Corporate Sustainable Development

(1) Does the company declare its ethical corporate management policies and procedures approved by the Board of Directors, in its guidelines and external documents, implement the policies?

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.

• Major Internal Policies
• UMC Code of Conduct

(2) Does the company establish 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?

The UMC Ethical Corporate Management Best Practice Principles and the Employee Code of Conduct are provisions for addressing moral integrity, conflict of interest avoidance and business entertainment. 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 establish 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 recheck the policies periodically?

The UMC Ethical Corporate Management Best Practice Principles and the Employee Code of Conduct are provisions for addressing moral integrity, conflict of interest avoidance and business entertainment. 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.

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

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 establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity, implementation, and regularly report to the Board of Directors, at least one time a year?

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. 27, 2021.） 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 establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it?

Please refer to the Employee Code of Conduct for policies and reporting channels.

The UMC Audit Division is directly under the Board of Directors/Audit Committee to ensure the independence and objectivity of audits. Each year, the Audit Division develops an annual audit plan based on risk evaluation results, including the involvement of unethical conduct, implements audit, issues audit report and tracks improvement accordingly, and conducts control self-assessment annually. The head of the audit division regularly communicates with members of the Audit Committee regarding audit results and follow-up, and presents audit affairs and discusses with independent directors during Audit Committee and Board of Directors meetings to fully communicate audit content and performance.

UMC regularly revises its internal control system to respond promptly to environmental changes and to improve the effectiveness of design and operating. Amendments are reported to the Audit Committee and Board of Directors for approval.

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 annually. To date, the independent auditors have issued unqualified audit reports for UMC’s internal control design and 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 2021, UMC fabs in Taiwan and Singapore have completed the training courses and passed relevant tests.

(1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up?

（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 establish standard operating procedures for confidential reporting on investigating accusation cases and follow-up?

After receiving a fraud report, UMC will convene an investigative team to investigate the suspected fraud described in the report. Once investigation confirm, 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 violation or fraud and members of the investigative team from unfair treatment or retaliation. For details, please refer to the Employee code of conduct.

(3) Does the company provide proper whistleblower protection?

The Company will protect any employee reporting ethics violation or fraud and members of the investigative team from unfair treatment or retaliation. For details, please refer to the Employee code of conduct.