LITE-ON pledges to uphold honesty and integrity in business management, and to obey the laws and ethical standards of the countries in which it carries out its business activities. LITE-ON also commits itself to making complete compliance one of its key policies. LITE-ON has implemented a well-designed management system, deploys regulation identification with training programs as means to strengthen compliance on an ongoing basis.
The Legal Department at LITE-ON has built an extensive compliance system and devised compliance policies. The department monitors regularly changes in domestic and foreign regulations that may have a potentially material impact on the company's business operations. In the presence of any such change, the appropriate local legal department will proceed to perform regulation identification in order to ensure all business activities around the world comply with the local and international laws and regulations. Meanwhile, LITE-ON's management structure provides a robust risk management framework and an effective implementation roadmap for identifying and managing the risks that require the attention of business managers. In addition, LITE-ON's internal controls prevent potential fraud and inappropriate behaviors in order to minimize related risks. Internal interdepartmental reviews and external inspections are in place to ensure compliance of implementation and performance. Task forces will be created for large investment projects in order to apply certain processes to manage and prevent the risk of fraud and prevent illegal activities. A major key event in terms of compliance is defined as it is in the Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities. A single event on which a total amount of no less than NT$1 million has been imposed in penalties is a major event. Major events, if any, are disclosed in the appropriate chapters of the LITE-ON CSR report.
LITE-ON requires that its employees, supervisors, managers, and directors not engage in or use any reason to instruct another to engage in any illegal or unethical behavior. The rules of integrity must be strictly adhered to and establish explicitly the employee code of conduct in areas including professional ethics, laws and regulations, employee relations, gifts and hospitality, client privacy, intellectual property rights, discrimination, bribery, conflict of interest, protection of corporate assets and reputation and other rules to be observed by employees. Compliance is implemented throughout every operational levels of the business activities, such as product design, procurement procedures, and discipline is strictly enforced. We state explicitly in the ethical corporate management best practice principles prohibition of offering or taking of bribes; offering of illegal political donations, inappropriate sponsorship or charity donations, and improper gifts, treatments, or other unjustified benefits; infringement of intellectual property rights; and unfair competition as well as prevention measures and procedures that prevent products or services from causing damages to stakeholders. The rules are intended to protect the rights of customers and prevent loss of assets, penalties, and damage of reputation.
LITE-ON requires new employees sign a statement of commitment to ethical conduct when they join the company so to help its employees understand the importance of ethical conduct and the need for it. Furthermore, LITE-ON requires employees complete anti-corruption training. To raise awareness of integrity and self-discipline, LITE-ON advocates compliance education and training on an ongoing basis, and, in addition to various seminars from time to time, organizes courses that help participants learn about the law and key compliance issues, including LITE-ON work ethics, anti-corruption, insider information, and anti-trust issues. The Responsible Business Alliance (RBA and formerly EICC) offers the following in-person courses: business integrity, avoidance of illegitimate gains, protection of confidential information, protection of intellectual property, intellectual property rights, advertising and competition, contract risk management, fair trade, anonymity and confidentiality, anti-corruption, conflict free minerals (metal procurement), environmental protection, privacy, and prohibition against retaliation. The courses are provided to raise awareness of ethical standards in the workplace. (Please see the Employee Development and Training page for details of related training.)
LITE-ON upholds honesty and integrity in business management, and complies with the laws and ethical standards of the countries in which it conducts business. To strengthen compliance and corporate governance practices, the board of directors passed the Corruption Reporting Guidelines. The guidelines require that the Office of Chairman handle reports in accordance with the guidelines and related procedures. Details of the reporting mechanisms and processes are as follows:
1. "Ethics complaint filing and reporting channels"
The LITE-ON reporting channels are monitored by a dedicated staff responsible for accepting and processing reports. The staff also makes regular status reports to the Audit Committee. LITE-ON keeps informants' identities and their reports confidential, and takes action to investigate and handle the cases.
Discovery of any unethical behavior or violation of the code of conduct may be reported by using one of the hotline and mailboxes below.
- Telephone: +886-2-8793-6833
- By email: ETHIC.HOTLINE@jntzxl.cn
- Mailbox: Office of Chairman Reporting Mailbox at PO Box 156-21, Jiangnan Post Office, Neihu District, Taipei City 11499.
Other channels available to employees in the company are the existing internal reporting extension at 1234 and the email email@example.com.
Reports that are accepted by the task force will be assigned to the appropriate units for review according to the report and complaint processing procedures. If a complaint is confirmed to be valid, a committee consisting of department representatives and experts will be created to review and rule on the complaint. Employees who are confirmed to have violated the ethical corporate management best practice principles will be subject to administrative disciplinary action, recourse against unlawful gains, or further legal actions as appropriate.
3. Internal controls
Regular internal audits and training are performed to strengthen internal control. Furthermore, task forces will be created for large investment projects in order to apply certain processes to manage and prevent the risk of fraud and prevent illegal activities.
- A campaign to raise awareness of the LITE-ON Ethical Management Policy takes place every year. The objective is to ensure the directors, managers, and employees understand fully and adhere to the ethical management regulations. Related training courses are also organized to reinforce compliance awareness.
- To raise awareness of integrity and self discipline, LITE-ON requires new employees sign a statement of commitment to ethical conduct when they join the company so to help its employees understand the importance of ethical conduct and the need for it.
Complaints received in 2019
11 complaints were received through the channels, including one submitted by mail and 10
by email. The Office of Chairman report investigation task force immediately launches an investigation every time it receives a report. So far, nine of the cases were closed, and two are still under investigation. Of the nine cases closed, six were found to be unsubstantiated. Two cases involved two employees who violated the company's employee code of conduct and were dismissed. One case involved one person who was given a verbal warning and reassigned to the current position. .
Case studies in lawsuits involving employee corruption
The cases above were summarized and presented regularly to the Audit Committee. In addition, assistance was given to respective business units in taking appropriate disciplinary actions, and said disciplinary actions were announced accordingly.
- Case 1: A deputy plant manager under a certain business unit was reported to have asked a supplier for inappropriate entertainment. The case was investigated and found true, and the result was made known to the head of said business unit. The deputy plant manager was dismissed given the severity of the case.
- Case 2: A senior procurement manager under a certain business unit was reported to have bribed the head of the equipment department. The case was investigated and found true, and the manager was reassigned. An anti-corruption campaign was conducted to raise awareness in the factory under said business unit.
For effective implementation of sound ethical management practices, LITE-ON created the Integrity Management Team in 2017. The team is responsible for formulating, implementing, and supervising the ethical management policy and prevention plans. A full-time unit is in place to report the results from the past year and the work plans for the coming year to the board of directors every year. The Integrity Management Team established the Ethical Management Policy in 2017. It is listed as one of the mandatory courses for new employees. It is also often referred to in meetings inside the company to raise awareness. The Employee Code of Conduct was amended in 2018. It provides a basis for ethical management behaviors. Courses aimed at strengthening ethical management practices are also made part of the mandatory annual training for all employees in 2019.
Response to the 2019 incident
The criminal charge filed by New Taipei District Prosecutors Office against LITE-ON's Leotek Business Division for suspected violation of the Anti-Corruption Act by an employee of the Business Division in the LED street lamp replacement project of Toucheng Township, Yilan County is currently reviewed by New Taipei District Court. The Company has carefully reviewed the indictment filed by the prosecutor of New Taipei District Prosecutors Office and found certain facts to be inconsistent with facts recognized by the Company. LITE-ON and the employee alleged to be involved in the case shall cooperate with judicial investigations and evidence collection in future review proceedings to clarify related facts and LITE-ON's position.
LITE-ON has always upheld honesty and integrity in business management, and has obeyed the laws and ethical standards of the countries in which it carries out its business activities. To establish a corporate culture of ethical management and healthy development of the Company, we require employees to adhere to the Ethical Management Policy and Ethical Commitment Statement established by the Company. We also established a public reporting system and internal control measures to strengthen legal compliance and the implementation of LITE-ON's Ethical Management Policy.
After the occurrence of the case, LITE-ON has reiterated its position of legal compliance and ethical management to all employees and organized training courses to increase the awareness of employees liable to violations of laws and regulations in business transactions and manage their conduct. In addition, LITE-ON also organized internal training for the ethical commitment required by customers and required suppliers to comply with the LITE-ON's integrity and ethical requirements. LITE-ON shall also implement rewards and penalties for employees' business conduct with greater precision in accordance with the Company's related regulations on rewards and penalties to implement requirements for employees' compliance with laws and regulations in their personal conduct and attain LITE-ON's ethical management standards.