Ethical Corporate Management

The company supports the principle of ethical corporate management for various business operation and corporate culture implementation.

Whistleblowing Channel
Implementation Status
Specific Measures for Ethical Management in 2022 - 2023

Whistleblowing Channel

UMC has whistleblowing procedures to detect, prevent and avoid major misconduct and also encourage open communication with employees and related parties in real name or anonymously.

 

The whistleblower provides contact information (including but not limited to phone number and email address), which can identity the whistleblower, the accident initiated and specific evidences for the follow-up investigation process.

 

When the company receives a report, it will form a special team to investigate the suspected illegal acts (including corruption) and unethical behavior. The investigation process will be handled in accordance with relevant laws and the company's internal regulations. The related reports and any investigation documents, evidence, records, and/ or recordings shall be kept for five years by the responsible party.

 

If any illegal activities or unethical behaviors are found during investigation, the company may make appropriate improvements, administer sanctions and/or take legal actions; the whistleblower will also be awarded appropriately.

 

The investigation is conducted in a confidential manner. In order to avoid improper retaliation and treatment, the company protects the employees or third parties that report and participate in the investigation.

 

In order to increase the awareness of UMC’s employees to avoid improper behavior, the company shall provide regular education and training to employees on UMC’s Employee Code of Conduct, Code of Ethical Conduct and other relevant employee codes and regulations.

 

 

Reporting Channel

Mail Box

  • Reporting a violation of the Code of Conduct or engagement in fraud : Send an email report to the email addresswhistleblower@umc.com , which will then automatically forward a copy of the report to the Audit Committee, ADT Level 1 Manager, HR Level 1 Manager, and Global Compliance Level 1 Manager.
  • CHO E-mail : UMC_CHO_Mailbox@umc.com
  • Document complaint: formal document complaint (the Company will assemble an investigation team to conduct a thorough inquiry into the allegations).
  • Report of sexual harassment and unfair treatment :31995@umc.com
  • Employment relationship ,management rule and human right issues : e-suggestion
  • Information security and confidentiality protection : Infosec@umc.com
  • CSR E-mail :csr@umc.com

Hot Lines

  • Report of sexual harassment and unfair treatment : 31995
  • Employee Relationship (ER Service) Hotline : 12885
  • Reporting of information security : 31777

Ombudsman

If any violations of UMC code of conduct regarding different issues occur, the company has specific ombudsman to handle the issues, including ADT Level 1 Manager, HR Level 1 Manager, and Legal and Compliance Level 1 Manager , Legal Level 1 Manager, and Global Compliance Level 1 Manager, and Audit Committee: Audit_committee@umc.com.

 

 

 

Implementation Status

UMC complies with all following evaluation items.

1. Establishment of ethical corporate management policies and programs

Evaluation Item

Implementation Status / Abstract Explanation

 (1) Does the company have an ethical corporate management policy approved by the Board of Directors, clearly state the policy and procedures in its guidelines and external documents, and demonstrate commitment from the Board of Directors and top management to implement the policy ?

( 1 )UMC has formulated the Code of Ethics for Directors and Officers, the Employee Code of Conduct, and the Ethical Corporate Management Best Practice Principles with approval by the Board of Directors, and the UMC Code of Conduct as regulatory guidelines for all directors, managers and employees of the Company. Please refer to the UMC websites at https://www.umc.com/en/Html/ir_corporate_governance and https://www.umc.com/en/Html/UMC_code_of_conduct

(2) Does the company have policies to prevent unethical conduct, analyze and evaluate the risk of unethical conduct in operating scope periodically, at least including appropriate precautions against high-potential unethical conduct or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies ?

( 2 ) The Employee Code of Conduct and the UMC Ethical Corporate Management Best Practice Principles are provisions for regulating moral integrity, conflict of interest, and business conduct. The Company also establishes a risk assessment mechanism against unethical conduct. Other relevant education, training, or tests are conducted from time to time for employee education.

(3) Does the company have policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies and review the policies periodically ?

( 3 ) The Employee Code of Conduct and the UMC Ethical Corporate Management Best Practice Principles are provisions for regulating moral integrity, conflict of interest, and business conduct. The Company also establishes a risk assessment mechanism against unethical conduct. Other relevant education, training, or tests are conducted from time to time for employee education.

2. Fulfill operations integrity policy

Evaluation Item

Implementation Status / Abstract Explanation

(1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts ?

( 1 )All suppliers have signed the Employment Ethics Terms and Conditions Agreement in which policies and reporting channels are clearly stated. Furthermore, to strengthen and implement policies on quality, penalties for violating the above Process Change Notification (PCN) are clearly stated in the purchase order in accordance with the UMC Raw Material Supplier PCN Application Management Method (GG-Q12-008-E).

(2) Does the company have an exclusively (or concurrently) dedicated unit supervised by the Board of Directors to be in charge of corporate integrity, implementation, and regularly reports to the Board, at least once a year ?

( 2 )The ESG Steering Committee is the highest-level corporate social responsibility organization within UMC. The committee formulates the direction and objectives of the Company’s corporate social responsibility and sustainable development, and reports to the Board of Directors annually.(Report Date is Oct. 26, 2022.) Ethical management is only one part of corporate sustainability. For further information, please refer to UMC website at https://www.umc.com/en/Html/UMC_code_of_conduct.

(3) Does the company have policies to prevent conflicts of interest and provide appropriate communication channels ?

( 3 )Please refer to Employee code of conduct at https://www.umc.com/upload/media/08_Investors/Corporate_Governance/Major_Internal_Policies/Employee_Code_of_Conduct-e.pdf for policies and reporting channels.

(4) Has the company established effective accounting and internal control systems to facilitate ethical corporate management, and has the internal Audit Division formed and executive an audit plan based on unethical conduct risks, or engaged an external accountant to implement the audit ?

(4)In order to facilitate ethical corporate management and issue a reliable, transparent and compliant report, UMC established an effective accounting system and designed relevant internal control systems based on evaluation results of risks including unethical conduct, code of conduct and regulations compliance. UMC Audit Division directly under the Board of Directors/Audit Committee performs relevant operation audits according to annual audit plans and regularly reports the audit results and improvement follow-up to the Board of Directors/Audit Committee. And through annual internal control and self-assessment, UMC has also conducted a self-review of all fabs, departments and subsidiaries operation to achieve the effectiveness of internal control systems’design and implementation.In addition, UMC is also listed on the New York Stock Exchange (NYSE) and subject to US regulations for foreign issuers. Since 2006, UMC has complied with the SOX 404 Act and has been audited by the independent auditors implementation performance.

(5) Does the company regularly hold internal and external educational trainings on operational integrity ?

(5)UMC has formulated the Code of Ethics for Directors and Officers, the Employee Code of Conduct, and the Ethical Corporate Management Best Practice Principles as regulatory guidelines for all its directors, managers and employees. These regulations aim to enhance the quality of conduct and professional ethics of the Company and its entire staff. The abovementioned Employee Code of Conduct is implemented in the daily work of all employees through physical and online training courses and tests. In 2022, UMC fabs in Taiwan and Singapore have completed the training courses and passed relevant tests.

3. Operation of the integrity channel

Evaluation Item

Implementation Status / Abstract Explanation

(1) Does the company have a system to process complaints and offer reward incentives, a hotline for reporting complaints, and a designated personnel to follow up with complaints ?

(1)Article 6 of the Employee Code of Conduct describes measures to prevent ethics violations, and to protect whistleblowers and to prevent retaliatory action. Employees or any whistleblowers may report violations to relevant management and supervisory units through e-mail or hotlines, and the head of the Audit Division is promptly notified of the report.

(2) Does the company have standard operating procedures for investigating complaints, follow-up actions, and ensuring the complaints are handled in a confidential manner ?

(2)After receiving a complaint, UMC will convene an investigative team to investigate the violation described in the report. Once the investigation results are confirmed, those found violating or breaching the Code of Conduct are to face adequate corrective action by the Company depending on the severity of the incident. The Company will protect any employee reporting ethics violations or frauds, or participating in the investigation, from unfair treatment or retaliation. For details, please refer to Employee code of conduct at https://www.umc.com/upload/media/08_Investors/Corporate_Governance/Major_Internal_Policies/Employee_Code_of_Conduct-e.pdf.

(3) Does the company provide proper whistleblower protection ?

(3)The Company will protect any employee reporting ethics violation or fraud, or participating in the investigation, from unfair treatment or retaliation. For details, please refer to webpage at https://www.umc.com/upload/media/08_Investors/Corporate_Governance/Major_Internal_Policies/Employee_Code_of_Conduct-e.pdf.

4. Strengthening information disclosure

Evaluation Item

Implementation Status / Abstract Explanation

Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS ?

UMC discloses its principles on ethical corporate management, relevant regulations and status of implementation on its website and MOPS. In addition, UMC discloses relevant information in its Corporate Sustainability Report.

 

5. The company has established its ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies; please describe any discrepancy between the policies and their implementation.

UMC has formulated the Code of Ethics for Directors and Officers, the Employee Code of Conduct, and the Ethical Corporate Management Best Practice Principles. All directors, managers and employees of the Company shall abide by the provisions of these Codes and related regulations. UMC has not have any discrepancy between the regulations and our implementation.

6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies).

UMC abides by the laws and regulations, and regularly reviews and revises the Ethical Corporate Management Best Practice Principles. For other important information that is helpful to understand the Company's Ethical Corporate Management implementation status, please refer to the information of Specific Measures for Ethical Management.

7. Does UMC has protection mechanisms for trade secret?

UMC values trade secret of its own and others and has established internal regulations such as "Trade Secret Protection Regulations" to standardize confidentiality measures and punishing mechanisms. UMC also regularly implements trade secret training for employees. For the current status of the implementation of UMC’s trade secret protection, please refer to "UMC Trade Secret Protection Declaration."

For other relevant communications such as employee rights, employee care, investor relations, supplier relationships and stakeholder rights, please refer to the UMC Sustainability Report and the Corporate Sustainability webpage on the UMC website.

 

Specific Measures for Ethical Management in 2022 - 2023

Implementation Status

Legal Compliance

UMC’s cross-division regulatory compliance is coordinated by the Global Compliance Division, which regularly reviews other laws and regulations through relevant divisions. The execution methods include but are not limited to: regulatory searches of our operational locations, inventory and adjustment of internal systems, and various seminars or inspections on compliance with laws and regulations.

UMC implements the “Privacy Policy” and “Privacy Protection Policy”, and pays close attentions to the EU General Data Protection Regulation, the US California Consumer Privacy Act, and the Personal Information Protection Law of China, and the Global Compliance Division will coordinate overall regulatory compliance with these laws and regulations. Also, the training material for the privacy laws and regulations can be found on our internal website, and the online training and test have been conducted regularly.

With respect to the frequent rule changes of the Export Administration Regulations of the United States, and the new export control related laws or regulations of China to counteract the changed Export Administration Regulations of the United States, the Global Compliance Division will coordinate overall legal compliance in this regard. Also, the training material for the export control can be found on our internal website, and the online training and test have been conducted regularly.

UMC also pays close attentions to the global laws and regulations related to the anti-corruption, and not only publish the “UMC Anti-Corruption Statement” on our external website, but also provide the training material for the laws and regulations on our internal website, conduct the online training and test for anti-corruption on a regular basis.

In order to implement the prohibition of insider trading, the company has established the "Insider Trading Prevention Policy and Handling Procedures"; in addition, in order to establish mechanism for processing and disclosing internal material information, so as to avoid improper leakage of information and to ensure the consistency and correctness of the information published by the company, the company has established the "Operational Procedures for Processing Internal Major Information" for corporate compliance.

The company regularly emphasizes the importance of relevant laws and regulations to directors and managers each month and notifies them of the two-month blackout period in the future to avoid violating regulations when trading company stocks. In order to continuously strengthen employees' legal awareness of insider trading and trade secrets, and to promote the necessity of compliance, the company regularly conducts online education and testing to prevent employees from unintentionally violating laws and regulations due to a lack of understanding.

On April 21 and April 22, 2021, the course "Prevention of Insider Trading and Insider Equity Trading Regulations and Practices" was held, focusing on the definition and constituent elements of insider trading, criminal liability and penalties for violations, related cases of listed companies, and the company's internal preventive measures. The attendees of the class are a total of 99 supervisors above the first level, and they have completed the three hour course training.
In December 2023, the online training on "Securities and Exchange Act – Insider Trading" was held. The definition, constituent elements, and criminal liability for violations of insider trading were promoted to strengthen the concepts of insider trading and awareness of legal compliance. All employees of the company (excluding DL colleagues) were the target of the training.

UMC Code of Conduct Implementation

The content of the Codes is reviewed biennially: Review of the Employee Code of Conduct was completed in March 2023.

Major violations of employee ethics are reported to the Audit Committee on a quarterly basis. In 2022, no major ethical violations were reported.

Employee Code of Conduct education and testing were conducted in August 2022, with 100% completion rate.

Employee Code of Conduct training course for new employees; 364 participants and a total of 546 hours in 2023.

UMC fair competition, intellectual property rights violations

UMC has reported the litigation cases in each quarter of 2023 to the Audit Committee.

UMC respects the principles of fair competition. In addition to providing training material of anti-trust laws and regulations on the our internal website, and the online training and test have been conducted regularly.

To prevent the risk of loss or infringement of intellectual property rights, UMC regularly holds trade secrets laws and regulations related courses for senior executives of level one or above, which are taught by external experts in the field. In addition, the company provides training material on trade secret laws and regulations and copyright laws and regulations on our internal website, and conducts online tests regularly.

For intellectual property rights education, three weekly training courses are offered to new employees: Introduction to UMC Intellectual Property Rights, Trade Secret and Basic Legal and Risk Awareness on the Incoming Data.

Introduction to UMC Intellectual Property Rights training course for new employees: 1,650 participants and a total of 412.5 hours in 2022, and 354 participants and a total of 88.5 hours in 2023.

Trade Secret training course for new employees: separate from UMC Intellectual Property Rights as an individual course since December 2018 with 1,650 participants and a total of 264 hours in 2022, and 354 participants and a total of 56.6 hours in 2023.

Basic Legal and Risk Awareness on the Incoming Data training course for new employees: implemented since April 2018. A total of 1,650 participants and a total of 412.5 hours in 2022, and 354 participants and a total of 88.5 hours in 2023.

Financial Reporting Related Internal Control

Annual audit by external auditors and internal Audit Division.

Results of internal audits for 2022 were reported at the Audit Committee/Board of Directors meetings on a quarterly basis.

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