Annual Reports  >  2013  >  Corporate Governance > Regulatory Compliance
Regulatory Compliance
繁中

TSMC is committed to conducting business honestly and ethically. This commitment to integrity, our most basic and most important core value, has been the cornerstone of TSMC’s robust compliance efforts, which is comprised of legislation monitoring, compliance policies, training and an open reporting environment.

TSMC operates in many countries. Therefore, in order to achieve compliance with governing legislation, applicable laws, regulations and regulatory expectations, we closely monitor domestic and foreign government policies and regulatory developments that could have a material impact on TSMC’s business and financial operations. We are also a proactive advocate for local legislative and regulatory reform and have achieved remarkable results in strengthening trade secret protection in Taiwan. TSMC is increasingly dedicated to identifying regulatory issues and will continue to be involved in advocating public policy changes that foster a positive and fair business environment.

In addition to TSMC’s Code of Ethics and Business Conduct, TSMC has also established policies, guidelines and procedures in other policy areas, including: Anti-bribery/corruption, Anti-harassment/ discrimination, Antitrust (unfair competition), Environment, Export Control, Financial Reporting/Internal Controls, Insider Trading, Intellectual Property, Proprietary Information Protection (“PIP“), Privacy, Record Retention and Disposal, as well as procuring raw materials from socially responsible sources (“Conflict-free Minerals“). With respect to PIP, it is one of the six key corporate strategies of TSMC (as announced in June 2010). TSMC and its employees are expected to comply with all laws and regulations that govern our businesses.

Training is a major component of our compliance program, conducted throughout the year to refresh TSMC’s employees’ commitment to ethical conduct, and to get updated information on any changes to the law. Highlights of our compliance training program include the following:

  • A wide range of on-line learning programs are designed to provide employees with an understanding of the law and key compliance issues. Topics available via on-line learning including Antitrust, Anti-harassment, Insider Trading, Export Control Management, PIP, to name just a few. The Antitrust course addresses common elements in antitrust and competition law that apply in the major jurisdictions in which we operate. It was updated in 2013 to add summaries of recent international antitrust investigations, enforcement trend and court rulings. In combination with promotional campaigns, we have successfully raised awareness of improper behavior associated with antitrust laws in 2013.
  • Live seminars are also offered for a variety of topics related to: Anti-bribery/corruption; Anti-harassment and discrimination; PIP; Insider Trading; Export Control; Financial Reporting; Contract Management; Intellectual Property; Conflict-free Minerals; and Privacy Law. A series of Export Control courses was introduced in 2013 to give an overview to TSMC’s export management system (“EMS“) and to introduce TSMC’s updated export control policy. The above courses are mandatory to managers and certain employees depending on the nature of the business activities they perform.
  • As directed by our General Counsel, members of TSMC’s legal team regularly attend outside training in Taiwan and abroad to receive legal updates and stay current with new laws and regulatory developments. External legal professionals and industry experts are constantly invited to lecture on new areas of knowledge and the latest developments on industry-specific compliance matters. Licensed lawyers, including the General Counsel, maintain compliance with continuing legal education requirements of their licensing jurisdictions.
  • To enhance compliance and risk management for our subsidiaries and affiliates, we regularly hold compliance meetings with them to ensure that all of our subsidiaries and affiliates (as appropriate) are aligned with the compliance standards of TSMC headquarters.

In addition to the above programs, a variety of resources and compliance campaigns are made available to our employees. For example, compliance education and articles on different topics are published regularly on TSMC’s Legal Organization website. Furthermore, employees can familiarize themselves with TSMC’s internal policies through easy access to our intranet channels.

To ensure that our conduct meets the highest legal and ethical standards, TSMC provides multiple resources for reporting business conduct concerns. We encourage employees to report suspected wrongdoing within the organization or any parties with whom we do business. The system is also open to external reporting. Auditing employees for PIP policy compliance is conducted regularly to ensure protection of TSMC’s proprietary information, including information that suppliers, customers and others have entrusted to us. Disciplinary actions are taken against employees who have violated the policy. Below is a summary of the Number of Reported Incidents:

 

FY 2012

FY 2013

Incidents Submitted to the Ombudsman System (Note 1)

20

35

Incidents Submitted to the Audit Committee Whistleblower System

-

-

Incidents Reported to the “Hotline“
 which were treated as plausible

8

19

3

1

Sexual Harassment Investigation Committee
 which were found after investigations

6

7

-

5

PIP Violations
 which resulted in warnings (Note 2)
 which resulted in dismissals

108

84

104

84

4

-

Note 1: There is no case for ethics, finance and accounting matters.
Note 2: More than one-third of the cases reported were for minor errors or noncompliance with our PIP Policy.

Major Accomplishments

In 2013, TSMC’s excellence in regulatory compliance achieved several major accomplishments, including:

  • In addition to rigorously fulfilling our obligations to regulatory compliance matters, TSMC has discharged its civic duties as a responsible corporate citizen by advising the local government on law and policy reform. TSMC regularly urged the Government to amend any outdated laws and regulations, which may be inconsistent with global practice to improve our investment environment and economic development. For example, after Taiwan’s legislature accepted TSMC’s advice of imposing criminal liability on trade secret misappropriation in 2012, TSMC continued to be a strong advocate for heightening trade secret protection in 2013. We have been working closely with the relevant authorities, and provided our recommendations to subsequent reinforcement of relevant laws and regulations.
  • Throughout 2013, TSMC offered a wide range of education courses on various compliance topics, including 19 topics via on-line education and 36 topics via live seminars. These courses were developed and conducted by compliance and legal professionals. TSMC will regularly review and update our training programs and identify additional areas of training if necessary.
  • In order to prevent any unauthorized export of controlled items, a formal system, namely EMS, has existed for a number of years and continuously updated and sustained to reinforce TSMC’s internal compliance measures, which measures are taken to ensure compliance by TSMC and all of its subsidiaries with all applicable regulations covering the export of information, technologies, products, materials and equipment. TSMC’s EMS allows TSMC to streamline its complicated SHTC (Strategic High-Tech Commodities) export process and creates efficiency for both TSMC and its customers. TSMC’s EMS was certified in September 2012 by the Bureau of Foreign Trade, the Taiwan regulator, as a qualified ICP (Internal Control Program) exporter. The successful implementation of TSMC’s EMS also earned recognition by Dutch export control authority as best in class during its audit of TSMC’s European subsidiary in March 2013.
  • To reflect and reinforce TSMC’s values of integrity, globalization, caring for employees and shareholders, and being a good corporate citizen, TSMC took measures to comply with the Personal Information Protection Act of Taiwan that became effective in 2012. We prepared a privacy policy that provides TSMC and its worldwide subsidiaries with global standards for handling personal data and respecting personal privacy in the workplace. Furthermore, to educate TSMC individuals about the restrictions and procedures applicable to handling personal data and respecting personal privacy in the workplace, TSMC rolled out several privacy awareness initiatives. For example, TSMC developed a variety of training programs, including seminars, in-person training programs, and e-learning courses, which describe the policies and guidelines for individuals to follow when handling personal data. Through its assertive privacy promotional campaigns, TSMC is dedicated to bring awareness of the issues surrounding data protection and privacy to its employees and to create a culture whereby an individual’s personal data and privacy are protected and handled in line with global standards.