The Company has designated the Sustainable Development Committee, under the Board of Directors, as the dedicated unit for promoting ethical management. The chair of the Board serves as the committee chair, and all 5 independent directors serve as members. The committee reports to the Board of Directors at least once a year. The committee assists in integrating integrity and ethical values into the Company’s business strategies, and, in line with legal requirements, formulates related anti-corruption measures to ensure ethical management. It is also responsible for establishing the ethical management policies, supervising the execution of related matters, promoting and coordinating the implementation of ethical policy training, planning the whistleblowing system, and ensuring its effectiveness.

The Company reports to the Sustainable Development Committee at least once a year on the implementation status of ethical management, measures taken, and the results of investigations into whistleblowing cases. It reported 2 times in 2024(in March and September). The content of the reports covered 5 aspects: the formulation of ethical management policies and programs, actions for implementing ethical management (including an overview of education and training), the operation of the whistleblowing system, reinforcing information disclosure, and other important information to help the committee understand the operation of the Company’s ethical management.

The Company has established effective accounting and internal control systems for business activities with higher risks of unethical conduct and reviews these systems regularly to ensure the continued effectiveness of their design and implementation. The Auditing Department includes compliance with these systems as part of its audit scope and issues audit reports accordingly. The status of deficiency remediation is periodically reported to the Audit Committee and the Board of Directors. Additionally, the Company conducts a semi-annual self-assessment of legal compliance. The assessment covers relevant regulations, including the Financial Holding Company Act, Company Act, Securities and Exchange Act, Money Laundering Control Act, Counter-Terrorism Financing Act, and references the Anti-Corruption Act, to ensure business operations are aligned with the Company’s integrity policies.

Furthermore, each year, the Company compiles and submits reports to the Sustainability Development Committee and the Board of Directors detailing the identification of high-risk business activities with potential for unethical behavior within each subsidiary’s operational scope, along with corresponding preventive measures. In 2024, all domestic and overseas operational sites within TCFHC Group conducted corruption risk assessments, achieving a 100% coverage rate. According to the 2024 unethical conduct risk assessment report of TCB, there were no fines imposed by regulatory authorities or deficiencies identified by internal or external audits related to existing corruption risk scenarios. The effectiveness of the control measures was rated as high, and no significant corruption risks were identified.

Implementing Ethical Management

In order to push ahead with the effective implementation of ethical management and comply with regulations governing business conduct, including the “Financial Holding Company Act”, “Company Act”, “Securities and Exchange Act”, “Business Entity Accounting Act”, and “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”, the Company has stipulated the “Ethical Corporate Management Best Practice Principles” and the “Ethical Management Procedures and Code of Conduct” by referring to the “Anti-Corruption Act”, “Government Procurement Act”, and “Act on Recusal of Public Servants Due to Conflicts of Interest”. These policies aim to govern the prohibition of providing or accepting improper benefits, political contributions, donations or sponsorship, anti-corruption and bribery measures, prohibition of insider trading and confidentiality agreements, avoidance of conflicting interests, avoidance of transactions with unethical parties, ethical business activities, prohibition of unfair competitive practices, handling and internal promotion of reports on unethical conduct, establishment of reward and punishment systems, complaint mechanisms and disciplinary actions, and the integration of ethical management policies into employee performance evaluations. In addition, the Company has established the “Employee Service and Code of Conduct Guidelines”, “Measures for Whistleblowing”, and “Guidelines for Handling Whistleblowing Cases”, and has clearly stated its ethical management-related regulations and practices on its official website, in annual reports, and in external documents to promote ethical conduct and prevent unethical acts.

The Company has formulated regulations such as the “Human Rights Policy” and the “Employee Service and Code of Conduct Guidelines” to regulate all employees. In case any manager or employee violates the code of conduct, the Company will report the matter to the Review and Evaluation Committee in accordance with the “Employee Rewards and Discipline Guidelines” and the “Employee Performance Evaluation Guidelines”. The severity of the violation will be considered to determine the corresponding disciplinary action and the grade for the year-end performance evaluation. This will also affect the amount of the employee’s annual rewards. For severe violations, the labor contract will be terminated in accordance with relevant regulations to ensure effective implementation of the internal code of conduct.

In order to further fulfill its commitment to ethical management, the Company stipulated the “Declaration of Compliance with Ethical Management Policies by Directors and Senior Management” and has since received a total of 109 signed declarations from all directors and senior management of the Company and its subsidiaries in 2024, attaining a 100% of signing rate. Furthermore, 100% of the employees of the Company and TCB have signed the “Employee Code of Conduct Commitment”. All subsidiaries within the Group report the status of compliance with the Ethical Corporate Management Best Practice Principles to their respective Boards of Directors every year. All subsidiaries completed their reports to their respective Boards in 2024.

The Company must conduct an ethical management assessment before establishing business relationships with external partners to avoid transactions with dishonest parties. The ethical management policies are also incorporated into contract terms to ensure the implementation of ethical management principles. In 2024, TCFHC Group had no incidents of corruption, fraud, bribery, insider trading, money laundering, discrimination, violation of customer privacy, anti-competitive behavior, antitrust violations, monopoly, market manipulation, improper political contributions, or improper charitable donations and sponsorships violating its code of conduct, while the amount of related legal proceedings and penalties was 0. Except for the case where TCSIT was corrected by the Financial Supervisory Commission for providing compensation, fees, and other benefits to sales institutions and their personnel beyond what was stipulated in sales contracts, there were no other violations of ethical management or any material deficiencies with significant impact.

Ethical Management Educational Training

To implement and promote ethical management, the Group continues to offer annual educational training courses related to ethical management (including topics on anti-corruption and anti-bribery). In addition to recording and providing online digital courses for all employees to study, external lecturers are invited each year to deliver specialized seminars on ethical management topics. Participants include directors, senior management, and managers of all Group companies, aiming to convey the importance of ethical management to all employees through a top-down approach. In 2024, an external prosecutor was invited to give an in-depth analysis on the topic of “Insider Trading and the Ethical Corporate Management Best Practice Principles”, explaining insider trading cases and their connection to ethical management practices, and emphasizing to employees that they may not directly or indirectly offer, promise, request, or accept any improper benefits, or engage in any other acts that violate integrity during business activities or the performance of duties, fully reflecting TCFHC’s zero-tolerance stance against corruption and bribery.

Whistleblowing System

Whistleblowing System Operation Mechanism

To prevent illegal activities, promote sound corporate operations, and protect whistleblowers, the Company has established the “Measures for Whistleblowing” and the “Guidelines for Handling Whistleblowing Cases”. Annual online training on the procedures is conducted to help all employees understand the Company’s whistleblowing regulations, reporting channels, and the protections provided, thereby ensuring the effective implementation of the whistleblowing system.

The Company may not dismiss, remove, demote, reduce the salary of, or otherwise subject the whistleblower to any unfavorable treatment that would harm the rights and interests they are entitled to by law, contract, or customary practices due to the whistleblowing case.

If a whistleblowing case is verified to be true, the Company or its subsidiaries shall resort to relevant punitive measures against the reported or involved parties. The whistleblower may be rewarded based on the severity of the case. If internal personnel make false reports or malicious accusations, they shall be subject to disciplinary action, hoping to strengthen and embed a corporate culture of ethics and transparency.

Status of Handling Whistleblowing Cases in 2024

In 2024, the Group did not harm the rights and interests of whistleblowers or impose adverse sanctions. A total of 49 cases were received through the Group’s whistleblowing email in 2024, all of which have been investigated and closed with reports completed. Among these, 3 cases were substantiated, 12 cases were partially substantiated, and 34 cases were unsubstantiated. The investigation results of the whistleblowing cases the Company received in 2024 have been reported to the Sustainable Development Committee according to the “Measures for Whistleblowing” .