Management and Corporate Governance

 


Board Committees

Audit Committee

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Compensation Committee

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Governance and Nominating Committee

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Policies

The employees of Bsquare use these Guidelines to conduct our business with the highest ethical standards and in compliance with all legal and regulatory requirements.


 

Code of Conduct and Ethics

March 2015

Introduction

This Code of Business Conduct and Ethics (this “Code”) covers a wide range of business practices and procedures and is applicable to all of our directors, officers and employees. It does not cover every issue that may arise, but it sets out basic principles to guide all employees of the Company. All of our directors, officers and employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. If a law conflicts with a policy in this Code, you must comply with the law. If you have any questions about any such conflicts, you should ask your supervisor how to handle the situation.

 The Company has adopted this Code in order to:

(a) promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

(b) promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company;

(c) promote compliance with applicable governmental laws, rules and regulations;

(d) promote the protection of Company assets, including corporate opportunities and confidential information;

(e) promote fair dealing practices;

(f) deter wrongdoing; and

(g) ensure accountability for adherence to the Code.

Those who violate the standards in this Code will be subject to disciplinary action, up to and including termination of employment. If you are in a situation which you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 16 of this Code.

1. Honest and Ethical Conduct

The Company’s policy is to promote high standards of integrity by conducting its affairs honestly and ethically. Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job.

2. Compliance with Laws, Rules and Regulations

Obeying the law, both in letter and in spirit, is the foundation on which this Company’s ethical standards are built. All employees must respect and obey the laws of the cities, states and countries in which we operate. Although not all employees are expected to know the details of all of these laws, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.

3. Conflicts of Interest

A “conflict of interest” exists when an individual’s personal interests (or the interests of a family member) interfere in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director (or a member of his or her family) takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest. Loans by the Company to, or guarantees by the Company of obligations of, any director or officer or their family members are expressly prohibited. Conflicts of interest may also arise when an employee, officer or director initiate dealings with an outside company, and that employee, officer or director has control, either directly or indirectly, with that outside company.

It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier of the Company. You should strive to avoid any direct or indirect personal business connection with our customers, suppliers or competitors, except on our behalf.

Conflicts of interest are prohibited as a matter of Company policy, except under specific guidelines approved by the Board of Directors on a case-by-case basis. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with your supervisor or manager or the Company’s legal department. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel or consult the procedures described in Section 16 of this Code.

4. Insider Trading

Employees who have access to material, non-public information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal. In order to assist with compliance with laws against insider trading, the Company has adopted a specific policy governing employees’ trading in securities of the Company. This policy has been made available to every employee. If you have any questions, please consult the Company’s legal department.

5. Corporate Opportunities

Employees, officers and directors are prohibited from taking for themselves personally (or for the benefit of friends or family members) opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee may use corporate property, information or position for improper personal gain (including the personal gain of friends or family members), and no employee may compete with the Company directly or indirectly. Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

6. Competition and Fair Dealing

We seek to outperform our competition fairly and honestly. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each employee should endeavor to respect the rights of and deal fairly with the Company’s customers, suppliers, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) is not and cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts which you are not certain are appropriate.

7. Discrimination and Harassment

The diversity of the Company’s employees is a tremendous asset. We are firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. Examples of impermissible discrimination or harassment include, but are not limited to, derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.

8. Health and Safety

The Company strives to provide each employee with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions. Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs or alcohol in the workplace will not be tolerated.

9. Record-Keeping

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For example, only the true and actual number of hours worked should be reported.

Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor.

All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation and disclosed to your supervisor.

Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos and formal reports. Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation please consult the Company’s legal department.

10. Disclosure

The Company’s periodic reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and SEC rules. Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel. Each director, officer and employee who is involved in the Company’s disclosure process must:

  1. Be familiar with and comply with the Company’s disclosure controls, procedures and its internal control over financial reporting; and
  2. Take all necessary steps to ensure that all filings with the seC and all other public communications about the financial and business condition of the Company provide full, fair, accurate, timely and understandable disclosure.

11. Confidentiality

Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, suppliers or partners, except when disclosure is authorized by the Company’s legal department or required by applicable laws or regulations. Confidential information includes all non-public information (regardless of its source) that might be of use to competitors, or harmful to the Company or its customers, suppliers or partners, if disclosed. The obligation to preserve confidential information continues even after employment ends. In connection with this obligation, every employee should have executed a confidentiality agreement when he or she began his or her employment with the Company.

12. Protection and Proper Use of Company Assets

All employees should endeavor to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business, though incidental personal use may be permitted.

The obligation of employees to protect the Company’s assets includes the Company’s proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.

13. Payments to Government Personnel

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.

In addition, the U.S. government has a number of laws and regulations regarding business gratuities which may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules. The Company’s legal department can provide guidance to you in this area.

14. Waivers of the Code of Business Conduct and Ethics

Any waiver of this Code may be made only by the Board of Directors of the Company and will be promptly publicly disclosed as required by applicable law or regulation.

15. Reporting any Illegal or Unethical Behavior

Employees are encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and when in doubt about the best course of action in a particular situation. Actions prohibited by this Code involving directors or executive officers must be reported to the Audit Committee. It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct. As applicable, employees shall be protected from retaliation by the whistle blower protections specified in Section 806 of the Sarbanes-Oxley Act of 2003 and in Sections 922 and 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Employees must read the Company’s Employee Complaint Procedures for Accounting and Auditing Matters, which describes the Company’s procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters. Any employee may submit a good faith concern regarding questionable accounting or auditing matters without fear of dismissal or retaliation of any kind.

16. Compliance Procedures

We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know if a violation has occurred. Since we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem. These are some steps to keep in mind:

  • Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
  • Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
  • Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
  • Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question and will appreciate being brought into the decision-making process. Remember that it is your supervisor’s responsibility to help solve problems.
  • Seek help from Company resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor or where you do not feel comfortable approaching your supervisor with your question, discuss it with your Human Resources manager.
  • You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind against employees for good faith reports of ethical violations.
  • Always ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.

17. Code of Ethics for Chief Executive Officer and Senior Financial Officers

In addition to the foregoing, and without in any way limiting the preceding duties and obligations, the chief executive officer and senior financial and accounting officers of the Company are also subject to the following additional specific policies:

  • The chief executive officer and all senior financial and accounting officers are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports and documents required to be filed by the Company with the SEC and in other public communications made by the Company. Accordingly, it is the responsibility of the chief executive officer and each senior financial and accounting officer promptly to bring to the attention of the Company’s Disclosure Committee any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise assist the Disclosure Committee in fulfilling its responsibilities.
  • The chief executive officer and each senior financial and accounting officer shall promptly bring to the attention of the Disclosure Committee and the Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.
  • The chief executive officer and each senior financial and accounting officer shall promptly bring to the attention of the legal department or the chief executive officer and to the Audit Committee any information he or she may have concerning any violation of this Code, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.
  • The chief executive officer and each senior financial and accounting officer shall promptly bring to the attention of the legal department or the chief executive officer and to the Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business by the Company or any agent thereof, or of violation of this Code.
  • The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of this Code by the chief executive officer and the Company’s senior financial and accounting officers (including, without limitation, notifying appropriate governmental authorities). Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code and shall include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or re-assignment of the individual involved, suspension with or without pay or benefits (as determined by the Board) or termination of the individual’s employment. In determining what action is appropriate in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violations in the past.

 


Whistleblower Policy

Employee Complaint Procedures for Accounting and Auditing Matters

June 2016

Any employee of the Company may submit a good faith complaint regarding accounting, internal accounting controls or auditing matters to the management of the Company without fear of dismissal or retaliation of any kind.  The Company is committed to maintaining compliance with all applicable securities laws and regulations, accounting standards, accounting controls and audit practices.  The Company’s Audit Committee will oversee treatment of employee concerns in this area.  In order to facilitate the reporting of employee complaints, the Company’s Audit Committee has established the following procedures for (1) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“Accounting Matters”) and (2) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Receipt of Employee Complaints

Employees with concerns regarding Accounting Matters may report their concerns utilizing our external reporting solution called Convercent™.

Convercent offers two options for you to anonymously report issues. The anonymous reporting services are available 24-hours a day, seven days a week.

  • Independently report issues via the Internet at the following link: Bsquare Whistleblower and Ethics Portal [1].  Options are available to display the report form in your preferred language.
  • For those in the United States, call toll free 1-800-461-9330 to report the issue with the help of a Convercent call center representative.
  • For those outside the United States, place a collect call to +1-720-514-4400 to report the issue with the help of a Convercent call center representative and language interpreter. The call center supports more than 300+ languages. Additional international dialing instructions can be displayed in your preferred language at the link above.

Employees may also forward complaints on a confidential or anonymous basis to the legal department through regular mail:

Legal Department
BSQUARE Corporation
110 110th Ave NE, Suite 300
Bellevue, WA  98004

Employees can choose to remain anonymous, or include contact information in complaint letters sent to the legal department.

Scope of Matters Covered by These Procedures

These procedures relate to employee complaints relating to any questionable accounting or auditing matters, including, without limitation, the following:

  • fraud or deliberate error in the preparation, evaluation, review or audit of any financial statements of the Company;
  • fraud or deliberate error in the recording or maintaining of financial records of the Company;
  • deficiencies in or non-compliance with the Company’s internal accounting controls;
  • misrepresentation or false statement to or by a senior officer or accountant regarding a matter contained in the financial records or financial reports of the Company; or
  • deviation from full and fair reporting of the Company’s financial condition.

Treatment of Complaints

  • Upon receipt of a complaint, the legal department will (i) determine whether the complaint actually pertains to Accounting Matters and (ii) when possible, acknowledge receipt of the complaint to the sender.
  • Complaints relating to Accounting Matters will be reviewed under Audit Committee direction and oversight by the legal department or such other persons as the Audit Committee determines to be appropriate. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review.
  • Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit Committee.
  • The Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any employee in the terms and conditions of employment based upon any lawful actions of such employee with respect to good faith reporting of complaints regarding Accounting Matters or otherwise as specified in Section 806 of the Sarbanes-Oxley Act of 2003.

Reporting and Retention of Complaints and Investigations

The legal department will maintain a log of all complaints, tracking their receipt, investigation and resolution and shall prepare a periodic summary report thereof for the Audit Committee.  Copies of complaints and such log will be maintained in accordance with the Company’s document retention policy.

[1] https://app.convercent.com/en-us/LandingPage/82083942-88f7-e511-80c8-000d3ab06827