Ethical Management Initiatives

  • Fubon’s four core values are “integrity, sincerity, professionalism and innovation,” with integrity being paramount.
  • The “Corporate Governance and Sustainability Committee” under the board of directors is responsible for supervising progress on ethical management initiatives, and the Corporate Governance team under the Committee’s ESG Task Force is responsible for promoting ethical management practices.

Operations Founded on Integrity

Of Fubon’s four core values – “integrity, sincerity, professionalism and innovation” – integrity is paramount. To foster a corporate culture that champions integrity and a sustainable operating environment, the Company has made it a priority to promote internal ethics norms and oversight and prevention mechanisms. The Corporate Governance and Sustainability Committee is responsible for supervising progress on ethical management initiatives, and in 2017 the Corporate Governance team under the Committee’s ESG Task Force was put in charge of promoting ethical management practices. The team helps ensure that integrity and ethics are at the heart of management policies. The ESG Task Force reports to the board of directors on progress on ESG initiatives every six months.

On March 23, 2017, the Company finished making revisions to its Corporate Social Responsibility Best Practice Principles, including disclosing the Company's CSR Promotion Unit and frequency of presenting reports to the board of directors.

Policies and Plans

The Company has consistently sought to strengthen its ethical norms to foster an ethical management environment while at the same time meeting its governance responsibilities to maintain the integrity of free markets. To achieve those goals, a “Code of Ethical Conduct” establishing standards of conduct for board directors and executives was established in 2006. That was followed in 2011 by “Ethical Corporate Management Best Practice Principles” for Company employees, subsidiaries, or Group companies or organizations with substantive control in the Company’s operations. The principles stipulate that before the Company engages in business with another party it should consider the ethical practices of the supplier or transaction partner to avoid doing business with entities involved in unethical behavior. They also mandate that when entering into a contract with another party, the contract shall include clauses that require compliance with ethical management policies and allow the Company to terminate or rescind the contract if the other party is involved in unethical conduct. The principles and subsequent revisions have been reported at shareholders meetings as a sign of the Company’s commitment to ethical management practices and policies.

With the growing adoption of ethical management norms at home and abroad, the Company revised its internal guidelines at the beginning of 2017 and also established “Procedures for Ethical Management and Guidelines for Conduct.” These procedures ban corruption, bribes, and antitrust practices, and prohibit illegal political contributions, improper charitable donations and sponsorships, and insider trading. They also cover codes of conduct for conflict of interest avoidance, intellectual property rights and fair competition, and lay down training and internal control mechanisms.

Preventive measures have also been taken to address business activities where the risk of unethical behavior is relatively high, including the initiation of “Donation Management Guidelines” and “Financial Consumer Protection Management Guidelines.” An“Anti-money Laundering/Combating the Financing of Terrorism Plan” has also been adopted to prevent money laundering and help investigate major crimes. In addition, “Work Rules” for Fubon Financial Holdings and its subsidiaries clearly specify that employees shall carry out their duties honestly.

Commitment and Execution

I. Outside Engagement

Aside from posting policy statements on ethical management on the Company’s website, Fubon has established a “Supplier Corporate Social Responsibility Code of Conduct” to encourage suppliers of the financial holding company and its subsidiaries to take their social responsibility seriously. Also, ethical behavior clauses are written into contracts with outside parties so that customers and business partners are made clearly aware of ethical management concepts.

II. Training and Evaluations

Fubon Financial Holdings and its subsidiaries provide training on standards of conduct and compliance to all new hires, and arrange compliance classes for all employees and internal control management training for supervisors. This comprehensive education and training ingrains such core values as integrity and discipline into employee culture.

Fubon Financial Holdings organizes mandatory digital classes for new personnel on the "Money Laundering Control Act" and "Personal Information Protection Act " and added three new classes on legal compliance at the end of 2017: "Three Lines of Defense for Internal Control and Legal Compliance System", "Employee Legal Education and Prevention of Financial Fraud", "Critical Rules of the Financial Holding Company Act and Case Studies of Violations and Penalties". To ensure learning efficacy, all newly-hired employees must complete these classes and take a standardized test.

With respect to employees in supervisor roles, all senior management personnel in Fubon Financial Holdings were required in 2017 to take classes on the subjects of "Financial Policies in Taiwan and Technological Innovation", "Regulatory Sandbox and Fintech Development", and "A Practical Primer on the Labor Standards Act". Newly-appointed supervisors were also required to complete classes on "Labor Laws and Regulations and Labor Inspection Practices" and "Three Lines of Defense Management System for Internal Control". These efforts instill knowledge of risk control among management personnel. The overall completion rate for the training was 99%.

The Company also regularly organizes mandatory training on risk management for all employees, with subjects including the "Personal Information Protection Act", "Money Laundering Control Act", and information security, in order to continuously enhance understanding of ethical and legal concepts among employees.

To comprehensively increase awareness and understanding of ethical conduct among all colleagues in Fubon Financial Holdings, in 2017 we organized a digital class on "Ethical Conduct Guidelines" and required employees to sign an accompanying ethics pledge. The content covers the ban on offering and accepting bribes, how to avoid conflicts of interest, confidentiality, fiduciary duty to stakeholders, establishing ethical business relationships, and procedures for encouraging the reporting of unethical conduct. After completing the classes, colleagues must sign the ethics pledge and agree to comply with the ethical conduct principles. In 2018, we launched a program implemented in stages to target all colleagues to complete the training and sign an agreement to comply with the terms of the "Ethical Conduct Guidelines". In the future, we will regularly implement the program to ensure that employees continue to maintain a strong grasp of concepts and approaches to ethical conduct.

The importance of values also permeates Fubon’s evaluation system. From evaluations of the board of directors and its members that assess their support for the Company’s core values to evaluations of Fubon employees, they all have criteria related to “integrity.” Individual evaluations include “internal audit and control indicators” that look at “annual compliance evaluation” and “annual special audit” results and whether an employee has violated internal control, compliance or operational risk rules. The Company will remain firmly committed to deepening the roots of ethical management concepts in all areas of the organization and promoting Fubon’s sustainable development.

III. Communicating, Reporting Wrongdoing and Filing Grievances

Several channels have been created to facilitate interaction between stakeholders and the Company. A spokesperson system has been established, and ways for investors, customers and other stakeholders to communicate with the Company or file a complaint are posted on the Company’s website. A whistleblower mechanism has also been forged by setting up several channels through which internal abuses can be reported and be handled by specialists.

Fubon’s “Procedures for Ethical Management and Guidelines for Conduct” specify procedures for encouraging people working inside or outside the company to report unethical or improper behavior. Related guidelines clearly stipulate that all cases and the identity of whistleblowers must be kept absolutely confidential.

Employee mailboxes have been set up internally to encourage feedback. Employees can use a human resources employee mailbox to give their opinions on ways to improve Company systems, employee benefits, internal control mechanisms and risk management or resort to a dedicated mailbox for tip-offs to report illegal behavior. This feedback can help reduce risk and improve internal policies and processes.

Communication Channels for Stakeholders or Whistleblowers