Lite-On’s Key Stakeholders

The first chapter introduced the stakeholder theory and emphasized the companies’

necessity to care about various stakeholders. Lite-On CSER Committee collects, ranks, weighs and analyzes the most relevant issues regarding each group of stakeholders. In its CSER approach, Lite-On Technology has identified seven major stakeholders:

• Employees

• Customers

• Community

• Investors (shareholders)

• Suppliers

• Non-profit organizations

• Media.

Although not identified among Lite-On Technology’s key stakeholders, its competitors have a tremendous impact on the company’s CSER as it will be explained later.

43 Carbon Disclosure Project, 2009.

44 Personal interview. Lite-On Technology achieved a consolidated revenue of NTD 97.23 billion in 2009.

Employees and Lite-On Technology’s CSER

Lite-On claims to uphold all labor laws and regulations and to comply with the Electronic Industry Code of Conduct designed by the EICC.⁴⁵ Auditors from SGS (an inspection and certification company, which also verified Lite-On CSR report for 2009) conducted EICC training classes in Lite-On factories in Dongguan, China in 2009.⁴⁶ Besides SGS, Lite-On invites experts from academia (e.g. South China Normal University in Guangzhou) and NGOs to give trainings. Lite-On has also developed training programs for operational and management levels on its manufacturing sites and a green supply chain training program for its suppliers. The trainings include various topics, from technology, engineering, to CSR. Due to the absence of computer access in the factories, operational workers are trained in educational classes. For managers, the training takes form of either a class or e-learning, which has been put into practice since 2007.

Employee benefits are meant to be the same for Taiwan and China. However, sometimes it is not easy to achieve same results on both sides of the Taiwan strait:

e.g. in 2010, Lite-On launched a paid volunteer system in order to increase loyalty among employees. Lite-On’s staff is encouraged to take part in volunteering activities and paid financial bonuses if they do so. But due to frequent overtime shifts, employees in China prefer relaxing to volunteering.

Customers and Lite-On Technology’s CSER

Lite-On’s customers are multinational corporations and leading brands in communication, computer and consumer electronics industries, such as Apple, HP, Dell, Acer, Toshiba, Foxconn, Gateway, Hitachi, IBM, Lenovo, LG, Logitech, Microsoft, Motorola, NEC, Nokia, Samsung, Siemens and Sony.⁴⁷ Regarding its relationship with customers and CSER, Lite-On states on its website that “Lite-On’s customers are increasingly requiring strong global citizenship of their suppliers.

Customer satisfaction is one of Lite-On’s core values.”⁴⁸

45 EICC’s Code of Conduct usually serves as a model code of conduct in the IT industry. EICC will be introduced thouroughly in the chapter 5.

46 SGS in China, 2009.

47 SACOM & Pain pour le Prochain, 2008, p. 10.

48 Lite-On website.

To a great extent, it is Lite-On Technology’s global customers who shape its CSER policy by demanding a solid and reliable data set about Lite-On’s environmental, social and financial performance. In 2011, Lite-On put great efforts into the development of framework for CSER data collection. In 2012, the company finally launched a virtual system of environmental accounting with 87 items. The company began to understand that the collection of raw data on its sites is very important and may eventually bring costs savings. Lite-On Technology has the ambition to further improve the CSER system by converting the raw data into 300 performance indexes.

At the moment (June 2012), about one third of this system is already built.⁴⁹ Community and Lite-On Technology’s CSER

Lite-On’s community engagement is primarily demonstrated by activities of its Cultural Foundation. The activities are extensively covered in Lite-On’s CSR reports.

For example, the foundation supports underprivileged children, sponsors cultural and art events, holds industrial design competitions, tree planting and organizes education camps for Taiwan’s indigenous youths. In 2000, the Cultural Foundation established Xinyi Community College. The company also awards young Chinese designers in the yearly Lite-On Awards and thus encourages applicants to submit green industrial design innovations.

Investors and Lite-On Technology’s CSER

Lite-On Technology’s corporate governance framework is composed of shareholders’

meeting, board of directors, audit committee, compensation committee, internal audit and business teams. The board of directors consists of seven directors representing four institutional investors (Lite-on Capital Inc., Dorcas Investment Co., Da-Song Investment Co., Yuan Pao Investment Co.) and three independent directors. Lite-On Technology emphasizes being the only company in Taiwan to possess the compensation committee and having a highly authorized compensation system, in which only the three independent directors possess the right of resolution for the top management compensations. According to the company, investors provide a valuable feedback to the company’s CSER via various communication channels.

49 Personal interview.

Suppliers and Lite-On Technology’s CSER

Lite-On main production facilities are located in Mainland China, as well as majority of the company’s suppliers of components. Some of the Lite-On’s suppliers in China, for example 3CEMS in Dongguan (which contributes up to 80% of revenues from Lite-On WLAN products),⁵⁰ have been working with Lite-On for several years, thus indicating a stable relationship in the company’s supply chain. In its supply chain, Lite-On focuses primarily on improving environmental, health and safety aspects of its business operations. The corporation has developed a basic guideline based on the EICC Code of Conduct and asks suppliers’ management to sign the documents and incorporate their own pledges guaranteeing the social responsibilities.

The emphasis is put on green supply chain and green procurement. The criteria for selecting subcontractors and suppliers follow principles of environmental management:

• Whether the supplier has an environmental management system;

• Whether environmental management requirements have been provided to material suppliers;

• Whether suppliers can meet Lite-On’s concentration limits hazardous substances in materials.⁵¹

In relation to its CSER down the supply chain, Lite-On has developed a supply quality management program. Under this program, Lite-On identifies its critical suppliers as those with an approximate 30% share of revenues. These critical suppliers are targeted for audits by Lite-On and trainings about CSER. In 2011, Lite-On Technology carried out a total of 86 audits on its suppliers’ facilities in China and organized 6 educational courses for them.⁵²

Non-profit organizations and Lite-On Technology’s CSER

Lite-On Technology partners with associations mainly related to the industry in which the company operates (Taiwan Corporate Sustainability Forum, Taiwan Electrical and

50 3CEMS website.

51 Lite-On CSR Report, 2010. Note: Due to the new format of Lite-On 2010 CSR Report, it is not possible to indicate page numbers.

52 Personal interview.

Electronic Manufacturer’s Association, Taiwan Optoelectronic Semiconductor Industry Association, Taiwan Thermal Management Association, The International Commission on Illumination, Climate Savers Computer Initiative, Digital Living Network Alliance, EICC, UPnP Forum, Wi-Fi Alliance, Photonics Industry and Technology Development Association, Renssealer Polytechnic Institute, Sinocon Industrial Standards Foundation, Taipei Computer Association and Taipei Neihu Technology Park Development Association).⁵³

Competitors and Lite-On Technology’s CSER⁵⁴

Competitors play an important role in shaping Lite-On Technology’s CSER. First, Lite-On Technology watches and benchmarks its competitors’ goals. For example, for the reduction of electricity consumption, Lite-On Technology competitors’ goal is a reduction of 1-2% over the period of three years (2011-2014). Lite-On Technology thus set the company’s goal to reduce the consumption by 6% by 2014, taking the year 2011 as a basis. Second, the company also receives a valuable feedback on its CSR from its competitors.