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Implementation Status of Ethical Corporate Management

Items Implementation Status Deviations from “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Description
1. Establishment of ethical corporate management policies and programs
(1) Does the company approve ethical corporate management policies by the Board of Directors? And is its ethical corporate management policies and procedures declared in its guidelines and external documents, as well as the commitment of its Board to implement the policies? V Yang Ming Marine Transport Corporation has approved the revision of its "Ethical Corporate Management Best Practice Principles" at the 12th Board meeting (20th session) held on Feb. 25, 2022 and disclosed its integrity policy in the company codes, annual reports, company website and other publications. That is, when engaging in commercial activities, directors, supervisors, managers, employees and mandataries of persons having substantial control shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, nor commit unethical acts including breach of ethics, illegal acts, or breach of fiduciary duty ("unethical conduct") for purposes of acquiring or maintaining benefits. It has also integrated ethical conditions into supplier’s contracts or ethical affidavits to be signed. No Difference
(2) Does the company establish the risk assessment mechanism against potentially unethical conduct by regular analysis and assessment on listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies? V For potentially unethical operational activities, precautionary measures like periodical staff rotation and enhanced supervision measures are taken. The risk control assessment is maintained by Risk Control Office. Plus, relative risk control proposals and measures against unethical conduct are raised for further discussions. Therefore the "Procedures for Ethical Management and Guidelines for Conduct" is approved, so as to achieve sound ethical corporate management. No Difference
(3) Does the company establish policies to prevent unethical conduct by issuing clear statements regarding relevant procedures, business conduct guidelines, punishment for violations, appeal rules, and commitment to implement policies above as well as review on pre-disclosure plans? V Ethical corporate management policies are implemented in accordance with relevant laws and industry practice. At the 12th Board meeting (20th session) held on Feb. 25, 2022. Yang Ming Marine Transport Corporation approved the "Procedures for Ethical Management and Guidelines for Conduct" and disclose these in the company codes and website. Moreover, Codes of Ethical Conduct, Work Rules, and The Personnel Reward and Punishment Procedures all strictly abide by rules of confidentiality and preventions of conflicts of interest. If any unethical conducts happen, punishment will be executed on the basis of behavior’s degree of seriousness. No Difference
2. Fulfillment of operation integrity policy
(1) Does the company evaluate business partners’ ethical records and include ethics clauses in business contracts? V The company has requested every department to specify ethics clauses in business contracts, or sign affidavits. Any violation found shall be recorded and the business partnership shall be terminated in case of serious violation. No Difference
(2) Does the company establish dedicated unit that is periodically in charge of corporate integrity report to the Board about its supervision and implementation? V To achieve sound ethical management, “Corporate Governance and Integrity Division”, the division under the Sustainable Operation Strategy Team of Yang Ming, is responsible for establishing and supervising the implementation of the ethical corporate management policies and prevention programs. The dedicated unit which is convened by the president and composed of representatives from Audit Dept., Legal Compliance Office, Risk Control Office, Public Affairs Dept. and Human Resources Dept., shall be in charge of the following matters, and shall report to the board of directors at least once a year :
● Assisting in incorporating ethics and moral values into the company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
● Analyzing and assessing on a regular basis the risk of involvement in unethical conduct within the business scope, adopting accordingly programs to prevent unethical conduct, and setting out in each program the standard operating procedures and conduct guidelines with respect to the company's operations and business.
● Planning the internal organization, structure, and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conduct.
● Promoting and coordinating awareness and educational activities with respect to ethics policy.
● Developing a whistle-blowing system and ensuring its operating effectiveness.
● Assisting the board of directors and management in auditing and assessing whether the prevention measures taken for the purpose of implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.
No Difference
(3) Does the company establish policies to prevent conflicts of interest, while providing and implementing appropriate communication channels? V The company upholds its Ethical Corporate Management Best Practice Principles, of which Article 19 deals prevention of conflicts of interests. Independent director e-mail box (independentdirector@yangming.com) and independent e-mail box (conduct@yangming.com) for whistleblowing system is provided for preventing the conflicts of interest. No Difference
(4) Has the company established effective systems for both accounting and internal control? And has the internal audit unit drawn up the relevant audit plans in accordance with the results of risk assessment, thus auditing the operating status to prevent unethical conducts? Or has company entrusted CPAs for its auditing? V The company complies with ethical corporate management policies by facilitating internal audit, accounting and internal control on a regular basis. Yang Ming shall establish an effective accounting system and an internal control system for business activities which may be at a higher risk of being involved in an unethical conduct. Meanwhile, it shall conduct reviews regularly to ensure that the design and enforcement of the systems continue to show good results. The company audits the integrity operating status of management departments, prepares the audit report, and submits the report to independent directors for reference, as well as integrating this into the internal audit report, which is then sent to the Board. No Difference
(5) Does the company hold internal and external educational trainings on operational integrity regularly? V From 2021.12.14 to 2021.12.27, the company conducted a 0.5-hour online outreach focused on the Code of Ethical Management, Code of Conduct, and Guidelines on Unethical Conduct Prevention, with 1,376 coastal employees passing the test and a completion rate of 93%. No Difference
3. A whistleblowing system operations
(1) Does the company establish a reward/punishment system and channels for whistleblowers? Can the defendant be reached by an appropriate person for follow-up?
(2) Does the company establish standard operating procedures of whistleblowing cases subject to investigation and related confidentiality mechanism?
(3) Does the company provide proper protection for whistleblowers?
V The company has specified the procedures of whistleblowing cases for Yang Ming Group Members:
(1) Set up an individual mail for whistleblowing case:(conduct@yangming.com), which only the Chief Audit Executive can receive and process. Chief Audit Executive assigns appropriate auditors to investigate whistleblowing cases and to submit an investigation report.
(2) Specify the SOP for whistleblowing cases, including handling period, methods, cases tracking, reward/punishment system, confidential mechanism, etc.
(3) The investigation report and other relevant documents shall be strictly kept confidential by all responsible members who handle whistleblowing case. Yang Ming shall protect the whistleblowers, the alleged respondents and the related employees involved in the investigation against unfair retaliation or treatment.
No Difference
4. Strengthening information disclosure
Does the company disclose its ethical corporate management policies and regulations as well as their implementation on its website and the Market Observation Post System(MOPS)? V The company has disclosed Ethical Corporate Management Best Practice Principles and relevant information as well as the status of implementation on the website:
https://www.yangming.com/CorporateGovernance/RulesandRegulations.aspx
https://www.yangming.com/CorporateGovernance/ImplementationStatusofEthicalCorporateManagement.aspx
No Difference
5. If the company has established its corporate social responsibility principles based on the” Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please describe any discrepancy between the principles and their implementation:
There is no difference between the internal conduct and regulations stipulated in the Ethical Corporate Management Best Practice Principles of Yang Ming Marine Transport Corporation.
6. Other important information to facilitate better understanding of the company’s ethical corporate management policies (such as review and revision of regulations):
Yang Ming complies with the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Act, Government Procurement Act, Public Servants Conflict-of-Interest Act, public listing and over-the-counter transaction rules, and other laws and regulations regarding commercial activities. This is the primary precondition for ethical management.