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Ethical Principles

The Taekwang's ethical management shall adhere to laws and codes, and faithfully
maintain corporate social responsibility through transparent and proper corporate activities.

Ethical Conduct Policy

1. Basic principles
(1) We shall not accept, express, promise, or promise to give money to a stakeholder regardless of the reason. When a stakeholder gives money and/or valuables including gifts, you must refuse them or return them politely.
(2) If the acceptance from stakeholders was inevitable, the incident must be reported according to reporting procedure.
(3) Spouses of employees and relatives equivalent or closer than cousins shall not receive or provide compensation to stakeholders following the same protocol for the employee.
(4) A stakeholder refers to an individual or organization (customer, member, shareholder, supplier, country, public official, etc.) who may be directly or indirectly affected by his or her performance of work.
The following is the basic types of compensation, which includes acts conventionally recognized as receiving bribes under general common sense.
Receiving money and valuables (monetary instruments including securities, gift certificates and gifts), entertainment and providing services
Borrowing (movable assets and real estate), indemnification of debts, guarantees and loans
Guarantees regarding the future (promises of hiring and employment after retirement, promises regarding the conclusion of business contracts, etc.)
However, the following cases are exceptions.
Promotions and promotional souvenirs and articles that are distributed to random, unspecified personnel
Commodities provided to subordinates for the purpose of encouraging and rewarding them.
Gifts given between members due to retirement and movement
Ordinary gifts, for the purposes of helping each other
Gifts provided within the extent permitted by the relevant laws and regulations for the purpose of smooth performance or social, ritual, and relief purposes(cash and cash gifts are prohibited)
2. Types of compensation (money and valuables) and Criteria for breach of ethical principles
(1) Receiving in person
① Cases where money and valuables are presented between the person and the stakeholder
② Cases where recipient receipts money or valuables from or to stakeholders through family, relatives, or friends.
(2) Receiving indirectly
① Cases where a superior receives money or valuables from a stakeholder and gives such to subordinate employees
② Cases where a subordinate employee receives money or valuables from a stakeholder and gives such to a superior
③ Cases where recipients of equivalent rank exchange money or valuables received from stakeholders
(3) Criteria for breach of ethical principles
By principle, all cases where money or valuables have been received directly or indirectly from stakeholders shall be considered a breach of ethical principles
3. Receiving money and valuables (money and valuables including securities, and gifts)
A. Accountable Actions and Evaluation Criteria
Item Example Principle of conduct Remarks
Money and valuables Cash, checks, golf memberships, gift certificates, show tickets and other securities Prohibited  
Gifts Goods and e-point ticket etc Including goods and other sales promotion and discount benefits Report, permissible within limits
  1. Limit : Not exceeding 50,000 KRW/incident,

     not exceeding 200,000 KRW/year

  Only permitted sales promotion and discount benefits are allowed
Expenditures for congratulations and condolences Expenditures for congratulations and condolences, goods (bouquets/flower pots) Intentional notification to external actors is prohibited Permissible within limits
  1.  
  2. Expenditures for congratulations and condolences / wreath / flower arrangement: not exceeding 100,000 KRW (not exceeding 50,000 KRW for public officials)
  3.  Goods for congratulations and condolences: Not exceeding 50,000 KRW under common sense
Sharing of expenses Entertainment costs, company dinner costs and other personal expenses (paid for by stakeholders) Prohibited If inevitable, reimburse later
B. Guidelines for accepting money and valuables
(1) Money and valuables offered by stakeholders must not be accepted whatever the reason, and must be politely refused or returned.
(2) In cases where money or valuables have been accepted, such must be reported using the form 「Taekwang Clean Report」. These cases shall be handled in the following manner.
① A transfer shall be made to the stakeholder or the company thereof that provided the money or valuables, in the name of the recipient who received the money or valuables, through means with which the return of the money or valuables can be proven.
② A letter explaining the reason as to why the money or valuables have been returned, expressing appreciation for the sentiment, and including a message asking that such situations do not recur in the future, written under the name of an executive, shall be sent to the representative of the stakeholder, along with a copy of the remittance slip.

③ The content of the report, letter, remittance slip and other results shall be forwarded to the Ethics Secretariat

(3) Cases where money or valuables have been returned shall be reported according to reporting procedure as well.
C. Guidelines for receipt of gifts
(1) Giving or receiving gifts with stakeholders is prohibited for any reason, and these must be politely refused or returned. (While in cases of sales promotions or discount benefits, if these are permitted to all persons, such can be received. However, intentional benefits shall be considered gifts)
(2) If the receiver is unaware that a gift has been given from a stakeholder, or it is rude to immediately refuse or return such gift, the case will be handled as following.
① If the market price of the gift does not exceed 50,000 KRW (maximum amount for each receipt), and the total price of gifts received in a year does not exceed 200,000 KRW, the gifts shall be permitted but must be reported to the department head.
② If the market price of the gift exceeds 50,000 KRW (maximum amount for each receipt), or the total price of gifts received in a year exceeds 200,000 KRW, a person shall report such to the head of his department, report to the Ethics Secretariat using the 「Taekwang Clean Report」. Gifts shall be handled as follows, according to the type of gift.
a. Returnable products (gifts without a risk of spoiling with time : gift sets, spirits, etc.)
The received gift shall be returned, under the name of an executive, to the company of the stakeholder who has provided the gift. A letter shall be sent to the representative of the stakeholder, expressing thanks for the sentiment, explaining the reason why the gift was returned, and asking that similar incidents do not recur in future.
B. Non-returnable products (gifts with a risk of spoiling with time : meat, fish, etc.)
If returning such gifts is an inconvenience, items that are not expensive or extravagant may be reported to the Ethics Secretariat after receiving approval from the department head for use toward the community welfare, such as helping the underprivileged. The gifts shall be donated to social welfare facilities such as nursing homes, or orphanages, or religious groups located most closely to the location where such gifts were received, under the name of the representative of the company for which the stakeholder who has provided the gift works. A receipt denoting the gift and quantities shall be received.
Next, a letter shall be sent under the name of an executive, explaining the fact that a donation has been made to a welfare facility or a religious group, expressing thanks for the sentiment, and asking that similar incidents not recur in future, together with a copy of the receipt.
c. Gifts with company logos or names affixed (Goods such as watches, fountain pens and ball point pens marked with company logos or names)
If the market price exceeds 50,000 KRW, handling of such gifts shall be identical to the case with returnable gifts.
③ The content of the report, letter, remittance slip and other results shall be forwarded to the Ethics Secretariat.
(3) As for other cases that are not specified in the attachment, the Ethics Secretariat shall be consulted beforehand, or, the recipient shall take the measures thought to be most appropriate, then report the results there of in accordance with reporting procedure.
D. Guidelines for handling of expenditures for congratulations and condo
(1) Expenditure and goods for congratulations and condolences are permitted within the scope of social norms.
① Donations for congratulations and condolences: donations for congratulations at employee's wedding and donations for congratulations and condolences for immediate family members are allowed within the limit of 100,000 won. However, in accordance with the relevant laws and regulations relating to receipting the donations for congratulations and condolences with public officials, not exceeding 50,000 won.
② Goods for congratulations and condolences : Shall be limited to gifts (bouquets, flower pots) given according to social norms, depending on the reason for congratulations or condolences.
③ In cases where returning gifts such as flower pots and bouquets that have been given to congratulate promotions poses a significant risk of impacting the business or moral image of the company negatively, or otherwise deemed rude, gifts may be kept in the office of th recipient. (Also, expenses on gifts between employees and executives of the company, and Taekwang subsidiary companies to congratulate promotions shall not be included in company expenses).
(2) Notifying the external stakeholder prior to the events requiring congratulations or condolences is considered to be burdening and intentional. Therefore, the following are prohibited.
The act of sending or handing invitation letters to stakeholders (via e-mail, mail, FAX, etc.)
Posting on bulletin boards that can be accessed by outside stakeholders
Public announcements of events requiring congratulations or condolences either in person or through superiors, colleagues, or subordinate employees
E. Prohibition from burdening with expenses (passing on expenses for entertainment or company dinners to stakeholders)
(1) Calling stakeholders to company dinners or when providing entertainment clients to pass on expenses, or handing them the receipt and receiving money in return, is prohibited.
(2) In cases where a person meets a stakeholder by chance at company dinners, etc., and the stakeholder has paid for expenses, such shall be reported to the department head. The expenses shall be handled with company funds, and the amount must be returned to the stakeholder.
4. Entertainment
A. Accountable Actions and Evaluation Criteria
Item Example (Prohibited establishments) Principle of conduct Remarks
Meals Permissible within limits Limit : Not exceeding 30,000 KRW per person Not exceeding 300,000 KRW/time
Drinking Room salons, karaoke bars, nightclubs and other extravagant/luxurious entertainment establishments Prohibited
Amusement gambling entertainment. For example: Go-stop, casinos Prohibited
Sports luxurious sports, for example: Golf, skiing Prohibited Other than official gatherings approved by the company, entertainment gatherings with stakeholders are prohibited
Leisure facilities decadent facilities, for example: Steam rooms, massage parlors, high-end hair salons, high-end saunas Prohibited
B. Guidelines for handling of entertainment expenses
(1) Customary dinners and entertainment for business cooperation with approval from/to upper management are permissible, only if the amount is reasonable and acts are not prohibited according to business practices.
(2) Even in the case of dinners for business cooperation, if the level of entertainment exceeds the established limits, or there is a risk that the event may come to involve prohibited entertainment, such dinners must be avoided or canceled.
(3) Aside from official gatherings and cases pre-approved by the company, forms of entertainment including sports events such as golf or skiing where stakeholders pay for expenses are prohibited.
(4) When a stakeholder provides entertainment, the incident shall be reported according to the 「Taekwang Clean Report」 form. Here, simple meals not exceeding 30,000 KRW per person or 300,000 KRW per meal shall be excluded.
(5) As for cases where a person is unable to judge whether the meal is conventional or a meal for entertainment, the Ethics Secretariat shall be consulted beforehand, or measures thought to be most appropriate shall be taken, then the incident must be reported in accordance with the reporting procedure.
5. Providing services
A. Accountable Actions and Evaluation Criteria
Item Example Principle of conduct Remarks
Business trip support Transport (rail/air/bus tickets, furnishing cars, etc.) Lodging and meals (accommodation, meals, etc.) Appropriate price Pay the appropriate price when providing services to streamline business

Personal vacation

support
Providing transport, accommodation service and tour guides on personal vacations Prohibited
Office supplies Support for department office relocation costs Providing office supplies (wall clocks, mirrors, tissues, etc.) Prohibited If unavoidable, permissible as gifts
Sponsorship/patronage Sponsorship of in-department events (money and valuables, goods,transportation, etc.) Invitational events involving stakeholders unrelated with business (Domestic and international seminars, etc.) Prohibited Do not invite the stakeholders to events other than those pre-approved by the company; do not participate in events invited to by stakeholders
B. Guidelines for handling support for business trips and personal vacations
(1) Employees and executives may not, no matter the reason, require stakeholders to provide services, or accept suggestions regarding the providing services from stakeholders.
(2) Cases where lodging and transportation services are provided at a facility operated directly by the stakeholder for education purposes shall be excluded. This is limited to cases not prohibited legally and customarily, and where such services are presented to anyone. The details thereof must be specified and pre-approved. As for support outside what has been pre-approved, the appropriate price must be paid.
(3) In cases where transportation/lodging service has been received but appropriate price has not been paid, a monetary transfer shall be made to the representative director of the company for which the person having provided the services works. A copy of the remittance slip shall be attached to the 「Taekwang Clean Report」, which shall be reported to the department head in document form. The document shall be reported to the Ethics Secretariat.
C. Guidelines for handling the furnishing of office supplies
(1) Patronage (cash, goods) must not be received from stakeholders when moving offices and departments
(2) In cases where stakeholders are notified for business reasons that offices or departments are being moved, pay close attention so as not to burden stakeholders by mentioning in the notification letter, etc., that contributions of money and valuables will not be accepted.
(3) When the acceptance of office supplies, etc. is inevitable, only inexpensive goods costing no more than 50,000 KRW (wall clocks, flower pots, mirrors, tissues, etc.) shall be permitted, and goods exceeding 50,000 KRW in cost must be returned.
D. Guidelines for handling sponsorships/patronage
(1) Sponsorships in the form of cash, goods or transportation, etc. from stakeholders at company events such as picnics, track meets, and workshops will not be accepted.
(2) Notifying the stakeholders prior to such events shall be considered as being intentional acts to receive sponsorships.
Direct verbal communications pertaining to matters in relation to such events with the stakeholders, burdening them, or posting notice regarding events on in-company message boards that can be accessed by stakeholders
Handing out event brochures to stakeholders without prior approval from the company
(3) In cases where there is a need to invite stakeholders given the type of event, prior approval shall be received from the company. The stakeholders shall be notified that monetary contributions (money and valuables) will not be received from stakeholders so that the stakeholder does not feel pressured to participate in the event.
(4) In cases where stakeholders have brought cash or goods exceeding 50,000 KRW, it must be returned. If acceptance is inevitable, or in the case of inexpensive goods not exceeding 50,000 KRW (beverages, etc.,), the person responsible for the event shall thank the stakeholder, and explain company policy so that such incidents do not recur, and report the fact to the Ethics Secretariat.
(5) Events hosted by stakeholders must be for business purposes only, and all participants must receive prior approval from the company. When attending events, all participants shall avoid or cancel any actions that may be judged as providing services or entertainment. Also, in the event of entertainment outside the purpose of participating in the event, the stakeholder must be paid appropriately for the entertainment, and such must be reported to the Ethics Secretariat in accordance with the reporting method.
6. Borrowing (movable assets and real estate), indemnification of debts, guarantees and loans
A. Accountable Actions and Evaluation Criteria
Item Example Principle of conduct Remarks
Borrowing/bargain purchases/ selling at high prices Loaning, pledging, receiving for free, or bargain purchasing of assets of stakeholders, such as movable assets and real estate Prohibited For purposes of personal gain or profit
Selling assets owned personally by employees and individuals for high prices
Indemnification of debts Paying off of credit card bills, tabs, loans and other personal debt Prohibited  
Guarantees Asking for or proposing the guarantee of loans Prohibited All types of loans, from financial institutions or otherwise
Monetary loans Acts of lending or borrowing money to or from stakeholders, and the paying or receipt of interest therefor Prohibited  
B. Guidelines for handling borrowing/bargain purchases/selling at high prices
(1) No offers from stakeholders to borrow or receive as collateral their assets for gain or profit of employees, executives or their families shall be accepted.
(2) Also, receiving movable assets and real estate for free or purchasing such at prices lower than normal for de facto gain is prohibited. All cases shall be considered as receiving money or valuables.
(3) Vice versa, selling movable assets or real estate owned by employees or executives at higher-than-normal prices through stakeholders for de facto gain, shall also be considered as receiving money or valuables, and shall be strictly prohibited.
C. Guidelines for handling of indemnification of debts and guaranteeing loans
(1) Payment by proxy : Stakeholders shall not be asked to pay or indemnify debts (credit card bills, tabs, loans) of an employee or family thereof, and offers from stakeholders to pay or indemnify debts shall not be accepted.
(2) Guarantee of loans: Regardless of the type of financial institution providing the loan for the employees or their families, stakeholders shall not be asked to guarantee such loans, and offers to guarantee shall not be accepted.
(3) All acts involving payment by proxy by stakeholders for the indemnification of debts, and the guarantee of loans, shall be considered as receiving money or valuables, regardless of the reason.
D. Guidelines for handling of monetary loans
(1) Employees, executives and their families must not engage in acts of borrowing money from or lending to stakeholders.
(2) The act of taking or giving monetary loans, or paying or receiving loans in association with such, shall be considered as receiving money or valuables, regardless of the reason.
7. Guarantees regarding the future
(promises of employment, promises regarding the conclusion of business contracts, etc.)
A. Accountable Actions and Evaluation Criteria
Item Example Principle of conduct Remarks
Guaranteeing employment Receiving guarantees from stakeholders regarding employment after retirement, arranging help in finding jobs Prohibited  
Promises regarding conclusion of contracts Promises regarding business after retirement, etc. Prohibited
B. Guidelines
(1) Promises to hire after retirement or assist in job finding: Promises regarding employment after retirement, or equivalent promises, shall not be requested to the stakeholders. Suggestions regarding such from stakeholders will not be tolerated.
(2) Promises regarding the conclusion of contracts: Promises from stakeholders regarding the conclusion of contracts following retirement, or any other such benefits, shall not be required by the stakeholders. Suggestions regarding such from stakeholders must not be accepted as well.
(3) Upon receiving suggestions from stakeholders regarding employment or future business, such shall be reported immediately to the department head, then to the Ethics Secretariat.
8. Illegal Solicitation
A. Actions and Judgment Standards
Category Example Action Guideline Note
HR Intervention Intervening in HR related activities including providing benefits by intervening the recruiting and evaluation process Prohibited  
Solicitation arrangement, etc Conducting unfair solicitation and arranging or directing work related to private interests. Prohibited  
B. Action Guidelines
(1) You shall not make direct or indirect illegal solicitations that interrupt fair job performance, against firm policies or laws, and against fair transaction tradition, to a stakeholder or perform a job based on illegal solicitation from a stakeholder.