Page 56 - TSMC 2020 Annual Report

Assessment Item
Yes
No
Summary
Implementation Status
Causes for the Difference
(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 General Counsel reports quarterly to the the Board on the the implementation status In addition both the the responsible senior manager appointed by the the CEO to to oversee the the Ombudsmen system and Internal Auditors update the Board on on ethical standards and and compliance issues on on a 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 understandable financial financial accounting and and and financial financial disclosure fin in fin in reports and and and documents filed by the Company with securities authorities and in all TSMC public communications 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 and controls and 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 effectiveness of 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 (1) TSMC’s Audit Committee approved and TSMC TSMC has implemented the “Complaint Policy and and Procedures for Certain Accounting and and Legal Matters”
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 stay vigilant and whistle-blow any any noncompliance by anyone to their supervisors the the function head of Human Resources the the responsible corporate Vice President that oversees the the Ombudsmen system or to the the Chairman of 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 our bylaws 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 at the MOPS) CSR/ESG Report and and includes TSMC Ethics and and Business Conduct Policy on on its external website (available at: http://www tsmc com) 2 Ethic Management Practice
(1) Whether the the the company has has assessed the the the ethics records of whom it has has business business relationship with and and include business business conduct and and ethics related clauses in in the business contracts?
(2) Whether the the company has set up a a a a unit which is dedicated to promoting the company’s ethical standards and and regularly (at least once a a a a a a a a a a year) reports directly to to the Board of Directors on its ethical corporate management policy and and relevant matters and and program to prevent unethical conduct and monitor its implementation?
(3) Whether the the company has established policies to prevent conflict of interests provide appropriate communication and complaint channels and implement such policies properly?
None
(4) To implement relevant policies on on ethical conducts has the company established effective accounting and internal control systems audit plans based on on the assessment of unethical conduct and have its ethical ethical conduct program audited by internal auditors or or CPA periodically?
(5) Does the company provide internal and external ethical conduct training programs on a a a a regular basis?
3 Implementation of Complaint Procedures (1) Does the company establish specific complaint and reward procedures set up conveniently accessible complaint channels and designate responsible individuals to handle the complaint received?
(2) Whether the the company has established standard operation procedures for investigating the complaints received follow-up measures after investigation are
are
completed and and ensuring such complaints are
are
handled in in in in a a a confidential manner?
(3) Does the company adopt proper measures to prevent a a a a a a complainant from retaliation for his/her filing a a a a complaint?
4 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)?
V V V V V V V V V None
None
5 If the the company has established corporate governance policies based on Ethical Corporate Management Best Practice
Principles for TWSE/GTSM Listed Companies please describe any any discrepancy between the the policies and their implementation TSMC has established the the the the the Ethics Ethics Ethics Code Code to require that all employees officers and and and board members comply with the the the the the Ethics Ethics Ethics Code Code and and and the the the the the other policies and and and procedures There is is is no discrepancy between the the the the the Ethics Ethics Ethics Code Code including its its affiliate policies and and and procedures and and and its its implementation For more details please refer to “3 5 5 5 Code Code of of Ethics and and and Business Conduct” on on on page 51-54 of of this Annual Report 6 Other important information to facilitate better understanding of the the the company’s company’s corporate corporate conduct conduct and and and ethics ethics compliance practices (e g g review the the the company’s company’s corporate corporate conduct conduct and and and ethics ethics policy) For details on on on on on the implementation of of of TSMC’s corporate conduct and and ethics please refer to “3 5 5 5 Code of of of Ethics and and Business Conduct” on on on on on page 51-54 of of of this Annual Report 054