(I) Has the Company established an ethical management policy that has been passed by its board of directors, and clearly specified in its rules and external documents the ethical corporate management policies and the commitment by the board of directors and senior management on rigorous and thorough implementation of such policies and methods?
Operating condition: Yes
To CMMT, ethical management is the core value of the Company's operation and a sound corporate culture. In view of the fact that many incidents violating the principles of ethical management have caused great losses to companies and stakeholders, the Company engages in business activities based on principles of fairness, honesty, trustworthiness and transparency, and promotes the culture of top-down ethical management, which is also an indispensable part of the sustainable management that CMMT strives to implement.
On April 26, 2011, the Company stipulated its "Ethical Corporate Management Best Practice Principles", which was amended on February 18, 2023 at the Board of Directors' approval. On November 11, 2015, the Company stipulated the "CMMT Ethical Management Procedures and Conduct Guidelines" as approved by the Board of Directors, which was amended on February 18, 2023. The "Corporate Governance Best Practice Principles" was also amended at the Board of Directors' approval on February 18, 2023, in which 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 are clearly stated.
(II) Has the Company established a risk assessment mechanism against unethical behavior, analyzed and assessed business activities within their business scope on a regular basis which are at a higher risk of being involved in unethical behavior, and established prevention programs at least covering the preventive measures specified in Paragraph 2, Article 7 “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”?
Operating condition: Yes
The Company’s “Ethical Corporate Management Best Practice Principles” and “Corporate Governance Best-Practice Principles” specify the means to prevent unethical conducts. The Company has a comprehensive complaint and disciplinary system, reporting and complaint channels:
1. Internal reporting channels include:
(1) Direct supervisor (2) HR supervisor (3) Legal unit (4) Audit personnel (5) President’s mailbox.
2. The external reporting channel is the Company’s “Management Office and Legal and Compliance Office”, which can be reached though the “Reporting System for Unethical Conduct” on the official website www.cmmt.com.tw . Upon receiving an unethical conduct complaint, the Company will carry out an evaluation meeting made up of senior executives from different units and handles the complaint in accordance with related internal operational regulations. Where the level of disciplinary action involves a managerial officer, not only does the Company handle the situation in accordance with related regulations; it will also be reported to the board of directors. Recently it is reported to the board on March 16, 2022.
(III) Has the Company specified operational procedures, behavioral guidelines, disciplines of violations, as well as an appeal system in the program against unethical behavior, and implemented such programs, and reviewed and revised the previous program on a regular basis?
Operating condition: Yes
1. Corporate governance and ethical management are promoted through weekly meetings or non-scheduled meetings. Where there is a violation of ethical conduct, the Company will carry out an evaluation meeting made up of senior executives from different units.
2. The Company has formulated the “Ethical Corporate Management Best Practice Principles” and “Procedures for Ethical Management and Guidelines for Conduct” aiming to prevent bribery, accepting bribes and illegal political contributions for business activities with a higher risk of unethical conduct within the scope of business.
(I)Does the Company evaluate the integrity of all counterparties it has business relationships with? Are there any integrity clauses in the agreements it signs with business partners?
Operating condition: Yes
Before establishing a business relationship, the Company first evaluates the legitimacy of its business partners and performs credit evaluations in order to avoid dealing with unethical business parties. Furthermore, the board of directors approved the “Procedures for Ethical Management and Guidelines for Conduct” on February 17, 2022, 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) Has the Company set up a dedicated responsible unit to promote corporate ethical management under the board of directors, and has such unit reported its execution in terms of ethical management policy and preventive programs against unethical behaviors and the supervision status to the board of directors on a regular basis (at least once a year)?
Operating condition: Yes
Dedicated responsible unit to promote corporate ethical management: Operations Management Office
※Operation of the established unit:
1. The Company has designated the “Operations Management Office” as the dedicated unit (hereinafter referred to as the “Company’s dedicated unit”) to handle matters associated with corporate ethical management covering the amendment, implementation, explanation, consultation services, notification content, and filing as well as supervising their execution, which is reported to the board of directors on a regular basis.
2. If the Company’s personnel (directors, managerial officers, employees and persons with substantial control over the Company and the organization) offers or promises to pay for the facilitation in the face of threats or intimidation, they shall record the process and report it to the departmental supervisor, while also informing the Company’s dedicated unit. After being informed of the aforementioned situation, the Company’s dedicated unit shall handle it immediately. Related issues must also be reviewed to reduce the risk of recurrence. In the event of an unlawful activity, the judicial authorities must be notified immediately. As a means to fulfill the supervisory responsibility of ethical management, the Company’s board of directors has set up various organizations and channels, including the audit committee, remuneration committee, financial experts under the audit committee, internal audits, legal compliance and legal affairs. The Company’s finance department and internal auditors also report regularly to the board of directors on the state of the relevant implementation. Under the supervision of the board of directors, the Company’s managerial officers, especially the presidents and CFO, must ensure that the financial accounting information reported by the Company to the securities authorities or disclosed externally is complete, fair, accurate, up-to-date and easy to understand.
The ethical management policies and operations for 2022 were reported to the Board of Directors for approval on March 13, 2023.
The annual work plan and main duties are as follows:
1. Assisting in incorporating ethics and moral values into the Company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
2. Analyzing and assessing on a regular basis the risk of involvement in unethical conduct within the business scope, adopting programs accordingly to prevent unethical conduct, and setting out in each program the standard operating procedures and conduct guidelines with respect to the Company's operations and business.
3. Planning the internal organization, structure, and responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conduct.
4. Promoting and coordinating awareness-raising and educational activities with respect to ethics policy.
5. Developing a whistle-blowing system and ensuring its operating effectiveness.
6. Assisting the board of directors and management in auditing and assessing whether the preventive measures taken for the purpose of implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.
7. Preparing and retaining properly documented information, such as ethical management policy and compliance statements, and situations concerning the performance of commitments and implementation.
The Company's policy of ethical management has been implemented in accordance with corporate governance, business strategies and operating procedures, and the specific practices of ethical management are as follows:
1. A total of 583 participants took part in the insider trading prevention education and training program for all employees.
2. The directors and senior management of the Company have signed the "Declaration of Compliance with the Ethical Management Policy".
3.The Company has established internal and external reporting channels and ad hoc groups with investigation reports and tracking management mechanisms for reported cases.
4. In 2022, the Company had 0 complaints and prosecutions.
(III) Does the Company have any policy that prevents conflict of interest, and channels that facilitate the reporting of conflicting interests?
Operating condition: Yes
The Company’s “Corporate Governance Best-Practice Principles” stipulates that stakeholders must recuse themselves due to conflicts of interest. Transactions between the Company and its affiliated enterprises and shareholder transactions shall be based on the principle of fairness. Corporate shareholders and directors with control over their own interests shall be handled in accordance with the above rules ,and transferring of benefits is strictly prohibited.
(IV)Has the Company established an effective accounting system and internal control system in order to implement ethical management, and propose relevant audit plans according to the assessment results of the risks of unethical behaviors, and review the compliance status of the prevention of unethical behaviors, or entrust an account to carry out the review?
Operating condition: Yes
In an effort to implement ethical management, the Company has set up an effective accounting system and internal control system. These systems are regularly audited by the internal audit unit as well as the entrusted CPAs of PwC Taiwan.
(V) Does the Company organize internal or external training on a regular basis to maintain ethical management?
Not only does the Company organize internal ethical management education and training, related courses organized by the competent authorities and banks concerning corporate governance and ethical management are also attended.
(I) Does the Company have a specific whistleblowing and reward system stipulated, a convenient report channel established, and a responsible staff designated to handle the individual being reported?
Operating condition: Yes
The reporting system is stipulated in Chapter 7 of the Company’s “Code of Ethical Conduct for Employees”. The Company’s whistleblowing channels:
1. Internal whistleblowing channels include: (1) Direct supervisor (2) HR supervisor (3) Legal unit (3) Audit personnel (4) President’s mailbox.
2. The external whistleblowing channel is the Company’s “Management Office and Legal and Compliance Office”, which can be reached though the “Reporting System for Unethical Conduct” on the official website www.cmmt.com.tw.
(II)Has the Company implemented any standard procedures, subsequent measures after carrying out an investigation, and confidentiality measures for handling reported misconduct?
Operating condition: Yes
“Whistleblowing, Protection and Exemptions” are stipulated in Chapter 7 of the Company’s “Code of Ethical Conduct for Employees”.
(III) Has the Company taken appropriate measures to protect the whistle-blower from suffering any consequences of reporting an incident?
Operating condition: Yes
“Whistleblowing, Protection and Exemptions” are stipulated in Chapter 7 of the Company’s “Code of Ethical Conduct for Employees”.
(I) Does the Company have the contents of ethical corporate management and its implementation disclosed on the website and MOPS?
The Company’s “Ethical Corporate Management Best Practice Principles” is disclosed on its official website (www.cmmt.com.tw) for employees to review/download at any time. Additionally, related information is also disclosed on the Company’s website or on MOPS as per legal requirements, achieving the facilitation effect.
None
The Company operates with integrity and has formulated the “Codes of Ethical Conduct for Directors (Including Independent Directors) and Managerial Officers” and “Code of Ethical Conduct for Employees”. On April 26, 2011, May 12, 2011, and November 11, 2015, the Company’s board of directors passed the “Ethical Corporate Management Best Practice Principles”, the “Corporate Governance Best Practice Principles”, and the “Procedures for Ethical Management and Guidelines for Conduct”, respectively. The implementation status is periodically reported to the board of directors.
The above codes clearly stipulate the policy and practice of ethical management in the Articles of Incorporation and external documents to achieve the effect that the board of directors and the Company’s personnel (directors, managerial officers, employees and persons with substantial control over the Company or the organization) are doing their utmost in implementing the management policy commitments.
