OBI (“Company”) is deeply aware that ethics and transparency are important core values of business operations. In order to pursue a sustainable environment for business development, the Company has established a corporate governance and risk control mechanism. Committed to implementing an ethical business system based on ethics and to maintaining its reputation as a credible enterprise, the Company requires each of its employees to protect the Company’s reputation and practice its ethics core values. The Company’s pertinent guidelines and implementation of ethical management are described as follows:
Ethical Management Internal Guideline
- The Company’s directors, managers, employees, appointees and persons with substantive controlling power shall not, in the course of doing business, provide, promise, demand or accept any improper benefits, directly or indirectly, or act in violation of ethics, the law or in breach of their fiduciary duties for the purpose of obtaining or maintaining such benefits. They shall comply with Company Law, Securities Trading Law, Commercial Accounting Law, Political Contributions Law, Anti-corruption Regulations, Government Procurement Law, Conflict of Interest Avoidance Law for Public Officials, guidelines for publicly traded companies, and other pertinent laws governing commercial acts.
- In order to achieve the above objectives, the Company has successively established the Code of Ethical Management in March of 2014 to equip the Company with a good business operation structure and to establish a corporate culture of sound management for sound development. The Code of Moral Conduct was instituted in that month as a guideline for the Company’s directors and managers to act in line with ethical standards and for the Company’s stakeholders to better understand the Company’s ethical standards. In that following September, the Code of Conduct was established, in addition to the employee work guidelines already in place, to regulate all of the Company’s directors, managers, employees, contractors and other partners who perform duties on behalf of the Company, that they are to self-discipline with ethical standards and to ethically treat clients, investors, colleagues, suppliers and every business contact. In March of 2015, the Ethical Operation Procedures and Conduct Guideline was also set up to specifically regulate the Company’s personnel to implement the ethical management policy on the principles of fairness, honesty, trustworthiness and transparency as they engage in commercial activities.
- The Company constantly pays attention to the development of its standards for ethical management and encourages its directors, managers and employees to make recommendations, upon which the Company reviews, improves and effectively implements its ethical management policy and measures. The Company’s Code of Ethical Management has been updated to its fourth revision and will continue to be revised as the Code further refines, thereby to implement the concept of ethical management.
Ethical Management Unit
In order to improve the operation of ethical management, the Company has designated its Legal and Intellectual Property Department under its board of director as the special unit responsible for ethics-related issues. This department is responsible for assisting in the formulation and supervision of the ethical management policy and prevention programs, as well as in promoting campaigns and education and training in ethical management policy. This ethical management unit reports to the Board of Directors every six months on the status of its implementation work.
Ethical Management Policy Main Points
Based on its business philosophy in ethics, transparency and responsibility, the Company’s Board of Directors and senior management are committed to actively implementing the Company’s guidelines, requirements and policy framework on ethical management as follows, to be implemented in its internal management and business activities:
- Ethics in business activities:
- Commercial activities should be conducted in a fair and transparent manner based on the principle of ethical management.
- Before business dealings, the legality and questional ethics history of potential agents, suppliers, clients or any other business parties should be evaluated to avoid transactions with parties with unethical conduct.
- Contracts with agents, suppliers, clients or any other business parties should include the observance of the ethical management policy and a termination clause in the case of ethics violation in the contracting party’s conduct.
- Prohibition of offering or accepting bribes: In the course of business, you may not directly or indirectly provide, promise, demand or accept improper benefits in any form from clients, agents, contractors, suppliers, public officials or other stakeholders.
- Prohibition of illegal political contributions:
Donations directly or indirectly to political parties, organizations or individuals should be in accordance with the Political Contribution Law and related internal operating procedures and may not be used for commercial or trading advantages. - Prohibition of improper charitable donations or sponsorships:
Charitable donations or sponsorships should be made in compliance with relevant laws and guidelines and internal operating procedures and may not constitute bribes in disguise. - Prohibition of unreasonable gifts, hospitality or other improper gains:
You may not directly or indirectly provide or accept any unreasonable gift, hospitality or other improper benefits in order to establish a business relationship or influence business transactions. - Prohibition of infringement of intellectual property rights:
You shall comply with relevant guidelines on intellectual property rights, the Company’s internal operating procedures, and contractual provisions. You may not use, divulge, dispose of, damage or otherwise infringe on intellectual property rights of others without their consent. - Prohibition of unfair competition:
You shall engage in business activities in accordance with relevant competition guidelines, and may not fix prices, manipulate bids, limit production or quotas, or share or segment markets by assigning clients, suppliers, operating areas, or business types. - Preventing products or services from harming stakeholders:
In the process of research and development, procurement, manufacture, supply or sale of products and services, you shall follow relevant laws and international standards, ensure information transparency and security of such products and services, establish and publish human right protection policies for the intended clients or other stakeholders, and implement these points in operational activities. Doing so will prevent such products and/or services from injuring, directly or indirectly, the rights, health and safety of their consumers or other stakeholders. - Following the law in conducting business:
When conducting business, you shall follow pertinent laws, guidelines and plans for preventing breaches. - Avoiding conflicts of interest:
- The directors, supervisors, managers and any stakeholders attending or presenting at a Board of Directors meeting shall report to the Board all material information on interests involving themselves or the legal person(s) they represent. If the interests are deemed harmful to the interests of the Company, these persons shall not be included in the Board’s discussions or voting and shall abstain from such discussions and voting. They also shall not act as a proxy to exercise the voting rights of any director. Directors shall be self-disciplined professionally and refrain from protecting each other’s interests over the Company’s interests.
- The directors, supervisors, managers, employees, appointees and persons with substantive controlling power shall not use their positions or influence in the Company to obtain improper interests for themselves, their spouses, parents, children or any third party.
Advocacy and Education and Training
In order to convey the importance of ethics and to promote a culture of ethical management, the Company continues to advocate the concept of legal compliance and ethical management by multiple means, including the Company’s internal website, internal emails and posters. Pertinent policy documents are published on the Company’s internal website for the personnel’s review at any time, to help its personnel fully understand the Company’s resolve on ethical management. Furthermore, the Company arranges various pertinent education and training courses from time to time to for its personnel to enhance their legal knowledge.
Regular Assessments and Audits
The Company has combined its ethical management policy with its employee performance appraisal and human resources policies to institute a reward and punishment system. Each work unit regularly reviews the unit’s performance in ethical management and evaluates itself via a self-assessment form. The Legal and Intellectual Property Department plans to conduct independent checks to confirm compliance of the prevention plan and record any abnormality. The Legal and Intellectual Property Department will then report the results of its audits to the Board of Directors. If the Company finds any breach, it will accordingly punish the offending personnel. The Company will separately review the prevention plan for its appropriateness and effectiveness and will urge the work units to effectively implement and supervise the ethical management policy to ensure Company-wide effectiveness.
Reporting System
The Company has established a smooth reporting pipeline to encourage internal and external personnel to report any unethical conduct. The Code of Ethical Management and the Code of Ethical Conduct provide a specific reporting system the Company should establish. The Code of Conduct and the Ethics Procedures and Conduct Guideline contain a reporting mailbox, a reporting procedure and measures to protect the whistleblower. They provide internal and external personnel the means to report any illegal issues and misconduct that violates ethics and morality. The relevant instructions are as follows:
- The Company has established Regulations Governing Procedure for Whistleblowing in February of 2020.
- The Company has posted a reporting mailbox on this webpage and on its internal website: compliance@obipharma.com
- The Company has appointed the Legal and Intellectual Property Department for accepting and investigating reporting. If the investigation confirms the reporting, the Company will take measures according to the seriousness of the violation and take appropriate legal actions and report to the proper or judicial authority where necessary to safeguard the Company’s rights and interests. The special unit will report to the Board of Directors the nature of the reporting, handling methods and follow-up improvement measures. In the case of a major violation or potentially material damages to the Company, the special unit will immediately produce a report and notify the independent director in writing.
- The Company allows the whistleblower to report anonymously. Unless otherwise stipulated by law, the Company keeps confidential the identity of the whistleblower and the contents of the reporting and protects the whistleblower from improper treatment due to the reporting. The Company has also established incentive measures for reporting by the whistleblower.
- If you have found any Company personnel to have violated the ethical management or acted unethically or illegal, please promptly report to the Company via the reporting mailbox mentioned above.
Policy Execution Effect
Prevention of Insider Trading
- The “Prevention of Insider Trading” SOP was enacted and published on July 23, 2014, and some articles were amended on March 12, 2021 in accordance with the existing laws and the division of rights and responsibilities within the company.
- In order to prevent insider trading violations by employees who are not familiar with the Securities and Exchange Act, Legal & IP Department conducts the following promotion to implement OBI insider trading prevention management SOP:
- Posters in Chinese and English have been posted on the bulletin board to promote the prevention of insider trading.
- On August 10, 2021, an E-mail in both English and Chinese titled “WORK ON INSIDER TRADING LAWS– by OBI Pharma” was sent to the whole company to promote the prevention of insider trading.
- On August 23, 2021, lawyer Tsungta Lin from Zhe Lu Law Office was invited for a 1.5-hour lecture on “Honest management and insider trading”. 113 employees attended the lecture and the participation rate was 95.8%. After the lecture, the slides and sound recording files were upload to SharePoint system for the reference of those who did not attend.
- On August 29, 2022, lawyer Po-Cheng Wang from Chien Yen Law Office was invited for an online 1.5-hour lecture on“Honest management and insider trading”for OBI and subsidiaries. After the lecture, the slides and video recording files were upload to SharePoint system for the reference of those who did not attend.
- On December 26, 2022, an E-mail in both English and Chinese titled “Insider Trading Prevention Campaign” was sent to the whole company once again to promote the prevention of insider trading.
- In accordance with the “Corporate Risk Management Best Practice Principles for TWSE/TPEx Listed Companies” announced in August 2022, it is requested that TWSE/TPEx Listed Companies establish and implement risk management procedures and policies thoroughly. On February 29, 2022, Chien Yen Law Office was invited for a lecture on “OBI Risk Management Procedures and Policies “ to strengthen the employees’ risk awareness and establish the mechanism for reporting and dealing with risk.
- The “Risk Management Procedures and Policies” SOP was enacted and published on March 13, 2023. All departments were invited to fill in the “Risk Management Form” to evaluate the potential risk and rank its possibility and influence.
- On July 14, 2023, lawyer Po-Cheng Wang from Chien Yen Law Office was invited for an online 1.5-hour lecture on “Honest management, insider trading, and anti-corruption” for OBI and subsidiaries. 111 employees attended the lecture and the participation rate was 84.1%. After the lecture, the slides and video recording files were upload to SharePoint system for the reference of those who did not attend.
Intellectual Property Management
- The “Intellectual Property Management” SOP was enacted and published on 15 December 2015, and some articles were amended on 9 March 2018.
- On August 7, 2023, Legal & IP Department reported to the board of directors on “Integrity Management Operations and Supervision Implementation Status in the First Half of 2023”. During the meeting, project reports were made on “the implementation of IP management”, “the implementation of legal training”, “the integrity management and the promotion of insider trading prevention”, “legal compliance internal inspection” and “reporting status”.
- The status of intellectual property is disclosed on page 3 of Annual Report 2022 as follows: Intellectual property protection is the core value of biotech companies. In order to cope with the globalization of market competition, OBI strengthened the patent layout and the protection of trade secrets in 2022, which has achieved a great substantial progress. By the end of 2022, OBI had obtained 26 domestic and foreign trademark certificates and 157 domestic and foreign patents. OBI also attract international talents to replenish the research and development ability to cope with the globalization of market competition.
- In order to promote the importance of intellectual property protection, Legal & IP Department conducted the following intellectual property promotion to implement OBI intellectual property management SOP:
- OBI IP management policy and goal for 2021 have been posted on the bulletin board.
- On August 23, 2021, Albert Huang, the OBI IP manager, conducted a 0.5-hour lecture on “Patent Introduction and Intellectual Property Management Policy Promotion”. 113 employees attended the lecture and the participation rate was 95.8%. After the lecture, the slides and sound recording files were upload to SharePoint system for the reference of those who did not attend.
- On March 2, 2022, lawyer Kuan-Hsun Chiu, from OPES IP Consulting Co., Ltd. was invited for an online 1.5-hour lecture on “Protection of trade secrets” for OBI. After the lecture, all employees have been tested for the effectiveness of training. The slides and video recording files were upload to SharePoint system for the reference of those who did not attend. All employees have finished the test and signed the statement to protect the Company’s trade secrets.