Integrity Management
HTC believes that integrity is the cornerstone of sustainable business operation. In order to strengthen integrity management, HTC has established the “Ethical Management Team”, which is responsible for promoting the integrity management policy, anti-corruption, anti-bribery and compliance with laws and regulations and other corporate governance matters, formulating prevention plans and monitoring their implementation, and reporting such implementation to the Board of Directors on an annual basis. 2022 implementation progress has been reported to the Board of Directors on October 31, 2022.
The duties and operations of the Ethical Management Team
In accordance with Article 5 of HTC's “Procedures for Ethical Management and Guidelines for Conduct”, the “Ethical Management Team" is responsible for revising, implementing, interpreting, providing consultation services and filing the reports, and supervising the implementation of the Procedures and Guidelines. The team also prepares and properly maintains documented information on the integrity management policy and its compliance statement, implementation of commitments and enforcement status.
Integrity Management Implementation
I. Establishment of Policies and Guidelines for Integrity Management
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HTC adhere to the core principles when conducting business: fairness, honesty, trustworthiness and transparency. In order to implement the policy of integrity management and to actively prevent dishonest and unethical acts, the Board of Directors has resolved to establish the
"Procedures for Ethical Management and Guidelines for Conduct"
, which specifically regulate the following matters to which HTC and part of its subsidiaries' personnel should pay attention when conducting business:
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1) All personnel of HTC are prohibited from offering or accepting improper benefits and bribes;
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2) HTC and its personnel shall make political contributions in accordance with the Political Contributions Law and shall not use them to obtain commercial benefits or trading advantages;
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3) HTC shall provide charitable donations or sponsorships in accordance with its internal regulations;
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4) Directors of HTC shall recuse themselves from board meetings to avoid conflict of interests in accordance with the law;
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5) HTC’s personnel shall comply with internal intellectual property protection regulations;
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6) Unfair competition and insider trading shall be prohibited;
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7) HTC shall prevent products or services from harming stakeholders;
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8) HTC shall conduct its business activities in a fair and transparent manner based on the principle of integrity.
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In addition to the above, HTC has established the "Code of Conduct" as the guidelines (as below) for HTC employees in carrying out operational activities, and the audit department strictly monitors the formulation and implementation of the integrity management policy and reports to the Board of Directors on a regular basis:
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1) All employees shall treat suppliers, customers and competitors fairly, and shall not obtain improper benefits by conducting unfair trade practices;
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2) All employees shall maintain good relations with customers and suppliers, and shall avoid any unreasonable or unequal terms and conditions when negotiating contract terms with customers and suppliers;
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3) All employees shall not directly or indirectly offer, accept, promise or demand any benefits from customers, vendors or business-related personnel in order to establish business relationships or influence business transactions.
II. Promotion of Integrity Management Policy
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1) New employees of HTC shall sign the employment contracts where they undertake to strictly comply with HTC employee conduct and integrity management policies, and shall not demand, promise, accept bribes or improper benefits from businesses, individuals, or HTC employees who deal with HTC; and shall take appropriate measures when it is necessary to avoid conflict of interests when dealing with counterparties.
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2) Upon arrival, all new employees of HTC are required to participate in mandatory orientation training. Legal compliance program is included in the training materials to strengthen the anti-corruption awareness of new employees.
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3) In year 2022, HTC has conducted an internal awareness raising of the integrity management policy. The material includes the summary of "Procedures for Ethical Management and Guidelines for Conduct" and the "Code of Conduct", and reiteration of employees responsibilities to actively report dishonest and unethical behavior or misconduct, and HTC’s commitment to conduct investigations on the condition that the reporting party’s identity and the report itself are kept confidential.
III. Signing of the Declaration of Integrity
The directors and senior management of HTC are conducting business in accordance with the principles of integrity management, and have signed the declaration of integrity (number of signatories: 25; signing ratio: 100%) to honor their commitments of implementing the integrity management policy.
The directors and senior management have declared in the statement their compliance with the HTC's " Procedures for Ethical Management and Guidelines for Conduct," and pledged that in the course of engaging in business activities, they will not directly or indirectly offer, promise, request, or accept any improper benefits, engage in other illegal or dishonest behavior, or breach their fiduciary duties in order to obtain or maintain benefits. They have also affirmed their adherence to the provisions of Securities and Exchange Act, and will not engage in insider trading using any non-public information known to them or disclose it to others.
IV. Supplier Management
In order to ensure that HTC’s policy of integrity management is implemented externally, HTC requires suppliers and service providers to include their commitment to integrity management in the contracts, including requiring suppliers and service providers to commit to strict compliance with their own and HTC's ethical and moral management policies, prohibiting bribery or improper benefits to HTC's personnel, and reporting to HTC any suspected bribery solicitation by HTC's personnel through the independent reporting mailbox. In addition, HTC shall not solicit or induce HTC’s personnel to leave their jobs or violate their duties.
V. Anti-corruption Mechanism
To prevent potential risks caused by corruption and unethical practices, in addition to the
"Anti-corruption & bribery Statement"
signed by the Chairman of the Board of Directors, HTC has established the "Rules for Derivatives Transaction," "Credit Policy & Operational Procedure," "Regulations for the Appointment of Directors/Supervisors in Re-investment," and revised "Operational Procedures for Transactions of Specific Companies, Business Conglomerates, and Parties," “Regulations on Internal Material Information Handling and Prevention of Insider Trading,” “Regulations on Budget Management,” “Regulations on Subsidiary Management,” and “Regulations on Internal Material Information Handling and Prevention of Insider Trading” as guidelines for internal operation.
We have disclosed the procedures for reporting violations of ethical management policy in the
"Procedures for Ethical Management and Guidelines for Conduct"
and
"Procedures for Reporting and Handling of Violation of Ethical Management Policy"
. These include an independent reporting email ([email protected]) for use by both internal and external personnel, required information for the reports, dedicated investigation units and handling procedures, multiple reported levels of violation, appeal procedures for the person concerned, retention of the report and handling records, protection of whistleblowers and confidentiality of the reports. These measures are put in place to strengthen the efficiency of ethical management policy.
HTC implements an annual risk assessment process that includes ethics-related impact categories. The Legal department and other key stakeholders conduct further analysis from the obtained anti-corruption and ethics-related information. The risk levels identified in recent years have been low, and Legal department and other key stakeholders have conducted management planning for projects that may pose risks, implemented internal training and make anti-corruption statements, and implemented control measures in accordance with stipulated procedures.
