SAMSUNG ELECTRO-MECHANICS

Compliance Committee

Samsung Electro-Mechanics has established a compliance practice organization system to raise awareness of compliance. The Compliance Committee, the highest level of the compliance practice organization, is a body that receives reports on the results of major compliance activities, provides direction, and makes decisions on major issues related to compliance.

Dedicated Compliance Organization

Samsung Electro-Mechanics has a dedicated compliance organization, the Compliance Team, which reports directly to the CEO. The head of the Compliance Team also serves as the Compliance Officer and attends all board meetings to support the company’s decision-making. The Compliance Team operates the Compliance Program Management System (CPMS), an IT system that supports compliance and manages the risk of violations of laws such as fair trade, including collusion, subcontracting, corruption, and trade secret violations.

Prevention of Corruption

As a world-class company, Samsung Electro-Mechanics strives to meet the most rigorous of all legal and ethical standards in all regions it operates in.
Samsung Electro-Mechanics executives and employees are committed to ensuring the best reputation for their company anywhere in the world by preventing all forms of corruption and bribery, and actively shaping and strengthening a clean organizational culture. There are three main pillars to Samsung Electro-Mechanics’s anticorruption policy.

Samsung Electro-Mechanics operates a compliance program based on the Compliance Code of Conduct, which incorporates Samsung’s core values. We practice compliance by providing regular training for all employees, manuals and guidelines for checking violations, and self-checking through the system. We also operate support centers and identify and manage new and revised laws and regulations. In addition,
we prevent the risk of non-compliance by monitoring non-compliance on an item-by-item basis at all times
or on a regular basis, and by conducting improvement activities to find the root cause based on analysis
of the process and results of the issues.

Compliance System

Samsung Electro-Mechanics has established and operates a compliance system with functions such as preliminary consultation on compliance issues such as legal inquiries and responses, compliance-related reports, and competitor contact reports, and input of autonomous compliance activities. Compliance-related regulations, code of conduct, instructions and guidelines, and compliance issues are always posted on the main screen of Knox Portal, the Company intranet, and the “Compliance” category is placed at the top so that employees can access compliance-related information at any time. In addition, we have an online and offline reporting system that ensures the anonymity of the reporter and provides that the reporter will not suffer any personnel disadvantages for reporting by name.

Identifying laws and regulations and providing guidelines

Samsung Electro-Mechanics frequently identifies the status of revisions to laws and regulations relevant to the company and promptly notifies relevant departments and employees of such revisions. Based on the identified laws and regulations, guidelines are created to ensure that employees do not violate laws and regulations in the performance of their duties, and detailed work processes and rules of conduct are presented and posted on the compliance system for employees to access at any time.

The compliance program at Samsung Electro-Mechanics is mainly divided into three processes: prevention, monitoring, and follow-up.

The prevention part includes compliance education for all employees and executives; manuals and guidelines on compliance to which employees and executives can refer in their official conduct; a self-monitoring system; a help desk to handle inquiries with regard to noncompliance and related matters; and a system for monitoring any updates and changes in various laws and regulations.

The monitoring part involves a standing organization that keeps track of possible risks in each single item of compliance around the clock or on a regular basis. Upon identifying any issues or problems, the organization thoroughly analyzes their causes and outcomes, and apply solutions for fundamental improvement.
The organization also shares its experiences and case studies with employees and executives as part of their compliance education so as to prevent recurrence.

The follow-up part involves evaluating the level of compliance, assessing measures taken in response to identified issues, and rewards and sanctions that are designed to ensure effective and sustainable operation of the compliance program.

Compliance Inspection and Monitoring

Samsung Electro-Mechanics conducts compliance inspection activities on a regular basis to identify and improve risks of violating laws. We conduct compliance checks in various areas such as abuse of dominant market position, subcontracting, and anti-corruption, and check the risk of leakage and misuse of business partners' technical data to protect their technologies and prevent infringement. For problems found during compliance checks, we work with the relevant departments to derive improvement measures and report the improvement measures and results to management. In addition, to prevent the recurrence of similar cases,
we disseminate the causes and measures to prevent recurrence to related organizations and reflect them in employee compliance policies and training materials. In addition, we conduct pre-consultation meetings for external sponsorship expenditures and internal transactions between affiliates. To strengthen the compliance monitoring system, we have also introduced a compliance team consensus function for contracting and registering business partners.

Compliance Training

Samsung Electro-Mechanics provides compliance training to all employees at least once a year, including fair trade, anti-corruption, and the prohibition of trade secret infringement. In particular, special training is provided to departments that have contact with business partners/customers, and all local employees of overseas sales corporations are trained on the prohibition of collusion and abuse of market dominance.

Autonomous Compliance Practice Activities

Once a year, all Samsung Electro-Mechanics employees access the company intranet and take the Compliance Pledge to voluntarily commit to practicing compliance. To promote employees’ autonomous compliance activities and establish a culture of compliance, we have institutionalized quantitative measurement of compliance incident management, employee education, self-inspection, and compliance-emphasizing messages to be reflected in the evaluation of their respective executives. Samsung Electro-Mechanics communicates its compliance-related activities and major issues to stakeholders through various communication channels such as roundtables, compliance letters, and internal broadcasts to spread the importance of compliance.