Ethical corporate management
1. Establishment of ethical management policy and programs

(I) Does the Company have regulations and publicly available documents addressing its ethical management policy and measures, and the commitment regarding implementation of such policy from the board of directors and the management team?

Operating condition: Yes

The Company has stipulated “Ethical Corporate Management Best Practice Principles” on April 26, 2011, and the “Corporate Governance Best Practice Principles” on December 18, 2020, under the approval of the board of directors. The Principles have clearly stated the policies and practices of ethical corporate management of the Company, as well as the commitment of the board of directors and management team to actively implement these policies.

 

(II) Does the Company establish an unethical conduct risk evaluation mechanism to regularly analyze and evaluate the business activities that are considered to have higher risks of unethical conduct, as well as formulate preventive measures for unethical conducts? Also, do these measures encompass preventive measures as described in paragraph 2, article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?

Operating condition: Yes

The Company’s “Ethical Corporate Management Best Practice Principles” and “Corporate Governance Best Practice Principles” clearly state solutions to prevent unethical conduct. The Company also has a sound whistleblower and punishment system and channel:

1. Internal whistleblower channels include: (1) Direct supervisor (2) Head of HR (3) Legal affairs unit (4) Auditors (5) President’s email.

2. External whistleblower channel is the Company’s “Business Management Division as well as Legal Affairs and Legal Compliance Office”. You may contact us via the “Business Ethics Whistleblower System” on the Company’s official website (www.cmmt.com.tw). Suppose a report of an unethical incident has been received. In that case, the Company will convene a review meeting consisting of senior executives from different units to address the issue according to internal regulations. If the culprit is a manager, the Company will report the matter to the board of directors in addition to resolving the problem according to regulations.

 

(III) Does the Company establish relevant policies which are duly enforced to prevent unethical conduct and provide implementation procedures, guidelines, the consequence of violation, and complaint procedures in such policies?

Operating condition: Yes

1. The Company promotes corporate governance and business ethics concepts via weekly meetings or unscheduled meetings. If unethical incidents have taken place, the Company will convene a review meeting consisting of senior executives from various units.

2. The Company has formulated the “Ethical Corporate Management Best Practice Principles” and “Corporate Governance Best Practice Principles” targeting business activities with higher risks of unethical conduct to prevent taking and offering bribes, as well as illegal political donations.

2. Implementing ethical corporate management

(I) Does the Company assess the ethics records of whom it has a business relationship with and include business conduct and ethics-related clauses in the business contracts?

Operating condition: Yes

Besides assessing the legality of our business partners before engaging in business activities, we also conduct credit assessments to avoid transactions with unethical suppliers. Furthermore, the board of directors approved the “Procedures for Ethical Management and Guidelines for Conduct” on November 11, 2015, including “Exemption from Notification for Gifts from Suppliers and Clients”, Supplier Statement of “Ethical Conduct”, and Employee “Integrity Agreement” materialize ethical conducts and corporate governance.

 
 

(II) Does the Company set up a unit dedicated to or tasked with promoting the Company’s ethical management that reports to the Board of Directors periodically on relevant matters?

Operating condition: Yes

A unit dedicated to or tasked with promoting the Company’s ethical management: Business Management Division

※Unit operation:

1. The Company has appointed the “Business Management Division” as the responsible unit (hereinafter referred to as Company’s dedicated unit) for the revision, execution, elaboration, consultation service, and report of ethical management, as well as recording, filing of reports, and supervision. The unit regularly reports to the board of directors.

2. If the Company’s staff (including directors, managers, employees, and those with controlling power) offers or promises to offer bribes because of threats or intimidation, he or she shall record the process and report to the immediate supervisor, as well as notify the Company’s dedicated unit. Upon the receipt of the report under the preceding paragraph, the Company’s Dedicated Unit shall handle the matter immediately and undertake a review of relevant matters to minimize the risk of reoccurrence. In a case involving alleged illegality, the dedicated unit shall immediately report to the relevant judicial agency. To fulfill our duties of supervision and ensure ethical management, the Company’s board of directors has established various organizations and channels such as the Audit Committee, Remuneration Committee, financial experts affiliated to the Audit Committee, internal audit, legal compliance, and legal affairs, etc. The Finance Department and internal audit also report the execution status to the board of directors regularly. The Company’s managers - particularly the President and CFO - must ensure the financial and accounting information disclosed by the Company to the competent securities authority or other external organizations under the supervision of the board of directors is complete, fair, accurate, up-to-date, and easy to understand.

 

(III) Does the Company establish policies for preventing conflicts of interest, provide appropriate communication, complaint channels, and implement such policies properly?

Operating condition: Yes

The Company’s “Corporate Governance Best Practice Principles” stipulate that the stakeholders should avoid a conflict of interest. Transaction contracts between the Company, affiliated enterprises, and shareholders must be bound by the principle of fairness; matters where shareholders and directors with controlling power have a personal interest must be conducted in accordance with the aforementioned principle, and transfer of benefits is strictly prohibited.

 

(IV) To implement ethical management policies, does the Company establish effective accounting and internal control systems? Are relevant audit plans devised based on the unethical conduct risk evaluation outcome conducted by the internal audit unit, and are the plans used to check compliance with the unethical conduct prevention solutions, or does a CPA verify them? Operating condition: Yes

The Company has implemented an effective accounting system and internal control mechanism based on ethical management. The systems are regularly reviewed by the internal audit unit and accountants from PwC Taiwan.

 

(V) Does the Company provide internal and external ethical management training programs regularly?

Operating condition: Yes

The Company regularly hosts internal ethical management education and training and participates in external corporate governance and ethical management-related courses organized by the competent authorities and the banking industry.

3. Status of the Company’s whistleblowing mechanism

(I) Does the Company establish specific complaint and reward procedures, set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received?

Operating condition: Yes

The Company’s whistleblower system is stated in Chapter 7 of the “Employee Code of Ethics and Business Conduct” The Company’s whistleblower channels:

1. Internal whistleblower channel includes (1) Direct supervisor (2) Head of HR (3) Legal affairs unit (3) Auditors (4) President’s email.

2. External whistleblower channel is the “Company’s Business Management Division as well as Legal Affairs and Legal Compliance Office”. You may contact us via the Business Ethics Whistleblower System on the Company’s official website (www.cmmt.com.tw).

 

(II) Does the Company establish standard operating procedures for investigating the complaints received and ensuring such complaints are handled in a confidential manner?

Operating condition: Yes

Documented in Chapter 7 “Whistleblowing, Protection, and Immunity” of the Company’s “Employee Code of Ethics and Business Conduct”.

 

(III) Does the Company adopt proper measures to prevent a complainant from retaliation for filing a complaint?

Operating condition: Yes

Documented in Chapter 7 “Whistleblowing, Protection, and Immunity” of the Company’s “Employee Code of Ethics and Business Conduct”.

4. Reinforce information disclosure

(I) Does the Company disclose its ethical management guidelines as well as information about the implementation of such guidelines on its website and MOPS?

Operating condition: The “Ethical Corporate Management Best Practice Principles” is published on the Company website (www.cmmt.com.tw) for our employees to browse and download. Relevant information is disclosed on the Company’s website or announced on MOPS according to the law.

5. If the Company has established its ethical management guidelines based on “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please describe any discrepancy between the policies and their implementation

None

6. Other important information to facilitate a better understanding of the Company’s corporate conduct and ethics compliance practices (e.g., review the Company’s corporate conduct and ethics policy):

The Company has always upheld ethical management, and we have formulated the [Code of Ethical Conduct for Directors (Including Independent Directors) and Managers] and [Employee Code of Ethics and Business Conduct], while the Company has also stipulated “Ethical Corporate Management Best Practice Principles” on April 26, 2011, the “Corporate Governance Best Practice Principles” on May 12, 2011, and the “Procedures for Ethical Management and Guidelines for Conduct” on November 11, 2015, under the approval of the board of directors. The execution status of ethical management is reported to the board of directors regularly.

The Company has specified in its rules and external documents the ethical corporate management policies and practices adopted by the board of directors and the Company staff (including directors, managers, employees, and those with controlling power) in rigorously enforcing the business policies.