CODE OF BUSINESS CONDUCT AND ETHICS
This Code of Business Conduct and Ethics (the "Code") applies to all of the
employees, officers, advisors and directors of Baidu.com, Inc., a company
incorporated in the Cayman Islands, its subsidiaries and/or affiliated entities
(collectively, the "Company"), whether such person works for the Company on
a full-time, part-time, consultative, or temporary basis (each, an "Employee"
and collectively, the "Employees").
This Code contains general guidelines for conducting the business of the Company
consistent with the highest standards of business ethics, and is intended
to qualify as a "code of ethics" within the meaning of Section 406 of the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. To the extent
this Code requires higher standards than those required by commercial practice
or applicable laws, rules or regulations, the Company adheres to these higher
This Code is designed to deter wrongdoing and to promote:
This Code shall be implemented at all levels of hierarchy of the Company.
All Employees are responsible for being aware of, adhering to and ensuring
that others abide by the Code.
- compliance with applicable governmental laws, rules and regulations;
- honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional relationships;
- full, fair, accurate and timely disclosure in reports and documents
that the Company will file with, or submit to, the U.S. Securities and
Exchange Commission (the "SEC") and in other public communications made
by the Company.
- Applicable Laws, Regulations and Policies
Each Employee has an obligation to comply with the laws of the cities, provinces,
regions and countries in which the Company operates. This includes, without
limitation, laws covering securities, labor, employment, commercial bribery
and kickbacks, copyrights, trademarks and trade secrets, information privacy,
insider trading, offering or receiving gratuities, employment harassment,
occupational health and safety, false or misleading financial information
or misuse of corporate assets. Employees are expected to understand and comply
with all laws, rules and regulations that apply to their respective positions
at the Company.
Each Employee shall immediately report to the Company in accordance with the
Whistleblower Rules and Procedures, as stipulated in Section 10 of this Code,
any violations of the applicable laws and regulations as well as of any provisions
of the Code.
If any doubt exists about whether a course of action is lawful or in compliance
with the Company's policies, the Employee should seek advice immediately from
his/her departmental head, HR director, the Company's in-house lawyers or
CEO to avoid any possible violations. Failure to do so constitutes a violation
of the Code.
- Employment Practices
- 4.1 Observing Applicable Employment Laws and Agreements
The Company observes fair employment practices in every aspect of its
business. The following is intended to be a summary of the Company's employment
practices. The Employees must comply with all applicable labor and employment
laws and employment agreements entered into between the Company and Employees.
If there is any conflict between the applicable law and this Code, the
applicable law prevails.
- 4.2 Working Environment
The Company is dedicated to creating a high-quality working environment
under which Employees respect and trust each other such that each Employee
acts in an honest, friendly and proactive way with a responsible attitude
and high moral standard.
- Harassment Prevention
The Company prohibits harassment in any form, whether physical or
verbal and whether committed by supervisors, non-supervisory personnel
or non-Employees. Harassment may include, but is not limited to, offensive
sexual flirtations, unwanted sexual advances or propositions, verbal
abuse, sexually or racially degrading words, or the display in the
workplace of sexually suggestive objects or pictures.
- Discrimination Prevention
The Company is committed to providing equal opportunity and fair treatment
to all individuals on the basis of merit, without discrimination on
the grounds of race, color, religion, national origin, sex (including
pregnancy), age, disability, marital status or other characteristics
protected by law.
- No Alcohol and Smoking
The Company is committed to maintaining a non-smoking workplace. Smoking
is prohibited on the premises of the Company including bathrooms.
Drinking alcoholic beverages is prohibited while on duty or on the
premises of the Company, except when expressly allowed at functions
or at events sponsored by the Company or permitted by the Company.
- Violence Prevention
The Company considers the safety and security of its Employees to
be vitally important. The Company does not tolerate violence, hostility,
or threats of violence at its workplace.
- Protection of Privacy of Employees The Company is committed to
giving due respect to the privacy of its Employees. The Company shall
refrain from interfering with or paying undue attention to the personal
lives of its Employees unless the personal actions and behaviors have
a negative impact on the Employee's work performance or the reputation
and legitimate commercial interests of the Company.
- Open Communication
The Company encourages open and honest communication about different
- Valuing Employees as Important Assets
The Company believes its Employees are important assets and keys to
its success. The Company is committed to establishing a fair and equal
evaluation and incentive mechanism to maintain a stable and highly
efficient working environment. The Company strives to maintain its
success by providing opportunities that enable Employees to realize
their values and careers.
- Conflicts of Interest
The Company expects that each Employee will use his/her best efforts
to discharge his/her duty in an honest and upright manner. This requires
each Employee to avoid conflicts of interest between his/her personal
interest and the interest of the Company. A conflict of interest occurs
when an Employee's private interest interferes, or appears to interfere,
in any way with the interests of the Company as a whole. Employees
should actively avoid any private interest that may influence their
ability to act in the interests of the Company or that may make it
difficult to perform their work objectively and effectively. For detailed
provisions regarding conflicts of interest, please refer to Rules
for Avoiding Conflicts of Interest. Besides stipulated prohibitions
on employees in Rules for Avoiding Conflicts of Interest, Baidu.com,
Inc., as a Nasdaq-listed company, is prohibited from directly or indirectly,
including through any subsidiary, extending or maintaining credit
in the form of a personal loan to or for any of its directors or officers
(or equivalent thereof)
- 4.3 Illegal or Improper Actions
Employees are prohibited to conduct illegal or improper actions, which
include, without limitation:
- any action that violates applicable laws or public interests;
- engagement in malpractice or dereliction of duties;
- failure to discharge responsibility, duty and obligation;
- failure to disclose ancillary agreements or private agreements entered
into with an agent, client, supplier or partner;
- misrepresentations regarding personal experience or personal physical
and medical conditions to the Company; and
- disparaging the Company, other Employees or competitors of the Company
without any legitimate ground.
- 4.4 Deception and Similar Violations of Rules
All Employees must be conscious of deceptive acts, misleading or false
book entries and any other prohibited acts provided in Rules Prohibiting
Side Agreements, Rules for Avoiding Conflicts of Interest and Rules for
Use and Disclosure of Information. If an Employee becomes aware of any
such acts, the Employee shall immediately report the act to the Company
in accordance with Whistleblower Rules and Procedures stipulated in Section
10 of this Code.
- Relationships with Competitors
The Company is committed to free and open competition in the marketplace.
Employees should avoid actions that would be contrary to laws governing competitive
practices in the marketplace. Such actions include misappropriation and/or
misuse of a competitor's confidential information or making false statements
about the competitor's business and business practices or unduly impairing
the commercial goodwill of its competitors.
- Illegal or Improper Payments
The Company's business conduct is founded on the principle of "fair transaction."
Therefore, the Company and Employees can not offer kickbacks, bribe others,
or secretly offer commissions or any other personal benefits in any form.
During the course of promoting the Company's products and services, if it
is necessary to offer discounts to customers, such discounts must be given
openly, evidenced by supporting documents and shall be reported to the accounting
department for book entry.
- Public Disclosure, Financial Management, Accounting Procedures and
- 7.1 Complete, Accurate and Timely Disclosure
Upon the completion of its initial public offering, the Company will be
a public company which is required to report its financial results and
other material information about its business to the public and the SEC.
It is the Company's policy to promptly disclose accurate and complete
information regarding its business, financial condition and results of
operations. Employees must strictly comply with all applicable standards,
laws, regulations and policies for accounting and financial reporting
of transactions, estimates and forecasts. Inaccurate, incomplete or untimely
reporting will not be tolerated and can severely damage the Company and
result in legal liability.
The Company endeavors to design, establish and operate an effective internal
control over accounting and financial reporting to ensure that all transactions
will be duly authorized and recorded, complying with the applicable laws.
Internal control includes, without limitation, written policies and procedures,
reviews and monitoring by various levels of management, budgetary control
and many other examinations and settlements.
The Company is committed to designing and implementing a set of disclosure
procedures to ensure that all information required to be disclosed by
the relevant regulatory bodies and supervisory authorities will be disclosed.
Each Employee must be aware that it is not only the finance department's
responsibility, but also his/her responsibility to follow the internal
control and disclosure procedures to ensure that the information disclosed
is complete, full, accurate, timely and understandable. The Company requires
every Employee to be familiar, and strictly comply, with its internal
control and disclosure procedures.
Specifically, Employees shall adhere to the following guidelines, which
include, without limitation:
- All commercial transactions shall be duly authorized and relevant
records must be true, complete and accurate in all material respects.
- All accounting records and financial statements derived therefrom
shall comply with applicable laws and regulations and shall not contain
any false or misleading entries.
- All Employees shall fully abide by the Company's Records Retention
Policy and act as required by the Company's internal auditors or outside
- No Employees shall withhold information required to be disclosed
to the Company's internal auditors or outside auditors or make false
or misleading statements to the auditors.
- Undisclosed or unrecorded funds, payments or receipts are strictly
prohibited. Employees shall promptly report any possibility of inaccurate
or incomplete financial reporting. Particular attention should be
- financial results that seem inconsistent with the performance of
the underlying business;
- transactions that do not seem to have an obvious business purpose;
- requests to circumvent ordinary review and approval procedures.
- 7.2 Public Communications
The Company places a high value on its credibility and reputation. What
is written or said about the Company in the news media and investment
community directly impacts its reputation, positively or negatively. The
Company's policy is to provide timely, accurate and complete information
in response to public requests (media, analysts, etc.), consistent with
its obligations to maintain the confidentiality of competitive and proprietary
information and to prevent selective disclosure of market-sensitive financial
- Compliance with Regulation FD and Communications with Investment
Community The Company is strongly encouraged to follow the requirements
of Regulation FD ("Fair Disclosure") promulgated under the
U.S. securities laws in the same manner as if it were a U.S. domestic
reporting company. Regulation FD provides that, when a company discloses
material, non-public information about the company to securities market
professionals or shareholders (where it is reasonably foreseeable
that the shareholders will trade on the information), that company
must also instantaneously disclose the information to the public.
"Securities market professionals" generally include analysts,
institutional investors and other investment advisors.
Only the Investor Relations Manager is authorized to disclose information
about the Company in response to requests from securities market professionals
or shareholders. No Employee shall, without first obtaining explicit
approval from the Investor Relations Manager, communicate directly
with the investment community (including but not limited to shareholders,
analysts, fund managers or potential investors) any information regarding
the Company, regardless whether such information has been disclosed
publicly or not. If an Employee receives a request for information
from any securities market professionals or shareholders, he or she
should promptly contact the Investor Relations Manager to coordinate
a response to such request.
- Communications with Media
No Employee shall communicate with any media, publicly or privately,
without first consulting with the Company's personnel responsible
for releasing information. In the event any issue arises that may
emerge as a potential public relations emergency, such as customer's
complaints written on a public forum, Employees shall immediately
report such incident to the personnel responsible for releasing information.
If any member of the media asks for information about the Company
or makes any other requests, Employees shall refer their inquiries
or requests to the Company's Investor Relations Manager. For more
detailed provisions regarding relationships with the media, Employees
shall refer to Rules for External Communications by Senior Management
and Other Employees to ensure that every Employee will act in accordance
with the prescribed conduct rules.
- Business Partners, Suppliers and Clients
- 8.1 Procurement of Goods and Services We guarantee fair dealings with
our suppliers and we choose our suppliers through a fair evaluation of
competitive bids. No Employee shall discriminate against or deceive a
supplier. The decision to choose a particular supplier shall be made by
reference to the price, service, quality and reputation of the supplier
as considered in the context of the Company's long-term commercial interests.
All Employees should endeavor to deal fairly and honestly with the Company's
suppliers. No Employee shall attempt to unduly influence the process of
choosing a supplier or treat any particular supplier on a preferential
basis that would damage the supplier assessment and selection process.
Employees should not accept or solicit any personal gains from any supplier
that might compromise, or appear to compromise, their objective assessment
of the supplier. Employees shall hold the pricing or product information
provided by the supplier or potential supplier in confidence. Execution
of a supply agreement must be properly approved. A supply agreement must
be specific as to the service and product involved, payment term, contract
price and expenses, and the purchase price must be consistent with the
service or products involved.
- 8.2 Gifts and Entertainment
The Company's business is founded on the principle of "fair transaction."
Therefore, no Employee may receive kickbacks, bribe others, or secretly
receive commissions or any other personal benefits. Appropriate business
gifts and entertainment are welcome courtesies, however, giving or receiving
gifts or entertainment is deemed by the Company as tending to impose an
improper influence on a person.
No Employee or his/her family members shall receive gifts, services, touring
arrangements and entertainment that may affect his/her judgment in fulfilling
his/her obligations to the Company.
Each Employee must report to his/her departmental head any gifts offered
and seek the departmental head's approval prior to receiving such gifts.
Each such case shall be filed with HR department at the same time. Any
Employee who is faced with an inducement to any particular business decision
shall report the case to his/her departmental head. Employees may only
accept gifts that do not carry any commercial value, such as a notepad
or calendar. Employees should not accept gifts under the following circumstances
if such gifts:
All gifts and entertainment expenses made on behalf of the Company must
be properly accounted for in expense reports.
- may result in any unnecessary or unwanted publicity of the Company;
- may influence the Company or place the Company in a dilemma;
- may obligate the recipient in any way; or
- are in the form of cash or cash equivalents.
- 8.3 Relationships with Customers or Potential Customers
The Company's business success depends upon its ability to cultivate lasting
customer relationships. The Company is committed to dealing with customers
fairly, honestly and with integrity. Specifically, each Employee should
keep the following guidelines in mind when dealing with customers or potential
- Information the Company supplies to customers should be accurate
to the best of its knowledge. Employees should not deliberately misrepresent
information about the Company or its competitors to customers. Comments
on its competitors or making comparisons thereof must be fair and
accurate and based on publicly available information.
- No Employee may enter into an ancillary agreement or private agreement
with customers other than the Company's standard form of agreement.
- No Employee may directly or indirectly bribe government officials
in any form for the purpose of acquiring or retaining certain customers.
- 8.4 Compliance with Relevant Requirements in the Company's Other Policies
Employees must comply with other requirements related to business partners,
suppliers and clients stipulated in the Company's policies and rules other
than this Code, including, without limitation, Rules Prohibiting Side
- Confidentiality and Protection of Company Information and Assets
- 9.1 Use and Disclosure of Company Information In order to:
- ensure that all of the Company's Employees keep in strict confidence
the confidential information regarding business, technology and other
aspects, as a property of the Company, without privately disclosing
the aforesaid information to any third parties; and
- comply with all applicable laws and regulations concerning "material
non-public information," protect the material, non-public information
from being disclosed without authorization and guard against misuse
of the "material non-public information" in transactions of the Company's
securities, the Company formulates and adopts Rules for Use and Disclosure
of Information, which provides guidelines to the Employees in fulfilling
their responsibilities regarding the confidentiality of information.
- 9.2 Protection of Company Assets It is each Employee's responsibility
to safeguard the Company's assets against damage, misuse, theft and inadvertent
access by others and comply with all requirements related to the Company's
assets. The Company's assets include, without limitation, information,
technical materials, software, information systems, construction, equipment,
files and cash. The use of the Company's assets is limited to the Company's
legitimate business purpose. Upon termination of employment, or at such
time as the Company requests, an Employee must return to the Company all
of its property without exception, including files and all forms of medium
containing confidential information, including any and all duplicates.
All inventions, creative works, computer software, and technical or trade
secrets developed by an Employee in the course of performing the Employee's
duties, or primarily through the use of the Company's materials and technical
resources while working at the Company, shall be treated as the intellectual
property of the Company and, as confidential information, shall be protected
by the Company's Rules for Use and Disclosure of Information. The Company
respects the proprietary rights of other companies and requires its Employees
to comply with the laws and regulations that protect such proprietary
- Violations Reporting and Non-retaliation
- Violations Reporting
In order to ensure that all Employees as well as other companies, organizations
and individuals who deal with the Company have an effective channel to
report non-compliance of the Code and related policies, the Company institutes
Whistleblower Rules and Procedures. All Employees are obliged to report
any known or suspected violations to designated departments according
to the Whistleblower Rules and Procedures.
- Non-Retaliation of Reporting Retaliation by the Company or other Employees
against an Employee who, in good faith, seeks help or reports known or
suspected violations is strictly prohibited. However, malicious or vexatious
reports or false allegations may result in disciplinary action. To eliminate
fear of retaliation as a result of lawful and bona fide reporting of violations,
the Company formulates and adopts the Rules Against Retaliation upon Reporting,
which all Employees shall read carefully.
- Punishment for Violations of the Code and Related Policies
Any Employee who violates the Code and related policies will be subject to
disciplinary action up to and including termination of employment. For details,
please refer to Rules for Awarding and Punishing Employees. Conduct that violates
the Code cannot be justified by claiming that it was ordered by a supervisor
or someone in higher management. The Employee, on behalf of himself/herself
as an individual, is also legally liable for his/her conduct if such conduct
violates applicable laws and regulations.
- Amendments and Waivers
The Company's Human Resources (or "HR") Department may review this Code
quarterly and propose amendments (if any) to the Board of Directors for
Amendments to the Code and related policies shall be distributed to all
Employees in writing via e-mail or hard copy for acknowledgement. The
Code shall be posted on the Company's intranet website. In addition, the
HR department shall conduct appropriate trainings as necessary and distribute
updated versions of the Code to all Employees for execution of a written
acknowledgement in the form attached as Appendix I hereto.
Waivers of this Code will be granted on a case-by-case basis and only
in extraordinary circumstances. Waivers of this Code may be made only
by the Board, or the appropriate committee of the Board.
- Inquiry about the Code
The Code is intended to clarify principles and standards concerning business
conduct and serves as guidance for Employees. It is not intended to encompass
every event that may arise from time to time. If an Employee encounters any
events that are not covered by this Code or has any questions on any matters
included in this Code, the Employees are encouraged to consult with the Company's
HR, legal and internal audit departments.
- Employees shall also comply with other internal rules in force and effect,
from time to time, including, but not limited to, Rules for Avoiding Conflicts
of Interest, Rules for Use and Disclosure of Information, Rules Prohibiting
Side Agreements, Whistleblower Rules and Procedures and Rules Against Retaliation
- Effective Date: July 1, 2005
Prepared and Revised by: Human Resources, Legal and Internal Audit Departments
Approved by: The Board of Directors on July 1, 2005
As a Nasdaq-listed company, Baidu, Inc. ("Baidu") has
adopted a series of corporate governance policies and ethics rules, including
the Code of Business Conduct and Ethics posted on Baidu's website. In order
to further implement and monitor compliance with such policies and rules, Baidu
sets up this Ethics Hotline to receive complaints about any Baidu employee's
possible violation of these policies and rules. If you make a complaint through
this Ethics Hotline, we encourage you to leave your name and contact information
with us to aid our investigation. We will contact you within 15 working days
upon receipt of your complaint if we have your contact information. We intend
to conduct a thorough investigation fair to the concerned parties while preserving
the information relating to yourself in confidence to the maximum extent permissible
under applicable law.
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