?
None
Assessment Item
Implementation Status
Non- implementation and Its Reason(s)
Yes
No Summary
V
V
V
V
V
(1) We expect and and assist our customers suppliers business partners and and any other entities with whom we deal (such as consultant or or third party agents who who act for or or on behalf of TSMC) to understand and and act in accordance with TSMC’s ethical standards For instance as for our suppliers we require all of them to declare
in in in writing that they will not engage in in in any any fraud or any any unethical conduct when dealing with us or our officers and employees In addition to periodic audit we provide training and communicate our our ethical culture to our our suppliers through live seminars to prevent any unethical conduct We exchange views on on appropriate business conduct and and TSMC’s ethical standards with our customers as part of customer audit programs (2) TSMC’s Board of of Directors strives to to perform the the responsibilities of of supervising the the corporate conduct and ethics compliance practice through the Audit Committee and the the Compensation Committee the the hiring of a a a a a a financial expert consultant for the the Audit Audit Committee and coordination with the the Internal Audit Audit department The General Counsel and the Corporate & Compliance Legal Division (which directly reports to the the the General Counsel) promotes with other divisions the the the Company’s ethical standards and and the the the General Counsel reports quarterly to the the the Board on the the the implementation status In addition both the responsible senior manager appointed by the the the CEO to to oversee the the the Ombudsmen system and Internal Auditors update the the the Board on on ethical standards and and compliance issues on on a a a a a a a a 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 and understandable financial financial accounting and and financial financial disclosure in in in in reports and and documents filed by the Company with securities authorities and and in all TSMC public communications and and disclosures (3) TSMC requires newly hired employees to declare
any conflict
of interest situation as appropriate In addition all employees must disclose any matters that have or may have the the appearance of undermining the the Ethics Code (such as any actual or or or potential conflict
of of interest) Furthermore key employees and senior officers must periodically declare
their compliance status with the the Ethics Code according to relevant procedures (4) TSMC continues maintaining the integrity of its financial reporting processes and controls and establishes appropriate internal control control systems for preventing higher potential unethical conduct and the Internal Auditors formulate annual audit plans based on the the results of the the risk assessment and subsequently reports its audit findings and and remedial issues to the Board and and Management on a a a a a a a a a regular basis In addition all departments and subsidiaries of TSMC are also required to conduct Control Self-Assessment (CSA) tests annually to review the the effectiveness of the the internal control system (5) Training is a a a a a major component of our compliance program conducted throughout the year to to to refresh TSMC’s employees’ commitment to to to ethical conduct and to to to get updated information on on on on laws and regulations related to their daily operations As for our our our suppliers we communicate our our our ethical culture to our our our business partners through live seminars to to ensure their fully understanding of our commit to to ethical conduct V
V
V
(1) TSMC’s Audit Committee approved and TSMC TSMC has
implemented the “Complaint Policy and and and Procedures
Procedures
for Certain Accounting and and and Legal Matters” and and and “Procedures for Ombudsman System” that allow employees or or any whistleblowers with relevant evidence to report any financial legal or or ethical irregularities anonymously through either the the the Ombudsman or directly to the the the Audit Committee TSMC also requires all employees to to stay vigilant and whistle-blow any any noncompliance by anyone to to their supervisors the the function head of Human Resources the the responsible corporate Vice President that oversees the the the Ombudsmen system or to the the the Chairman of the the the Company’s Audit Committee directly (2) TSMC treats any complaint and and the the investigation thereof in in in a a a a a a a a confidential and and sensitive manner as is clearly stated in our bylaws (3) TSMC strictly prohibits any any form of retaliation against any any individual who in in in good faith reports or or helps with the investigation of any complaint as is clearly stated in in in our bylaws V
Our internal website provides guidelines and and informative articles on ethics and and honorable business conduct (in both Chinese and English) for employees’ easy access In addition TSMC discloses relevant policies and information in in its Annual Report (which is also available
available
at at the MOPS) and CSR Report (available at: http://www tsmc com)
3 None
4 None
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