Codes of Ethics

Home > Investor Relations > Corporate Governance > Codes of Ethics

First Echelon Supervisors and Executives

Codes of Ethics for First Echelon Supervisors and Executives

Established on December 20, 2005

The “Codes of Ethics for First Echelon Supervisors and Executives” has been implemented following approval during the 8th Meeting of the 12th Board of Directors held on Dec. 20, 2005. The Codes consist of 16 articles regulating first echelon supervisors and executives in regard to honest attitude and observance of professional standards in the exercise of their duties. First echelon supervisors and executives are especially regulated as follows:

1. They shall handle with fairness any factual or evident conflict of personal interest with their duties.
2. They shall keep confidentiality any unpublicized information of CSC or CSC’s purchasing or selling clients.
3. They shall avoid using their position in the company to improperly benefit for themselves, their spouses, parents, offspring or relatives within three generation or relevant business entities relating to the aforementioned persons.
4. They shall comply with relevant laws prohibiting insider trading. If in possession of important unpublicized information, they shall not engage in related securities exchange.

CHAPTER 1: GENERAL PROVISIONS

Article 1
These Standards have been especially established to guide the conduct of management personnel of the Company at the grade one level and higher so that it conforms to ethical standards, to prevent illegal and undisciplined conduct, and to enable the interested parties of the Company to better understand the Company’s ethical standards.

Article 2
Management personnel at the grade one level and higher as referred to in these Standards include the chief executive officer, the president, the executive vice president, the vice presidents of the various departments, the assistant vice presidents, the grade one managers and salaried advisers of each unit, senior professional engineers, senior professional managers and senior researchers.

CHAPTER 2: STANDARDS OF ETHICAL CONDUCT

Article 3
Honest and ethical conduct:
Management personnel at the grade one level and higher should perform their duties with an honest and non-deceptive attitude and conduct that adheres to and conforms to professional standards, including the handling of de facto or obvious conflicts of interest between their personal lives and their official duties in an impartial manner.

Article 4
Prevention of conflicts of interest:
Management personnel at the grade one level and higher should handle business in an objective and efficient manner, and avoid utilization of the positions they hold at the Company to enable the following personnel or corporations to receive improper benefits:
1. The party himself, his spouse, parents, children or relatives within three degrees of kinship.
2. Corporations in which the persons in the preceding clause directly or indirectly own considerable financial interests.
3. Corporations in which the party himself serves concurrently as chairman of the board, executive director or senior manager.
The Company should pay particular attention to loans of funds to, material asset transactions with, purchasing (sales) relationships with, or the provision of guarantees on behalf of the persons or corporations listed in the preceding paragraph.

Article 5
Avoidance of opportunities to seek personal gain:
When the Company has an opportunity to profit, management personnel at the grade one level and higher have the responsibility to preserve and increase the legitimate and lawful profit that the Company is able to obtain, and should avoid the following conduct:
1. Opportunities for seeking personal gain for oneself or other parties through the use of the Company’s property or information or by taking advantage of one’s position.
2. Use of the company’s property or information or taking advantage of one’s position to obtain personal gain for oneself or other parties.
3. Competition with the company.

Article 6
Preserving business confidentiality:
Management personnel at the grade one level and higher shall bear the obligation to preserve the confidentiality of unpublished information concerning the Company itself or the parties from/to which it purchases (sells) goods, except when publication is authorized or required by law. Information that should be kept confidential includes all unpublished information that can be exploited to advantage by competitors, or that will cause damage to the Company or its customers after it is leaked.

Article 7
Engagement in fair trade:
The company is dedicated to market competition based on superior management and high-quality products and service, and does not achieve results by using unlawful or unethical means. Management personnel at the grade one level and higher should treat the customers from which the Company purchases or to which it sells goods, the Company’s competitors and its employees fairly, and must not obtain illegitimate profits by making untrue statements about important matters by means of manipulation, concealment or abuse of information learned based on his or her position, or by means of other unfair trade practices.

Article 8
Protection and legitimate use of Company assets:
The Company’s assets should be protected and may only be used well based on the Company’s lawful commercial purposes. Management personnel at the grade one level and higher all have the responsibility to protect the Company’s assets, to ensure that they can be employed effectively and legally in business, and to avoid direct impacts on the Company’s profitability due to theft, negligence or waste.

Article 9
Compliance with laws and regulations:
Management personnel at the grade one level and higher should observe and propagate the Securities Exchange Law and other laws and regulations which standardize corporate activities, and must not intentionally violate any laws, or engage in conduct to intentionally mislead, manipulate or unfairly obtain advantages from the customers from/to which the Company purchases (sells) goods, or make untrue statements regarding the company’s products or services.

Article 10
Observance of laws concerning the prevention of insider trading:
Management personnel at the grade one level and higher should observe laws concerning the prevention of insider trading and other securities laws concerning equity trading and the handling of confidential business information; such personnel who are in possession of important unpublished information must not engage in related securities trading. Insider trading is both illegal and unethical, and the company will resolutely intervene to deal with this.

Article 11
Encouraging the reporting of any conduct that is illegal or that violates the Standards of Ethical Conduct
Internally, the Company should reinforce the propagation of ethics concepts, and employees should be encouraged to report to supervisors, the chief auditor or other appropriate personnel when they suspect or discover violations of laws and regulations or the Standards of Ethical Conduct. The Company should do everything possible to protect the identities of the parties making such reports and to protect their safety, so that parties making such reports are not subject to reprisals or threats.

CHAPTER 3: SUPPLEMENTARY PROVISIONS

Article 12
Procedures for exemption from applicability

In the event that a manager at the grade one level and higher wishes to be exempted from the application of Article 4, he or she should fully disclose to the Board of Directors the persons or corporations listed in Article 4 and the interest relationship of each legal act, and the reasons why this is not disadvantageous to the company and it conforms with business conventions; this should then be approved by a resolution of the Board of Directors.

In the event that a manager at the grade one level and higher wishes to be exempted from the application of Article 5, he or she should explain said opportunity, information or the specific details of the competition with the Company to the Board of Directors, and the reasons why there is no conflict with the Company’s interests or there is no effect on the Company’s interests; this should then be approved by a resolution of the Board of Directors.

Upon approval by a resolution of the Board of Directors of an exemption of applicability as provided in the preceding two paragraphs, the Company should immediately disclose information including the titles and names of the personnel exempted, the date of board approval of the exemption, the term of the exemption from applicability, the reasons for exemption from applicability and the standard(s) for which applicability has been exempted on the Market Observation Post System (MOPS).

Article 13
Disciplinary Measures:
In the event that a manager at the grade one level and higher violates these Standards, he or she shall be disciplined directly in accordance with the rewards and punishments set forth in Part 4, Chapter 2 of the Personnel Management System, with the exception of cases in which the materiality of the circumstances require that they be reported to the Board of Directors for deliberation.

If the disciplined personnel in the preceding paragraph considers the Company’s disposition of the matter to be improper, such that it infringes on his or her legal interests, he or she may submit an appeal through the administrative system in accordance with the provisions for handling an appeal in Part 7, Chapter 4 of the Personnel Management System, to seek relief.

Article 14
As regards the standards of ethical conduct which management personnel at the grade one level and higher must observe, in addition to the provisions of these Standards, the relevant provisions of other regulations of the Company shall also apply.

Article 15
These Standards shall be disclosed in the annual report, prospectuses and on the Market Observation Post System; the same shall apply to amendments hereto.

Article 16
These Standards will be put into effect after they are approved by the Board of Directors, and delivered to each supervisor and presented as a report at a general meeting of shareholders; the Same shall apply to amendments hereto.