The Board of Directors appointed Ms. Sylvia Fang, the Vice President of Legal and General Counsel of TSMC, as the Corporate Governance Officer responsible for corporate governance matters, including handling of matters relating to Board, Audit and Risk Committee, Compensation and People Development Committee, Nominating, Corporate Governance and Sustainability Committee, and Shareholders’ meetings in compliance with law, assistance in onboarding and continuing education of directors, provision of information required for performance of duties by directors, and assistance in directors’ compliance of law, etc.
The duties performed by the Corporate Governance Office in 2023 are as follows: assisted Chairman of Board of Directors and Committees’ Chairs to convene four Board Meetings, one Special Board Meeting, four Audit and Risk Committee Meetings, one Special Audit and Risk Committee Meeting, four Compensation and People Development Committee Meetings, five Nominating, Corporate Governance and Sustainability Committee Meetings, and 2023 Annual Shareholders’ Meeting; provided continuing education information to directors; provided information required for performance of duties by directors; presented quarterly legal compliance report to the Board of Directors, and timely responded to all Directors’ requests, and etc.
Continuing Education Training of Corporate Governance Officer in 2023
| Name | Date | Host by | Training/Speech Title | Duration |
|---|---|---|---|---|
|
Vice President and General Counsel Corporate Governance Officer Sylvia Fang |
04/07 | Securities and Futures Institute | Advanced Practical Seminar for Board Directors and Supervisors (including Independent Directors) and Corporate Governance Officers–2030/2050 Green Industrial Revolution | 3 hours |
| 04/21 | Taiwan Corporate Governance Association | How Board of Directors Formulate ESG Sustainable Governance Strategies in 2023 | 3 hours | |
| 11/22 | Intellectual Property Office, Ministry of Economic Affairs, R.O.C. Taiwan Association for Trade Secret Protection |
Trade Secret Protection and Management Practice Sharing Forum | 3 hours | |
| 12/01 | Intellectual Property Office, Ministry of Economic Affairs, R.O.C. Taiwan Association for Trade Secret Protection |
Trade Secret Litigation Practice and the Impact of Generative AI on Trade Secret Protection | 3 hours |
Corporate Conduct and Ethics Implementation
TSMC’s Board of Directors strives to perform the responsibilities of supervising the corporate conduct and ethics compliance practice through the Audit and Risk Committee and the Compensation and People Development Committee, the hiring of a financial expert consultant for the Audit and Risk Committee, and coordination with the Internal Audit department. The General Counsel and the Corporate & Compliance Legal Division (which directly reports to the General Counsel) promotes the Company’s ethical standards, and the General Counsel reports quarterly to the Board on the implementation status. In addition, both the responsible senior manager appointed by the CEO to oversee the Ombudsmen system and Internal Auditors update the Board on ethical standards and compliance issues on a regular basis. Moreover, TSMC’s officers, especially our CEO, CFO, and General Counsel, with oversight from our Board, are responsible for the full, fair, accurate, timely, and understandable financial accounting and financial disclosure in reports and documents filed by the Company with securities authorities and in all TSMC public communications and disclosures.
Furthermore, to ensure that our conduct meets relevant legal requirements and the highest ethical standards under the Ethics Code, TSMC provides multiple channels for reporting business conduct concerns. We do not tolerate any violation of the Ethics Code and treat every possible violation incident seriously. Each violator of the Ethics Code (or relevant regulations), for employees, in addition to affecting individual annual performance evaluation, will be severely disciplined to the full extent of our policies and the law, up to and including immediate dismissal, or termination of business relationship for suppliers, and judicial prosecution as appropriate.
The Implementation in 2023
Under the framework of the Ethics Code, TSMC has established a regulatory compliance program that includes policies, guidelines and procedures in other policy areas, including: Corporate Governance, Securities Laws, Anti-corruption, Anti-harassment, Anti-discrimination, Labor Laws, Anti-trust (fair competition), Environmental Protection, Safety and Health, Export Control, Financial Reporting, Insider Trading, Intellectual Property, Proprietary Information Protection, Personal Data Protection, Record Retention and Disposal, as well as procuring certain raw materials from socially responsible sources (Conflict-free Minerals). The above-mentioned policies are crucial in facilitating overall compliance with the Ethics Code. TSMC provided an “Annual Ethics and Compliance Training Course”(mandatory 0.5 hour online course) covering various important regulatory compliance topics and a total of 73,034 employees (including employees in subsidiaries) completed this training course, both completion rate and exam pass rate reaching 100%.
In 2023, TSMC did not receive any reports related to insider trading, money laundering, or other finance, accounting or antitrust matters, nor did we receive any complaints concerning breach of customer privacy and loss of customer data, or any material regulatory violations (where a fine exceeds NT$1 million), including non-monetary sanctions.
In 2023, the incidents reported through the Audit and Risk Committee Whistleblower System, Ombudsman System, and Irregular Business Conduct Reporting System totaled 348. Among them, 218 cases were related to people management/employee relations, 117 cases were categorized as others (e.g., asking personal questions or private matters), and 13 cases were related to ethics. Five incidents were verified upon investigation and determined for disciplinary action by the Ethics Committee. In 2023, TSMC leveraged the five violations to strengthen ethics promotion for employees and suppliers in supplier-related activities.
Intellectual Property
For a long time, TSMC has been protecting R&D innovation and operation development by way of utilizing patents and trade secrets as dual tracks under the established comprehensive IP management system, encouraging Company’s innovation culture, and strengthening Company’s competitive strengths so as to fulfill the Company’s ESG vision. TSMC’s General Counsel updates the Board of Directors on the status of the intellectual property management scheme.
- TSMC received a AAA (the highest tier) certificate by Taiwan Intellectual Property Management System (TIPS) in December 2021, and the valid period will expire after December 31, 2024.
- In terms of patent filings, TSMC has accumulated more than 94,000 patent applications worldwide as of end of 2023, including 8,700+ applications filed in 2023. TSMC ranked No. 2 among global US patent applicants, and No. 1 among patent applicants in Taiwan.
- In terms of patent grants, TSMC has accumulated 62,000+ patents worldwide as of end of 2023, including 6,000 global patents received, ranking No. 3 among U.S. Patentees and No. 1 among patent patentees in Taiwan.
- In terms of patent quality, the allowance rate of TSMC’s U.S. applications reached 100%.
