Exhibit 11.1
Code of Ethics of Chunghwa Telecom Co., Ltd.
Article 1 Purpose and applicable scope
Chunghwa Telecom Co., Ltd. (hereinafter referred to as the “Company”) and its directors, managers and employees shall conduct business throughout the world in accordance with the highest ethical standards. This Code of Ethics is hereby stipulated in order to establish an obedience and maintenance standard.
The Code of Ethics embodies rules regarding individual and group responsibilities, as well as responsibilities to the Company, the public, and other stakeholders. This Code of Ethics applies to the Company’s directors, managers and employees. The purpose of this Code of Ethics is to prevent from wrongdoing and to cause their conducts to be in compliance with the following requirements:
Article 2 Honesty and ethics
The Company’s directors, managers and employees shall act according to the ethics and perform their duties with honesty.
Honest conduct mentioned above refers to a conduct that is free from intent of fraud or fact of deception. Conduct in compliance with ethics refers to a conduct that meets the professional standards, including the handling of conflict of interests in connection with the personal matters or their duties.
Article 3 Avoiding conflict of interest
“Conflicts of interests” stipulated in the previous Article refers to a situation where directors, managers and employees face a choice between their personal interests (financial interests or otherwise) and the interests of the Company.
Conflicts of interests will always cause public concerns toward the Company image. Services to the Company shall not be provided basing on personal interests, and directors, managers and employees are required to act in the Company’s best interest to avoid from any conflicts of interests.
Where the Company’s directors, managers and employees are in a position whose objectivity may be questioned because of personal interests or interests of their spouse, children, or relatives within the second degree (including working for companies whose interests are in the direct competition with the Company) shall notify their immediate supervisor or the Company’s Organization and Talent Development Department. Where any individual is aware that a material transaction or relationship might give rise to a personal conflict of interests, he/she shall discuss about the matter with his/her immediate supervisor or the Company’s Organization and Talent Development Department immediately.
A conflict of interests may arise when a director takes action or has interests that might make him/her difficult to perform the director’s duty objectively and effectively. A conflict of interests will arise where a director, or the director’s spouses, children or relatives within the second degree, receives improper personal benefits because of the director’s position in the Company. Directors shall not have a direct economic relationship with the Company unless otherwise authorized by Chunghwa’s Board of Directors (hereinafter referred to as the “Board”).
Loans to or guarantees in favor of directors, senior managers or their spouses, children, and relatives within the second degree are prohibited in order to avoid the conflicts of interests. Loans to the other personnel shall be reviewed and approved in advance pursuant to the Company's rules.
While potential conflict of interests involving directors, or senior managers shall be reviewed directly by the Board, those of other personnel of the Company shall be reviewed in accordance with the Company’s relevant regulations. The relevant activities may be permitted if they are determined to be not harmful to the Company.
Article 4 No appropriation for personal gains
Directors, managers and employees have the obligation to protect the Company's legitimate interests. Any individual unless the Company otherwise agrees, shall not take advantage of the Company's assets, information or its position to obtain personal interests.
Any person is prohibited from competing with the Company unless it is otherwise approved in writing by the Company’s Organization and Talent Development Department in advance.
Articles 5 Caring for Employees
Employees are the most important assets of the Company. The Company’s sustainable development relies on excellent employees who have realized their dreams in an excellent working environment and abundant business opportunities. The Company’s management shall be in compliance with the following requirements:
Article 6 Keeping trade secrets
“Trade secret” is defined under this Code of Ethics, which includes all the Company's trade secrets and information that is obtained from or through business or cooperative relationship which shall be kept confidential.
The Company’s directors, managers and employees shall keep the trade secret they obtain confidential, except where the disclosure is required by applicable laws, rules or regulations or authorized by the Company.
Article 7 Disclosing the Company’s information in a full, fair, accurate, timely, and understandable manner
All the Company related transactions and any disposition of assets shall be reflected in the accounts, financial statements and records of the Company in a full, fair, accurate, and timely manner.
All directors, managers and employees handling the Company’s disclosure process are required to know and understand the relevant rules with respect to disclosure requirements within the scope of their duties and shall ensure that information in documents that the Company files with or submits to the Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan, R.O.C (hereinafter referred to as ”SFB”) and the U.S. Securities and Exchange Commission (hereinafter referred to as ”U.S. SEC”) or information otherwise disclosed to the public, is provided in a full, accurate, timely, and understandable manner.
The Company’s financial statements must be prepared in accordance with the Company's internal accounting principles so that the financial statements will fairly and completely reflect the business transactions and financial condition of the Company.
Directors, managers and employees shall not intentionally make (or cause others to make) any incomplete, misleading, or false statement to an attorney, accountant, government agencies, audit institutions, or relevant agencies (such as the SFB, New York Stock Exchange, or U.S. SEC). Any of the above mentioned personnel shall not directly or indirectly force, manipulate, mislead, or fraudulently influence any of the Company’s auditors if he/she knows (or should have known) that his/her actions, if successfully, have resulted in a significant misleading in the Company’s financial statements.
Article 8 Treating fairly with the Company
The Company strives to increase its market competitiveness through its superior performance and products without the use of illegal or unethical methods. The Company’s directors, managers and employees shall respect the rights and benefits of, and shall treat fairly with, the Company’s customers, suppliers, competitors, and employees, and shall not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, or any material misrepresentation. Any person shall not be engaged in any of the following activities:
Article 9 Protecting the Company’s assets and utilizing them in an efficient and legitimate manner
The Company’s assets shall be well protected and can only be used for legitimate business purpose of the Company. The Company’s assets, whether tangible or intangible, may be used only by authorized employees or their designees unless it is otherwise permitted by the management.
Any person shall not make use of, steal, or intentionally misappropriate the assets of the Company or of any customers (including any trade secrets of the Company), for personal use, the use of another, or for other improper purpose. Any person shall not remove, destroy, or dispose of any valuables of the Company without the permission of management.
Article 10 Complying with applicable governmental laws, rules and regulations
Directors, managers and employees are obliged to comply with all the laws and regulations applicable to the Company’s business activities and with all the Company policies.
The Company’s business activities are subject to the relevant laws, regulations, and rules in the ROC and U.S., and are subject to market examination and other regulatory supervisory. The Company’s products and services are provided basing on contractual commitments which subject to the following principles:
Article 11 Preventing from insider trading
Directors, managers and employees are prohibited from trading securities while they are in possession of material nonpublic information.
Directors, managers and employees shall comply with the relevant securities laws and the Company's policies regarding insider trading, securities transactions and processing of business confidential information.
The Company, directors, managers and employees shall follow the following basic rules when engaged in securities (including bonds) transactions:
The rules outlined above apply to the following situations:
An insider trading is prohibited by the Company. While the Company has established rules to avoid from insider trading, any person who is found to likely have involved in an insider trading shall be reported to relevant authority for investigation.
Article 12 Preventing from corruption and bribery
All directors, managers and employees shall comply with Ethical Corporate Management Best Practice Principles for the Company and the following regulations:
Article 13 Implementing environmental protection and establishing a healthy and safe working environment
Directors, managers and employees of the Company shall comply with environmental protection related to laws and regulations, as well as the company internal rules for implementing the company’s environmental protection concept and realizing the company’s commitment to environmental protection. The Company values efficiency and recycle of various resources in all business activities. The Company actively participates in environmental protection activities and strives to protect environment.
Directors, managers and employees shall comply with applicable domestic and international laws, regulations and the company's internal rules for maintenance of safety of working environment and physical/mental health. The Company provides employees with periodical health examination, safety education,
health education and training, and physical/mental health activities. Customers’ health and safety is the first priority in all business activities. The Company provides customers with the relevant information for the correct use of products and services as well as management methods.
Article 14 Reporting and handling discovered violations against the Code of Ethics
Where a director, manager and an employee becomes aware of or engages in any conduct or activity that is likely to violate this Code of Ethics or an applicable law or regulation, he/she shall promptly report the event to the Company’s Organization and Talent Development Department. Any person making the report shall provide enough information to enable the Company to properly address the matter.
The Company has established related procedures for submitting matters regarding accounting, internal accounting controls, or auditing matters to the Audit Committee.
Any person will not be subject to retaliation of any kind (or threat of retaliation) for reporting any ethical concerns, suspected violations to securities related law, or other suspected misconduct in good faith. Any person who believes that he/she has been under a retaliation (or threatened or harassed) as a result of above action shall immediately report the matter to his/her immediate supervisor or the Company Organization and Talent Development Department.
Article 15 Full understanding and compliance with this Code of Ethics
Each director, manager and employee is obliged to carefully read, clearly understand, and comply with this Code of Ethics and, as necessary, to seek clarification on any key point. Where a manager or employee fails to comply with this Code of Ethics, including his/her supervisors who fail to make a report, may be subject to disciplinary action of termination of the employment agreement.
Implement the compliance of code of ethics shall be considered when assessing managers and employee’s performance and which shall also follow the relevant reward and punishment regulations.
The Company shall actively remind the importance of compliance with the company’s policies. Any violation of certain of the Company’s policies is likely to cause the Company and the relevant personnel to be responsible for civil liability and damages, administrative penalty, or criminal prosecution.
Any doubt regarding this Code of Ethics shall be directed to the immediate supervisor or the Company’s Organization and Talent Development Department.
Article 16 Waivers
The Company may, by a prior approval, waive application to this Code of Ethics for directors, managers and employees under certain limited situations. The waivers for directors or senior managers shall be granted by the Board. Waivers of other personnel shall be reviewed by a special committee chaired by the Senior Executive Vice President of the company. Where the waiver shall be granted if it is in compliance with the laws or the company rules, the waiver that is not in violation of the company’s legitimate business policies may be granted at discretion.
The Company shall promptly disclose to the shareholders about the names of directors or senior managers receiving the waiver, the contents of and reason for such waiver and state the same in the Company for the next issue.
Article 17 Application to affiliates and organization
Group enterprises or entities such as the Company’s subsidiaries, institutes with direct or indirect cumulative donation funds exceeding 50%, and institutions or legal persons with substantial controlling power shall proceed with business activities in accordance with this Code of Ethics and may establish relevant provisions for need of business operation.
Article 18 Riders
This Code of Ethics is established solely for the internal use by the Company. It is not intended to and does not give any rights to any employee, customer, supplier, competitor, shareholder, or any other person or entity. It does not in any way constitute a commitment, by or on behalf of the Company, as to any fact, circumstance or legal conclusion.
Article 19 Enforcement
This Code of Ethics is enforced upon the approval of the Board and the same procedures will apply to amendment thereafter from time to time.