HTC 2015 Annual Report Download - page 48

Corporate governance
Corporate governance
92
93
Item
ImplementationStatus Reason for Non-
implementation
Yes No Summary
2. Enforcement of ethical corporate management
(3) Whetherthecompanyhasadoptedthepolicies
for preventing conflicts of interest and offering
appropriate channels for stating opinions, and the
operationthereof?
V HTC has set out high ethical standards in its employee code of conduct
Additionally, in its employment agreements and employee handbook, it
expressly stipulates non-competition provisions for the period of employment,
to prevent conflicts of interest. Unit supervisors and internal auditors can
investigate and audit any questionable conduct in line with these policies.
Also,initsRulesofProcedureforBoardofDirectorsMeetings,ithasdulyset
out a system for recusal and avoidance of conflicts of interest by directors, for
compliance in the operations of the board of directors.
HTC also has established channels for statements of opinions and reports
of violations, by which employees may report any questionable conduct
discovered.
None
(4) Whether the company establishes and operates the
effective accounting systems and internal control
systems for the enforcement of ethical corporate
management, and of audits periodically by internal
auditorsoraccountingfirms?
V HTC has established an accounting system that takes into account the
characteristics of its industry and is based on applicable laws and regulations
and generally accepted accounting principles. The system provides a basis for
compliance in HTC's accounting affairs (including the types and formats of
accounting evidence, account books, accounting classifications, and financial
statements, and the rules and procedures for handling various kinds of
accounting matters).The system enables the regular provision of reliable
accounting information for reference by the management. The implementation
of the operational procedures and rules of the accounting system ensures that
HTC's business operations proceed according to rigorous procedural rules, with
mutual checking and reconciliation between various operations, to prevent any
occurrence of abuses, ensuring the security of HTC's assets.
HTC has taken into account its overall operational activities in designing and
faithfullyimplementingitsinternalcontrolsystem.Itregularlyreviewsthe
internal control system to ensure the continued effectiveness of its design and
implementation in light of changes in HTC's internal and external environment.
The internal auditors conduct scheduled or unscheduled site audits of audited
units according to internal audit plans, and may require audited units to present
documents, account books, and evidence to conduct document audits. When
necessary, they also may conduct special audits of specific matters, and compile
their work papers and related materials into reports and submit them to the
board of directors.
None
(5) Whether the company holds internal or external
educationandtrainingoperationsperiodically?
VPertheCodeofConduct,HTCwillholdnewemployeeorientationandask
employees to review the code periodically to prevent unethical conduct.
None
3.Statusofreportingsystemforthecompany
(1) Whether the company has adopted a system for
reporting and rewarding , established a channel
convenient for reporting, and assigned appropriate
staffs responsible for handling issues for the
reportedparties?
V HTC's employee handbook specifically provides that an employee who commits
fraud, accepts bribes, misappropriate funds, or violates employmentperiod
non-competition clauses will be sanctioned by dismissal from employment.
Complaints can be channeled through HTC's internal division
supervisors,human resources division, and internal auditors. Disciplinary
measures are administered by the human resources department. HTC also has
established channels for statements of opinions and reports of violations, by
which employees may report any questionable conduct discovered.
None
(2) Whether the company has adopted a standard
operating procedure for investigation of the
reported matters, as well as relevant rules regarding
confidentiality?
V The company has adopted operating procedures and rules regarding
confidentiality for investigation of the reported matters. Upon acquisition
of relevant evidences, HTC will set up an investigation team to carry out
corresponding procedures with a responsibility for maintaining
None
(3) Whetherthecompanyhasadoptedmeasuresfor
protecting reporting parties from inappropriate
treatmentbecauseoftheiractsofreporting?
V HTC has a dedicated email: [email protected]
Employees can use the email to report the case to the company with provision
of relevant evidences. HTC will have its team carry out investigation with the
reporting parties placed under protection.
None
4. Strengthening information disclosure
(1) Whether the company builds the website and
announcesonMOPSforinformationdisclosure
related to ethical corporate management principles
andeffects?
V HTC discloses its Code of Conduct on its investor's website both in Chinese and
English, the Corporate Responsibility webpage also discloses Supplier Code of
Conduct. Supplier's business shall be ethical.
None
(Continued)
Item
ImplementationStatus Reason for Non-
implementation
Yes No Summary
5. HTCdoesnotproduceaEthicalCorporateManagementBestPracticePrinciplespertheEthicalCorporateManagementBestPracticePrinciplesforTWSE/GTSM-Listed
Companies. HTC adopted Code of Conduct to provide high ethical standards for all employees in conducting HTC business activities. All employees of HTC Corp., including
branchesandsubsidiarycompanies,mustfollowtheseethicalstandardsregardlessoftheemployees'position,gradelevel,andlocation.ThisCodeincludesthreemajor
sections:theGeneralMoralImperative,Vendors/SuppliersandCustomersRelationship,andConflictofInterests.
6. OtherimportantinformationhelpfultounderstandingHTC'sexerciseofgoodfaithinmanagement:
HTChasalwaysupheldthefivemajoridealsofhonesty,humble,simplicity,energy,andinnovationasitshighestcriteriaforoperations.Everyonewithinthecompany,from
the highest levels to the lowest, is asked to strictly uphold the spirit of these five ideals, as well as abiding by all laws, regulations, and rules. HTC has also formulated internal
rules to ensure the exercise of good faith in management and the observance of laws and regulations.
(7) For information on HTC's Guidelines for Corporate Governance and
other codes of practice, please refer to the HTC website at www.htc.com.
(8) Other important information helpful to understanding HTC's corporate
governance:
HTC has continued to examine and revise or adopt new rules and procedures which will enhance the efficiency of
its operations and strengthen risk management and corporate governance. Over the recent years, in line with the
formulation or amendment of relevant securities laws and regulations, and in consideration of operational needs, HTC
hasadoptedorrevisedits“ProceduresforBoardofDirectorsMeetings”,“ProceduresfortheAcquisitionorDisposal
ofAssets”,“ProceduresfortheHandlingofDerivativesTrading”,“CorporateGovernancePrinciples”,“Procedures
forShareholders'Meetings”,“BylawsfortheElectionofDirectorsandSupervisors”,and“CompensationCommittee
Charter”.Inaddition,ithasalsoadoptedthe“DetailedGuidelinesfortheHandlingofDerivativesTransactions”,“Credit
PolicyandOperationProcedures”,and“RulesforAssignmentofDirectorsandSupervisorsatInvesteeCompanies”,and
revise implementation rules that guide its internal operations, such as the“Specific Companies, Enterprise Groups and
RelatedParties”,“BudgetManagementProcedures”,“CorporateBylawsforSubsidiaries”and“OperationalProcedures
forHandlingMaterialInsideInformation,andPreventionofInsiderTrading”.