Ethical Management

The core values of Fubon Financial Holdings (hereinafter referred to as the “Company”) are integrity, sincerity, professionalism and innovation, and “integrity” is foremost among them. The Corporate Governance Team under the ESG Task Force was renamed in 2020 to the Corporate Governance & Ethical Management Team to strengthen the promotion of ethical management throughout the organization and deepen the presence of integrity and ethics in the Company’s operating strategy


Policies and Systems

The Company has established several ethics-related rules and guidelines, such as the “Ethical Corporate Management Best Practice Principles,” “Code of Ethical Conduct,” “Procedures for Ethical Management and the Guideline for Conduct,” “Donation Management Policy,” “Financial Consumer Protection Management Guidelines,” and “Group Policy for Anti-Money Laundering and Countering the Financing of Terrorism .”

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The establishment and revision of related rules and policies must be reviewed and approved by the Corporate Governance and Sustainability Committee and the board of directors and then reported at the annual shareholders meeting. New and revised rules and policies are also disclosed on the Taiwan Stock Exchange’s Market Observation Post System and the Company’s website. These guidelines clearly stipulate that board directors, top executives, managers, employees, mandataries or individuals with substantive control must abide by ethical management principles and cannot engage in unethical behavior. They ban corruption, bribes and antitrust practices, and prohibit illegal political contributions, improper charitable donations and insider trading. They also cover codes of conduct for conflict of interest avoidance, intellectual property rights and fair competition. All of these mandates demonstrate the commitment of the board of directors and top executives to implementing ethical management policies and ensuring they are complied with in the internal management of the Company and in external business activities.

Each subsidiary has identified its risks (including the risk of unethical behavior) based on its specific business and risk characteristics, past loss data and operating procedures, and established risk assessment mechanisms encompassing risk and control self-assessments and key risk indicators. These self-assessments and key risk indicators are regularly monitored and the results quantified to identify existing or potential unethical behavior risks and take corrective action. Those who violate ethical management rules are reported for disciplinary action depending on the severity of the offense according to provisions in the Company’s “Procedures for Ethical Management and Guideline for Conduct” and employee “Work Rules.” Information related to such cases and how they were handled is disclosed on the Company’s intranet.

The Company has also established “Employee Oversight Management Guidelines” and “Internal Control Violation Accountability and Punishment Guidelines” WOULD USE: “Accountability and Punishment Guidelines for Internal Control Violations” to ensure that employees take seriously and abide by standard business procedures in compliance with the Company’s internal control systems. These guidelines define negligence, attribution of responsibility, boundaries of authority, and punishments, and embed risk management in each employee’s job, leading them to put a priority on risk prevention when handling transactions or administrative tasks.

A clear conflict of interest avoidance system has also been established for board directors. In addition to requiring directors to avoid situations as provided by relevant laws and regulations, it also stipulates that directors should recuse themselves if a potential conflict exists on such issues as appointing a financial holding company manager or a subsidiary board director or supervisor or lifting non-competition restrictions. As for implementing Company or subsidiary rules on transactions with stakeholders, the Company’s interests shall be the first priority and fair trade principles shall be respected to prevent the pursuit of personal gains. Please refer to the 2019 Annual Report, Section 3.4.1 Functionality of Board of Directors, part (2) pgs. 53~55 on recusals of directors due to conflicts of interest.


Commitment and Mechanisms

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.


Education and Training

The Company 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. We also provide required risk management training for all employees, covering instruction on the Personal Information Protection Act, Money Laundering Control Act and information security to strengthen employee ethics and appreciation for the rule of law.

An additional step was taken in 2019 to further the implementation of regulations related to corporate governance based on one of the action plans – to deepen corporate governance and CSR culture – listed in the Financial Supervisory Commission’s “Corporate Governance Roadmap (2018-2020).” Fubon set up a training course on the “New version of the Corporate Governance Roadmap, corporate governance culture and ethical management,” and 100% of those who took the course passed it.


Evaluations

The importance of ethics is also emphasized in Fubon’s evaluation system. Evaluations of the board of directors and its members cover the Company’s core values, and all employee evaluations include criteria related to integrity. Individual employee evaluations include “internal audit and control indicators” that look at whether an employee has violated internal audit or control, compliance or operational risk rules, along with the results of an annual compliance evaluation and an annual special audit.


Whistleblower Policy

The Company has set up multiple channels through which internal abuses can be reported, and handled by people specifically designated to deal with such cases. An “independent director mailbox,” “complaint mailbox,” and “reporting mailbox” are all available on the Company’s website, and investors, customers and other stakeholders can also report inproper behavior by telephone, email or fax. All complaints or reports of abuses are handled appropriately by specially designated personnel according to internal procedures.


  • Internal Channels

The Company has established “Procedures for Ethical Management and Guideline for Conduct” that encourage people inside the Company to report unethical or improper behavior and specify procedures for handling such cases. The “Employee Complaint and Handling Guidelines” that enable employees to use the internal employee mailbox to give feedback on Company systems, employee benefits, internal control mechanisms and procedures to improve risk management, and report illegal behavior. Complaints are first categorized by specially assigned personnel based on the seriousness of the issue reported and then handled according to existing procedures. Related rules all clearly stipulate that the person who filed the complaint and the people handling the case are all responsible for keeping the case confidential to establish the fairness and credibility of the whistleblower system. In 2019, all complaints were effectively processed based on these procedures.


  • External Channels

Fubon Financial Holdings’ “Whistleblowing Policy” clearly stipulates that anyone who discovers that managers or employees of the Company or its subsidiaries may have committed a crime, committed fraud, or broken the law can report it to the Compliance Department under the Legal & Compliance Division through the "reporting mailbox" on the Company’s website. The “Whistleblowing Policy” was revised in November 2019 to allow anonymous reports and added a provision that allows the Company to give any person reporting an abuse a reward if the report is proved to be true and involves a serious situation.

The "Whistleblowing Policy" stipulates that after a complaint is received, except for cases that are not accepted or transferred, the president should appoint a unit or assign at least three people to form an independent investigation committee to investigate the matter, depending on the situation. The unit conducting the investigation should report its findings within the specified deadline. After the findings have been approved by authorized units/personnel, the investigating unit shall notify the whistleblower of the results.

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Also, from the moment the complaint is received, any person who is involved in or is familiar with the case must keep all related information, including details of the case and the identities of the accused and the whistleblower, strictly confidential. Violators will be punished according to the Company’s internal regulations. The Company and its subsidiaries must not dismiss, relieve of his or her duty, demote, cut the pay of, impair the benefits entitled by law, contract or customary practices, or impose any adverse treatment on a whistleblower because of the report filed.

In 2019, the Company received a total of 21 reports in the reporting mailbox, none of which involved alleged corruption or unethical behavior. The complaints were mainly about service disputes or the optimization of operating procedures. The people whistleblowers have received answers related to the cases.


Communication Channels for Stakeholders or Whistleblowers