The Midea Group (hereafter referred to as “Midea” or the “Company”) is a technologies group in consumer appliances, HVAC systems, robotics and automation systems, and smart supply chain (logistics). Based on the principle of “creating value for customers”, Midea focuses on continuous technical innovation and is dedicated to “creating a better life for people”. Employees of the Company shall comply with laws, regulations and business ethics to ensure Midea remains an outstanding corporate citizen. Each employee shall carefully read and comply with the regulations in this Code of Business Conduct of Midea Group (hereafter referred to as the “Code.”) Violators will be punished. By establishing the Code, we are providing guidance to all employees so that they can act with integrity when conducting business on behalf of the Company. Nonetheless, the perfect code does not exist and it is also impossible for this Code to cover all issues occurring in business. If a business activity falls outside the scope of this Code, employees should consider whether the current choice is made in accordance with their basic moral compass, whether it is legal, and whether it conforms with the values of Midea.
1. Compliance with Laws, Regulations and Ethical Requirements
1.1 Midea is a global company and our business is conducted in accordance with the laws and regulations of the countries or regions where it operates.
1.2 Each employee of the Company shall abide by the highest ethical standards, conduct business in good faith, respect others, and set strict demands on themselves.
1.3 The integrity and compliance of an organization originate from senior management. Management shall set an example in respect to ethics and integrity, perform its management and supervision duties, and ensure all managed personnel understand their responsibilities pursuant to the Code and other policies of the Company.
1.4 Employees who violate the Code or other applicable laws and regulations may be subject to disciplinary action, depending on the types and severity of the violations, and, where the violations are serious, their employment may be terminated.
2. Fair Competition
2.1 The sustainable development of Midea’s business is possible only by strict compliance with laws and regulations and fair competition.
2.2 The Company refuses to make any monopolistic agreement with any person or entity, or abuse its dominant position in the market. It shall stand against the concentration of business operators that has or may have the effect unfairly or illegally eliminating or restricting competition.
2.3 When conducting market transactions on behalf of the Company, employees shall: comply with all relevant laws, the principles of freedom of choice, equality, fairness and honesty; abide by generally accepted business ethics; and avoid participating in unfair market competition by way of dumping, infringing on other’s intellectual property, false advertising, engaging in collusive tendering, unfairly damaging reputations or other engaging in other unfair competition.
3. Avoiding Conflicts of Interest
3.1 A conflict of interest between the Company and an employee occurs when an employee appears to be, or does not act in the Company’s best interest due to a family (close or extended, so throughout) relationship, beneficial relationship or outside commercial interests.
3.2 Conflicts of interest may be caused by any family relationship or common interests between an employee and a competitor, supplier or customer of the Company, or a family relationship or common interests between internal employees of the Company.
3.3 Employees shall report conflicts of interest and/or any appearances of conflicts of interest promptly and act for the maximum benefits of the Company at all times.
4. Gifts, Entertainment and Hospitality
4.1 Offering gifts, entertainment and hospitality:
4.1.1 To develop external contacts and business relationships, it may be proper to offer courtesy gifts, entertainment, or business banquets that conform to business customs. During these activities, employees must be familiar with the policies on suppliers and customers in advance and act in accordance with such policies.
4.1.2 Gifts, entertainment and business banquets must comply with the standards set by the Company. It is forbidden to present gifts or hold banquets for illegal gains.
4.2 Accepting gifts, entertainment and hospitality:
4.2.1 To the extent that the business practices and local customs are respected, employees may occasionally accept some gifts that have symbolic value or invitations or entertainment of reasonable price, but shall refuse any other gifts, entertainment or invitations.
4.2.2 Employees shall not take advantage of their position to ask for or accept any interests from suppliers, customers or other interested parties.
5.1 Prohibition of commercial bribery: Product competitiveness is the foundation of Midea and the Company aims to manufacture high-quality products and improve services in a fair, honest and ordered business environment. We are against obtaining business opportunities through unfair competition by offering money or other benefits to relevant personnel of counterparties or other personnel that may influence a transaction.
5.2 Prohibition of offering bribery to government officials: Gifts, entertainment or business banquets may violate the integrity requirements of local government officials. Without approval and authorization by the compliance departments, employees shall not provide any property, entertainment or hospitality to government officials or their near relatives. Providing money or other benefits to government officials in the name of the Company or as an individual associated with the company, may violate the laws of the country of business and other countries throughout the world, may incur large fines and/or criminal punishment on individual or Company, or may harm the reputation of the Company.
5.3 Political donations, charitable contributions and sponsorship:
5.3.1 Midea makes no donation to political parties, politicians or political organizations.
5.3.2 As a responsible member of the society, the Company assumes social responsibilities by participating in public benefit undertakings; actively playing a role in education, medical health, livelihood, disaster relief, charity and other social undertakings; and donating funds and goods.
5.3.3 The Company may provide sponsorships for legal business purposes but not for improper competition advantages or other illegal purposes.
5.3.4 All donations and sponsorships must be transparent.
6. Anti-money Laundering
6.1 Employees shall not engage in money laundering activities by covering up and concealing the nature and sources of illegal income and gains made from drug dealings, terrorism, smuggling, embezzlement and bribery, disturbing financial management order, etc.
6.2 The Company shall review the implementation of internal anti-money laundering tasks, and conduct anti-money laundering investigations on suspicious high-amount transactions without delivery and sales records in the system and without clear transaction reasons.
6.3 During the course of establishing business relations or entering into transactions with clients, the Company will follow the "Know Your Customer" principle to know and identify the clients, and, according to the applicable laws and regulations, provide assistance to financial institutions which conduct their "Know Your Customer" investigations.
7. Compliance with Export Control and Customs Laws
7.1 Midea complies with the export control and customs laws applicable in the countries where it operates. Export control is generally applicable to the transfer of critical goods, services, hardware, software or technologies crossing the borders of some countries, including email transmission and other forms of network access methods. It may also include the transfer of critical information to certain individuals in the same country. Direct or indirect exports to or imports from sanctioned countries or parties may violate export control laws, and countries or parties may be designated and sanctioned by the United Nations or relevant countries for diplomatic policy, public order, and national security considerations, or their involvement in criminal activities. Violations of the aforesaid laws and regulations may result in severe punishment, including but not limited to termination of employment, fines, imprisonment, revocation of import and export licenses, adding into trade sanction lists and exit/entry restrictions, etc.
7.2 Employees engaged in the import & export business of the aforesaid goods, services, hardware, software or technologies shall comply with applicable laws and regulations about economic sanctions, export control and imports, as well as related policies and procedures established by the business department they work for.
8. Prohibition of Transactions Using Inside Information
8.1 Before publishing confidential information of Midea, especially information that may potentially affect the securities price of the Company, no employee shall conduct securities trading with such information, give securities purchasing advice based on the information, publish the information, or disclose it to any third party who is not entitled to know, or assist others in manipulating the prices of shares and their derivatives. Otherwise, the employee may violate the law and face punishment.
8.2 All employees, directors, supervisors and senior management of the Company are forbidden to trade securities by using inside information. They shall also comply with the restrictive legal regulations on the purchase & sales of the Company's shares, including restrictions on the proportion of shares sold in a special period or shares reduced, as well as the restrictions on short-swing trading and trading in the window period.
8.3 If an employee has the knowledge of non-public information, he/she shall be prudent in both words and actions.
9. Protection of the Assets and Reputation of the Company
Assets and reputation are the essential ingredients for Midea to develop and grow. Each employee shall protect the assets of the Company within their control scope, and maintain and improve the reputation of the Company in all countries. The assets of the Company include tangible assets and intangible assets. Intangible assets include intellectual property right, non-public data, information, and other business secrets.
9.1 Tangible assets:
9.1.1 Tangible assets of the Company include cash, property, office supplies and facilities, machines and equipment, inventory products and parts, stamps, vehicles, computer hardware systems, and other materials.
9.1.2 Employees shall protect the Company's physical assets from being stolen, lost, damaged or misused.
9.2 Intellectual property: Intellectual property includes patents, trademarks, copyright, know-how, technical secrets, computer source code, software programs, and other intellectual achievements made at work that are owned by the Company and must be protected. It is the technical achievement of the Company made in reliance on the huge input of human and material resources, and an important asset concerning core competitiveness. All employees have the responsibility to protect all intellectual property of the Company.
9.3 Trade secrets: Each employee shall maintain the consciousness of protecting the Company’s trade secrets including product plans, pricing, business strategies, and take necessary and reasonable confidentiality measures for technical information, business information and other trade secrets that are accessed understood and obtained at work in a cautious and honest manner. Without prior approval, the information must not be disclosed to the third parties or any other employee who lacks the right to know for any reason or in any form. Where an employee leaves his or her job, he/she shall return all obtained materials relating to the technical and business information of the Company and shall not copy, disclose, publish or sell such information.
9.4 Reputation: The reputation of the Company improves by continuously innovating products, optimizing services, improving management quality, treating customers and vendors fairly, undertaking social responsibilities and other practices during market competition. Since the recognition by consumers and the public is critical to the sustainable development of the Company, every employee shall maintain the Company’s good reputation, and not make any speeches, statements or reports publicly or through the media, or social platforms, that may damage the image and business reputation of the Company. To ensure provision of accurate information to the media and the public and maintain the Company’s reputation, without approval from the management of the business units they belong to or the Group functions responsible for public relations or investor relations in accordance with their mandates, employees shall not accept the requests for information or interviews from the media or the social public. Instead, the employee must pass the requests to the departments responsible for information disclosure or public relations, or take actions only after obtaining written approval from the above departments. To the requests from financial media or financial analysts, only the Group function responsible for investor relations can give such approvals.
10. Compliance with the Business Approval Matrix System of Midea
“Operate as per authorization” is the core value of Midea. Reasonable centralization, ordered decentralization, well-regulated authorization and the proper use of authorization constitute the basic principles of the Company’s business regulations. To ensure ordered business management, the Company has established a unified process approval matrix system, and each employee shall comply with this system.
11. Cooperation with Business Partners
Midea expects its suppliers, distributors and other business partners to comply with the relevant portions of this Code, the Company's values and the laws observed by the Company, and adopt similar principles in terms of stakeholder, environmental responsibility, anti-corruption, fair competition and other matters.
12. Accurate and Complete Work Logs
12.1 The financial records of Midea, including accounting vouchers, financial books, accounting reports, must be clear, complete, accurate and comprehensive, and must not be intentionally deleted, altered, forged or falsified;
12.2 Business records must promptly, accurately and clearly reflect the nature and specific status of each transaction. Employee records, customer information, financial vouchers and contract documents in paper or electronic form generated during the business contact must be properly kept;
12.3 The meeting minutes in the work and the Company’s internal process applications should be as normative as possible. Employees shall pay attention to preserving important e-mails and business communication records for emergency needs.
13. Providing a good working environment
13.1 Midea is committed to fully complying with the applicable laws and regulations on labor and workplace environment in the countries or regions where it operates, respecting the rights and interests and values of its employees and providing good remuneration and benefits, and a healthy and safe working environment to employees. It has established career development paths and provided training to enhance employee skills.
13.2 Drug and alcohol abuse will seriously impair an employee’s ability to work safely, will pose a safety risk, and may reduce productivity and general employee morale. Midea strictly prohibits possession or use of illegal drugs or alcohol on Company property; employees shall not use any illegal drugs or alcohol during work or work under the influence of illegal drugs or alcohol, except for moderate alcohol consumption in group activities, as well as compliance with the legal drinking age.
13.3 The Company forbids any discrimination based on race, skin color, culture, religion, political opinion, marital status, gender, and any other characteristic protected by law, and adopts a zero-tolerance policy to harassment, violence or other aggressive behaviors in any form.
14. Privacy Protection
14.1.1 Unless otherwise authorized by the employee or for legal use, the Company shall not disclose any employee’s personal information obtained during recruitment or management to any third party without performing due diligence regarding that third-party’s security protocols. Employees shall not take advantage of the Company’s internal information network or other channels to illegally detect, collect or provide employee information to others, and shall not disclose any personal information about any employee obtained at work to any third party who does not have the right to know.
14.1.2 The Company may view, copy and use the documents, e-mails, videos and audios that any employee stores in or transmits from a work computer, records of business communication by a work phone or other means of work-related communication, attendance, business trips, and any other information about work. Employees shall not store private personal information on a work computer as such information will not fall under privacy protection.
14.2 Customer Information such as user data obtained during business activities will be kept strictly confidential.
15. Using Resources in a Sustainable Manner, Paying great Importance on Environmental Protection and Providing High-Quality Products and Services
15.1 Midea complies with national and international standards on environmental protection. Environmental protection and smart applications have become the development direction of home appliances. The Company makes a positive effort to promote energy-saving appliances and avoid wasting resources. The Company actively promotes the use of clean energy during production to reduce pollution and emissions. The employees are required to have a sense of conservation to avoid waste of resources during production and work.
15.2 Midea is committed to providing products and services that meet or exceed customers' expectations on quality, reliability, safety and value to win the trust of customers. The Company adopts and implements strict product quality control standards and systems, and ensures that all products are designed and manufactured in accordance with the laws and regulations on product quality and safety, as well as the requirements contained in the contracts with customers. The Company is also devoted to improving the product and service quality in partner with the suppliers by implementing quality improvement plans, and maintains and enhances the product and service image of the Company.
16. Consultation and Reports
16.1 The Code describes the legal and ethical principles of Midea but does not answer all the questions that employees may encounter in their daily work. If an employee is not sure how to apply or understand the Company’s compliance principles or has any other questions, he/she may consult the legal & compliance officer in his/her organization or Midea.
16.2 When the employee is aware of or has any evidence of any violation of the Code, he/she must report such violations through the relevant channels of the Company. Midea encourages the employees to make a compliance report by using their real names and all complaints will strictly be kept confidential, such as the content of the complaints and the personal information of the complainant. Midea will not tolerate any forms of retaliation against a person reporting conduct. Employees who feel they are retaliated after reporting can report the issue to their management or group compliance departments.
16.3 The employee can choose the following venues to report the violations of laws or this Code:
Immediate supervisor: The employee may report to their immediate supervisor or higher levels of managers if he/she wishes；or Legal & compliance officer: The employee may consult and report to the legal & compliance officer in his/her organization or Midea Group through Midea Connect, e-mail, telephone, etc.
The employee may also:
Call the complaints hotline: +86 757 2660 5599
Send an e-mail to: Compliance@midea.com