To be a global leading company of the 21 st century Ethical Standard
Contents 1. Understanding Ethical Management 2. Ethical Standard 3. Code of Conduct 4. Q & A 1 4 10 16
1. Understanding of Ethical Management 1
1. Understanding of Ethical Management While the importance of ethical management has been strengthened among enterprises, it is not easy to practice properly. In order to implement ethical management properly, the understanding of management and of its employees on ethical management and practical endeavors to exercise ethical management are critical. There are some misunderstandings of ethical management as an effective control measure against corruption of employees or a popular tool of management innovation, but the genuine meaning of ethical management is to recognize ethical responsibility expected under social customs as basic obligations of the enterprise in additional to economic and legal responsibilities of the enterprise and to regard ethical compliance as the action principle of the enterprise. It means that the enterprise must engage in business management in order to gain trust from all stakeholders including customers, shareholders, employees, competitors, suppliers, government and local society by taking full ethical responsibilities of the enterprise. Accordingly, it is not a simple concept to be more ethical in business activities. Rather, it is desirable to recognize ethical management as a means to improve enterprise competitiveness and maximize economic value added by correcting wrong practices or cost structures to fit ethical standards. 2
Ethical Standard of Hyundai Elevator An enterprise profit seeking and social responsibilities must be balanced and harmonized for sound development. If such balance and harmony is collapsed, social responsibility will not be implemented caused by failure of profit seeking, and in turn, the failure of realization of social responsibilities will cause moral defect of the enterprise. Enterprises spend too much energy on profit seeking. If the enterprise seeks effective and efficient measure of profit distribution and social return, which turns to profit seeking again, there will be no need to mention about ethical management. It is not acceptable to exploit ethical management as a marketing method or a management method arguing moral and ethical pride of the enterprise and stressing efficiency of profit. Instead, it would be more efficient to complement any shortages, to sprout sound culture of the enterprise and to make balanced organizational composition through mutual check and balance. As such, ethical management must be positioned as a management philosophy to implement corporate social responsibility. 3
2. Ethical Standard 1) Customer 2) Shareholder and Investor 3) Employee 4) Partner and Competitor 5) State and Society 6 6 7 8 8 4
Ethical Management Charter Hyundai Elevator Co., Ltd aims to be a reliable enterprise by respecting fair competition and free competition market order, contributing to state and society with ethical management, complying with law and corporate ethics and satisfying social demands. Therefore, we enact the ethical management chart to set a standard of value decision and behavior by all employees not only in corporate activities., but also in everyday life. And so on, we grow and develop with all stakeholders and settle transparent corporate cultures and develop as a global leading enterprise in the 21st century counted on by customers and market 5
Ethical Standard of Hyundai Elevator 1) Customer Do the best for customer satisfaction with utmost faith for customer. The enterprise must do the best for customer satisfaction by providing high quality products and services. The enterprise must keep promises and make efforts to gain trust from customers. The enterprise must think from the perspective of customers and act on behalf of customer satisfaction to gain customer loyalty. 2) Shareholder and investor Do the best for equality and fairness to protect shareholder s profit and increase corporate value. The enterprise must strive to be a safe enterprise to invest through enterprise activities that respect shareholder s rights and profit. 6
2. Ethical Standard All management resources must reflect facts of corporate transactions according to the accounting principle. The enterprise should provide reliable and useful information on overall management which shareholders and investors need. 3) Employee Do the best to establish corporate culture that respects human dignity based on companion reliability. The enterprise must respect employee s human dignity, encourage creative thinking and autonomous behavior and provide active support and educational opportunity to develop employee s capability. The enterprise should apply fair opportunity and criteria to create mature organization culture based on mutual reliability and understanding. All employees must comply with laws and regulations, corporate policy, general company rules and ethical standard in fulfilling their duties. 7
Ethical Standard of Hyundai Elevator 4) Partner and competitor Seek fair competition with competitors and mutual profit with the counterpart. The enterprise must establish fair transaction order through a clean and transparent transaction environment with partners. The enterprise must seek joint development through mutual cooperation for sound growth of competitors in the long term. Fair opportunity must be provided in all transactions and mutual relation must be developed through transparent transaction. 5) State and society Seek eco-friendly management based on a law-abiding spirit and contribute to the development of state and society. The enterprise must respect laws, regulations, state policy and make an effort towards corporate social responsibility. 8
2. Ethical Standard The enterprise must fulfill the mission to become a reliable enterprise among customers, society, the world and take initiative in social contribution to construct an affluent society. The enterprise, pursuing globalization, must continuously implement environmental management programs to realize better environment. 9
3. Code of Conduct 1) Fair implementation of Duty 2) Conflicts of Interest 3) Attitude of Employee 4) Company Assets and 4) Information Protection 5) Obligation of Ethical 5) Standard Compliance 11 12 13 14 15 10
3. Code of Conduct 1) Fair implementation of duty Perform all transaction based on a free competition principle ensuring equal opportunity of participation, establish mutual reliability and cooperative relation and seek mutual development with all stakeholders in the long term. (1) Fair opportunity of transaction Vendor registration must be performed by providing equal opportunity of participation to all suppliers, according to objective and fair criteria. (2) Fairness of transaction procedure Transaction must be performed from equal positions after conditions and procedures are negotiated with the transaction counterpart.. All transaction must be done fairly from equal positions and no unjust behavior in any form must be required using superior status. Information necessary for transaction must be provided on time through proper procedure and transaction result must be updated and supplemented through periodic evaluation based on fair criteria. Relevant law and regulation must be kept for a fair transaction and unfair behavior must not be exercised. 11
Ethical Standard of Hyundai Elevator 2) Conflicts of interest Employees and their family must not receive money, service and other benefits directly or indirectly from stakeholders such as dealers or people who desire to make transaction. (1) Bribery Employees must not receive any gifts from stakeholders in relation to business. It will be acceptable to receive expenses of congratulations and condolences within the general scope recognized in the social practice. Act of receiving through family or friend will be considered on behalf of the employee. (2) Benefits Employees must not receive benefits regarding business from stakeholders (traffic, accommodation, tourism, guidance and event support) Employees must not receive entertainment regarding business from stakeholders (meal, drink, sports and entertainment). Any payment and redemption by stakeholders on behalf of employees regarding business will be considered as bribery. 12
3. Code of Conduct 3) Attitude of employee Employees must make an effort to develop organization culture based on mutual reliability through an upright value system and ceaseless selfdevelopment and fair implementation of duties. (1) Settlement of sound corporate culture Employees must create sound corporate culture by maintaining high ethical value, personal dignity and mutual respect. (2) Mutual respect of employees Employees must respect each other and keep basic etiquette in the work environment. Employees must not discriminate others based on education, gender, religion, place of origin, age and physical characteristics. Employees must not make any improper speech or action to others or defame others. (3) Self development Employees should portray a proper image as capable personnel and make a steady effort for self-development to meet globalized standards. 13
Ethical Standard of Hyundai Elevator 4) Company assets and information protection Employees must protect company assets and information and must not use them for private purposes or for personal interest. (1) Protection of corporate assets Employees must protect physical property of the company and must use budget in accordance with proper standard and purpose. Employees must not use company assets for private purpose without the company s approval. (2) Information protection Employees must not seek unjust interest by utilizing important information of the company without prior consent. Employees must not provide customer information to the 3 rd party illegally. (3) Prohibition of insider dealing and information use Employees must not engage in unfair dealing using company s important non-disclosed information. Employees must not release information obtained during work without prior consent. 14
3. Code of Conduct 5) Obligation of Ethical Standard compliance All employees must comply with the Ethical Standard faithfully. In the event of violation, employees must take responsibility of ther actions in accordance with corporate Ethical Standards (1) Criteria of behavior of value judgment All employees must understand the meaning of Ethical Standard and make it a criteria of value judgment and behavior by exercising it in corporate activities and everyday life. Employees must not force other employees to violate Ethical Standard or must not overlook illegal behavior. (2) Obligation to report and confidentiality If any employee violates Ethical Standards or finds a colleague violating Ethical Standards, it must be reported to the Audit Department. Employees must not give any disadvantage to the report or declarer and must not leak personal information. Employee must keep confidentiality, when he/she happens to know the report during work and may be punished according to the related regulation for leaking information. 15
4. Q & A 16
4. Q&A Q. Why is ethical management needed? A. Enterprises performing based on transparency can develop as a global enterprise. Otherwise, it may fall behind or disappear. Such examples can be seen frequently. International society suggests ethical management as the top priority for the evaluation of corporate competitiveness. Establishment of policy strengthening ethical compliance, and establishment of ISO and other ethical management standardization in various countries have been widely progressed. Therefore, practice of efficient ethical management compliance system is a determining factor for survival and development of the enterprise. Q. If I violate ethical management or find other employee s violation of ethical management, that can be solved internally, is it acceptable not to notify? A. Even if internal solution is available, the following cases must be notified. If there is no possibility of improvement with awareness of doing wrong? If there is a possibility of causing great harm to the company internally and externally? 17
Ethical Standard of Hyundai Elevator Q. Lastly, cyber ethical management education, I learned that 3C are essential for successful settlement and implementation of ethical management. Please tell me in detail. A. For effective introduction and practice of ethical management, 3 C must be equipped. It means Code of Conduct Compliance Check Organization Consensus by Ethics Education. B. Code Of Conduct is a specific and documented method for the compliance of corporate ethics. It suggests ethical management as the top priority among the corporate value system including business philosophy, mission and principle, and needs to include specific and practical details. C. Compliance Check Organization is about checking whether the organization and system are equipped to practice ethical management or not. Consensus by Ethics Education provides repetitive and routine PR and education for compliance of corporate ethics so that employees may show continuous interest and positive awareness on ethical management. 18
4. Q&A Q. Is there any obligation to report violations which took place before the introduction of ethical management? A. We do not specifically deal with violation before the introduction of ethical management. However, if the result of such violation continues to affect works up to the present, it must be solved as soon as possible. Otherwise, it will constitute violation of Ethical Standard causing disadvantages. Q. It is the rule to report or declare a person s violation of Ethical Standard. What if any conflict at work is expected after reporting or declaration? A. We will keep strict confidentiality of information of the informer to prevent any such disadvantage. As wrong behavior can be a bigger problem, it is more desirable to prevent such issues in advance. Q. What if the identity of the informer is disclosed after report of such violation? A. It is in principle to keep strict confidentiality on the identity of the informer. If the identity of the informer is exposed inevitably, we will do our best to prevent the informer from any disadvantage according to the intention of the informer. 19
Ethical Standard of Hyundai Elevator Q. Even if Ethical Standard or Code of Conduct is violated, it is difficult for the subordinate to refuse the instruction of the supervisor in reality. What is the solution in this case? A. If Ethical Standard or Code of Conduct is violated, it is subject to punishment despite the instruction of supervisor. If the instruction of supervisor is inordinate or unjust, it must be refused and reported to the ethical management dept. Q. Is it not acceptable to borrow money from an employee of the customer whom I know? A. In principle, lending and borrowing money with stakeholders is prohibited. But, if it is inevitable, lending and borrowing money in a normal condition is acceptable. The interest with the other party is not problem, but the special benefit with other persons during the lending and borrowing money itself can cause a problem. Q. My supervisor insults my character which I cannot bear. What should I do? A. Solving the problem through communication is the best solution. If the other party does not change, contact the Audit Dept. to get help. 20
4. Q&A Q. I don t know the accurate criteria of receiving gifts or limit of entertainment expense. What is the case in advanced countries? A. In most of advanced countries, when income is high, the limit of entertainment is low. IBK, an American representative company, sets the limit to $10. The majority set limit to $25 and some set the highest limit to $50. Of course, the amount may be important, but the intention or objective of the entertainment expense is regarded much more important. Q. Isn t there a contradiction between the principle of transparency and confidentiality for mutual development in the company? A. You need to check if the issue deals important confidential information with the relevant department or staff. If it is not essential for the transaction with the client, you don t have to provide such information. Q. If I want to report any unethical behavior in the company, what procedure should I take? A. You can either use cyber ombudsman in our homepage or contact the Audit Dept. directly for help. 21
Ethical Standard Date of Issue : 2006.09 Date of Revision : 2016.01 Edit : Audit Department Telephone : +82-31-644-4937 Fax : +82-2-745-4227 22