CODE OF BUSINESS CONDUCT AND ETHICS
This Code of Business Conduct and Ethics (the “Code”) applies to all directors, officers and employees of CRH Medical Corporation (the “Company”), as well as to directors, officers and employees of each of the Company’s subsidiaries. The Company and its subsidiaries are referred to herein collectively as “CRH”. Other individuals representing CRH (such as consultants or contractors) are also expected to abide by all applicable provisions of the Code and adhere to the principles and values set out in the Code when representing CRH to the public or performing services for, or on behalf of, CRH. In this Code, “you” means all CRH employees, directors, officers and, where applicable, other representatives of CRH (collectively, Company Personnel”) and “our” refers to CRH.
This Code will be available to any interested parties, including our shareholders. The board of directors of CRH (the “Board”) will review the effectiveness of this Code on an ongoing basis to ensure that CRH’s business activities are conducted in accordance with this Code and that CRH’s reputation for high ethical standards is maintained. The Board has approved, and is ultimately responsible for the implementation of, this Code of Conduct. The Company’s Governance and Nominating Committee of the Board also periodically reviews this Code of Conduct.
While this Code of Conduct is designed to provide helpful general principles, it is not intended to address every specific situation. Nevertheless, in every instance, we require that Company Personnel act honestly, fairly, and with a view towards “doing the right thing.”
CRH is proud of the values with which it conducts business. It has and will continue to uphold the highest levels of business ethics and personal integrity in all types of transactions and interactions. To this end, this Code serves to: (1) emphasize CRH’s commitment to ethics and compliance with the law; (2) set forth basic standards of ethical and legal behavior; (3) provide reporting mechanisms for known or suspected ethical or legal violations; and (4) help prevent and detect wrongdoing.
In order to ensure that this Code is working effectively, questions or concerns about this Code are encouraged and will be treated seriously and respectfully. This Code provides fundamental guidance with respect to expected standards for ethical conduct, but cannot describe all situations that you might face. Accordingly, an important feature of this Code is the procedures for seeking further guidance if you have questions, and for communicating concerns that you might have regarding compliance with this Code, that everyone is encouraged to use. In any ambiguous situation, you should seek advice from your supervisor, manager or other appropriate personnel to ensure that all actions taken on behalf of CRH honor this commitment.
It is the policy of the Company to: (i) comply with all applicable governmental laws, rules, and regulations; (ii) expect that all Company Personnel at all times observe honest and ethical conduct in the performance of the Company’s related responsibilities, including the avoidance of conflicts of interest; (iii) expect all Company Personnel to treat others with dignity, including other Company Personnel, stockholders, customers, and vendors; and (iv) encourage and support internal disclosure of any violation of this policy for appropriate action.
C. Compliance Procedures
All Company Personnel must work together to ensure prompt and consistent action against violations of this Code. In some situations, however, it is difficult to know if a violation has occurred. Because every situation that will arise cannot be anticipated, it is important that there is a way to approach a new question or problem. These are the steps to keep in mind:
D. Ethical Standards
Compliance with Laws
All Company Personnel are expected to comply with all applicable laws and with any rules and regulations adopted under such laws. Examples of violations under these laws include:
These laws can be complex and difficult to interpret and can have both criminal and civil consequences, including monetary penalties and imprisonment, for both individual employees and the Company. As a result, it is imperative that you be vigilant in observing these laws and contact your supervisor or manager with any questions.
The Company must, and will, investigate, address, and report, as appropriate, all violations, including suspected criminal violations.
Ethical Interactions with Healthcare Professionals and Healthcare Organizations
CRH is committed to the appropriate use of its products and services and recognizes the importance of providing Healthcare Professionals (“HCPs”) and Healthcare Organizations (“HCOs”) with the critical information needed to make fully informed clinical decisions. Because the Company provides information through various channels, it is critical that interactions and communications fully conform and meet the highest professional, marketing, and promotional standards. The marketing and/or promotion of products or services for an unapproved use is both illegal and unethical and is prohibited by the Company.
All interactions and communications undertaken on behalf of the Company with HCPs and HCOs that involve informing HCPs and HCOs about the Company’s products and/or services, providing scientific and educational information, and/or supporting medical education must be conducted in a manner that is fair and balanced, scientifically rigorous, and compliant with applicable laws and regulations, professional standards set forth in applicable industry codes of conduct, and applicable Company policies.
For the purposes of this Code, a HCP is any person or entity that interacts directly with patients and has a role in the diagnosis or treatment of the patient, and/or is licensed to prescribe drugs for medical use, or is in a position to arrange for, or recommend, the purchase or prescription or formulary/product placement of any Company product. Hospitals, clinics, medical practices, universities, pharmacies, professional organizations medical societies, payors, distributors/wholesalers and specialty pharmacies are referred to in this Code as HCOs.
All individuals who are employed by or act on behalf of CRH and who visit or otherwise interact with HCPs and HCOs must complete training about applicable Company policies and procedures, Federal and state laws and regulations, and industry codes of practice that govern their interactions with HCPs.
Honest and Responsible Conduct
Working for a company that provides products and services to improve human health is an extraordinary privilege. It also comes with enormous responsibility. To achieve success, each of you must wholeheartedly embrace the obligations demanded by working in the medical products and services industry. You must also maintain strict compliance with the spirit and intent of applicable laws and regulations.
CRH expects its employees to maintain the highest of personal and professional ethics. This standard of ethics includes values such as honesty, integrity, open communication and trust in all endeavors. As a member of CRH, individual credibility is essential. The manner in which you achieve success is often more important than the success itself.
Conflicts of Interest
You should avoid conflicts of interest and appearances of conflicts of interest. A conflict of interest exists if your private interest interferes in any way with the interests of CRH. A conflict can arise when you take action or have interests that may make it difficult to perform your work for CRH objectively and effectively. Conflicts of interest may also arise when you, or members of your family, receive improper personal benefits as a result of your position at CRH. Loans to, or guarantees of obligations of, you and your family members may create conflicts of interest. It is almost always a conflict of interest for you to work simultaneously for a competitor or supplier of CRH. You should be sensitive to any activities, interests or relationships that might interfere with, or even appear to interfere with, your ability to act in the best interests of CRH.
Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with your supervisor, manager or other appropriate personnel. If you become aware of a conflict or potential conflict, you should bring it to the attention of your supervisor, manager or other appropriate personnel or consult the procedures described in Section F of this Code.
All directors and executive officers of CRH must disclose any material transaction or relationship that reasonably could be expected to give rise to such a conflict to the Chair of the Audit Committee of CRH (the “Audit Committee”). No action may be taken with respect to such transaction or party unless and until such action has been approved by the Audit Committee.
You must notify your supervisor, manager or other appropriate personnel of any business relationship or proposed business relationship that CRH may have with any company in which you or a related party has a direct or indirect interest or from which you or a related party may derive some benefit, or where a related party member is employed, if such relationship or transaction might give rise to the appearance of a conflict of interest. This requirement generally does not apply if the interest consists solely as a result of your beneficial ownership of less than 1% of the outstanding publicly traded equity securities of such company.
Because of potential conflicts with CRH or even the potential perception of a conflict of interest, CRH requires that you obtain approval of the Chief Financial Officer or, in the case of CRH’s directors, approval from the chairman of CRH’s board of directors, before you accept a position as a director of an unaffiliated for-profit company or organization. In connection with acceptance of an appointment as director of an unaffiliated for-profit company or organization you must ensure the proper treatment of confidential information received from such entity in connection with being a director. Before accepting such an appointment, you are required to obtain approvals and execute certain documents specified by CRH on approving such directorships. In addition you should not accept or hold a position as a director, employee, or agent of, or consultant or advisor to, any competitor of CRH unless you obtain CRH’s approval.
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 third parties. No gift or entertainment should ever be offered or accepted by you or any family member of yours unless it: (1) is consistent with this Code, applicable policies and procedures and customary business practices; (2) is not excessive in value; (3) cannot be seen by others as a bribe or payoff; and (4) does not violate any laws or regulations. The offer or acceptance of cash gifts by you is prohibited. You should discuss with your supervisor, manager or other appropriate personnel any gifts or proposed gifts which you think may be inappropriate.
CRH has a zero tolerance policy with respect to bribery and corruption; the Company will not tolerate bribery of any person, in any form, at any time, for any reason. A kickback or bribe may be defined as any money, fee, commission, credit, gift, gratuity, thing of value or compensation of any kind that is provided, directly or indirectly, and that has as one of its purposes, the improper obtaining or rewarding of favorable treatment in a business transaction. In the U.S., and in many other countries, it is illegal to provide, offer or accept a kickback or bribe.
Gifts of nominal value (or gifts in such form and substance where accepting the gift will not influence your judgment of the giver), customary and reasonable meals and entertainment at which the giver is present, such as an occasional business meal and sporting event are generally acceptable, if permitted by applicable law. If you have a question about the appropriateness of accepting a gift or invitation, consult with Human Resources for guidance.
You will not make any payment, or provide a gift or favor, to any person in a position of trust, such as a government or corporate official, to induce him or her to violate his or her duty or to obtain favorable treatment in the negotiations or the award of contracts or otherwise.
You owe a duty to CRH to advance its legitimate interests when the opportunity to do so arises. You are prohibited from taking for yourself opportunities that are discovered through the use of corporate property, information or position without the consent of CRH executive management and, in some cases, the Board. You may not use corporate property, information or position for improper personal gain, and you will not compete with CRH directly or indirectly.
CRH is committed to promoting equal opportunity in all dealings with employees, clients, suppliers and others. CRH will conduct its business in a manner that will make it a desirable employer. In doing so, CRH will:
Keeping these principles in mind, you are required to behave honestly and ethically at all times and with all people. You are required to act in good faith, with due care, and to engage only in fair and open competition, by treating competitors, suppliers, customers, colleagues and shareholders in an ethical manner. 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. You will not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair practice.
You will not make any payment, directly or indirectly, to a person who has a decision-making role in a contemplated transaction with CRH in an attempt to influence such decision. You will not use illegal means to obtain information on any business matters generally, and more particularly, on those being the object of research, studies or analysis by CRH. Fees that are paid to agents and consultants are to be reasonable and in accordance with sound business practice.
You will not knowingly aid or abet any party to circumvent any laws, evade income taxes or defraud minority interests or creditors. Accordingly, no payment due to a customer, agent or distributor to a third party or to another entity nominated by the customer, agent or distributor, will be made if, after reasonable inquiry, it is possible that such purpose is intended. No payments are to be made to an unidentified bank account.
All contractual agreements of CRH will only be entered into by officers of CRH in accordance with the authority given to such officers by the Board. All agreements for the procurement of goods and services by CRH will be made in accordance with CRH’s procurement policy, as applicable.
Each CRH director, officer and employee is responsible for making sure that his or her actions on behalf of the Company do not in any way violate or appear to violate antitrust laws or regulations. When in doubt, seek assistance from their direct supervisor.
You will review and comply with CRH’s Insider Trading Policy. Those of us who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of CRH’s business. All non-public information about CRH should be considered confidential information. It is illegal to trade in securities of CRH while in possession of material, non-public information (unless such trades are affected pursuant to a pre existing automatic securities disposition or purchase plan established in accordance with CRH’s Insider Trading Policy). The definition of “material, non-public information” is broad. Information is “material” (and potentially subject to the prohibition of insider trading) if there is a substantial likelihood that a reasonable investor would consider the information important in determining how to vote or whether to trade in a security, or if the information, if made public, likely would affect the market price of CRH’s securities. Information may be material even if it relates to future, speculative or contingent events, and even if it is significant only when considered in combination with publicly available information. Information is considered to be “non-public” unless it has been publicly disclosed, and adequate time has passed for the securities markets to digest the information. It is also illegal to “tip” or pass on inside information to any other person except in the necessary course of business.
You must maintain the confidentiality of confidential information entrusted to you, except when disclosure is authorized by an appropriate officer of CRH or required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors or harmful to CRH or its customers if disclosed. It also includes information that suppliers and customers have entrusted to CRH. The obligation to preserve confidential information continues even after employment ends.
If you believe it is necessary to disclose confidential information to a third party in order for the third party to provide a valuable service to CRH, you will first seek the guidance of the Chief Financial Officer prior to disclosure of any confidential information.
Company Personnel must observe the confidentiality of information, including in accordance with laws that protect patient health information that they acquire by virtue of their employment by or affiliation with the Company, including information concerning customers, distributors, patients, clinical trial participants, vendors, competitors, and other Company Personnel, except where disclosure is approved by the Company or otherwise legally mandated. Of special sensitivity is financial information, which should under all circumstances be considered confidential except where its disclosure is approved by the Company, or after two full business days following its disclosure in a press release or a report filed with the SEC.
Company Personnel must safeguard proprietary information, which includes information that is not generally known to the public and has commercial value in the Company’s business. Proprietary information includes, among other things, software programs, source and object codes, trade secrets, ideas, techniques, inventions (whether patentable or not) and other information relating to scientific research, product designs, algorithms, research and development, and clinical trial results. It also includes information relating to marketing, pricing, customers, and terms of compensation for Company Personnel, communications to, from and with the FDA and other governmental regulatory bodies and proprietary information of the Company’s vendors, strategic partners, and other collaborators. This obligation is intended to supplement and not supersede any contractual obligation between the Company and any Company Personnel.
Protection and Proper Use of CRH Assets
The Company’s assets, including facilities, materials, supplies, time, information, intellectual property, software, and other assets owned or leased by the Company, or that are otherwise in the Company’s possession, may be used only for legitimate business purposes. The personal use of the Company’s assets without the Company’s approval is prohibited.
CRH computers, communications devices/equipment, and networks may only be used in accordance with Company policy and may never be used to access, receive, or transmit material that is illegal or inappropriate. If sending proprietary or confidential information to persons outside of the Company’s email system or if receiving information from persons who are transmitting such information via a non-company email or data transfer system, the Company’s IT safety protocols and precautions must be observed.
All Company-provided computers and communications devices/equipment, including but not limited to, laptops, computer tablets (e.g., i-Pads) and mobile telephones, should be password protected and properly secured. No software that is not properly licensed or lawfully acquired may be introduced into a Company computer or communications device
While Company equipment is intended to be used only for Company business, it is recognized that CRH personnel may occasionally use CRH computers, mobile devices and email for incidental personal matters. Where this occurs, the Company does not guarantee the privacy of these communications. Any records and/or data contained on Company equipment shall be deemed to be Company property. Such information, like any of the Company’s business records (including email and computer records) may become subject to internal review and/or public disclosure in the course of internal investigations, internal audits, litigation or governmental investigations.
Our Standards for the Workplace
CRH values diversity and is firmly committed to providing equal opportunity and a positive working environment in all aspects of employment. Any kind of discrimination or harassment of an employee, whether by another employee, supplier, vendor, or customer, is strictly prohibited and will not be tolerated. In addition to the information contained herein, the Company maintains policies setting forth its expectations for non-discrimination and a harassment-free work environment, which also includes important information on reporting requirements.
Discrimination is prohibited based on race, color, religion, national origin, sexual orientation, sex, age, disability or any other legally prohibited basis. This applies to all employment practices, including recruiting, hiring, pay, performance reviews, training and development, promotions, and other terms and conditions of employment.
CRH does not permit any form of harassment. This includes any form of abusive conduct, such as verbal, non-verbal, or physical conduct, that creates an intimidating, hostile, or offensive work environment; unreasonably interferes with an individuals’ work performance; adversely affects an individual’s employment opportunities; or that demeans or shows hostility toward an individual because of his or her race, color, religion, national origin, sexual orientation, sex, age, disability, or any other legally prohibited basis.
Fellow employees, colleagues, customers, vendors, competitors, health professionals, patients, and government officials are to be treated with respect. Disruptive, abusive, or otherwise inappropriate behavior at work or while representing CRH will not be tolerated.
Special Guidelines for Employees with Financial Reporting Responsibilities
The Company requires that all employees who participate in the preparation of any part of the Company’s financial statements, regulatory financial disclosures and/or other public communications act in accordance with CRH’s Disclosure Policy and adhere to the following guidelines:
E. Reporting Possible Violations and Investigation Procedures
It is the responsibility of all directors, officers and employees to comply with this Code of Conduct and to report violations or suspected violations.
Submitting a Complaint
In the event a director, officer or employee of the Company becomes aware of a concern regarding:
The director, officer or employee is encouraged to raise those concerns by submitting them in the form of a complaint to your immediate supervisor or Human Resources. An individual may also submit such complaints on a confidential, anonymous basis directly to the Company’s Audit Committee via contacting the Company’s Whistleblower Hotline (described below). A failure to report a known or suspected violation of this Code is a Code violation in itself.
To facilitate the investigation of a complaint, the complaint should include contact information for the complainant. The Audit Committee and the Company will use its best efforts to maintain the confidentiality of the complainant, subject to compliance with law and regulation and the best interests of the Company, but cannot guarantee it. A director, officer or employee submitting a complaint on a confidential, anonymous basis is not required to include contact information, but should be aware that the nature of the concerns may lead to the identification of that person as the source of the complaint.
As noted above, the Company has established a “Whistleblower Hotline” through an independent third-party hotline provider, Lighthouse Services, LLC.. Trained professional representatives will provide confidential reporting to enable corporate management staff, employees, and customers to report fraud, abuse, ethics, compliance and Human Resource violations. Lighthouse Services is available every day, 24 hours a day. The phone number for this hotline is 1-855-909-8111. Complaints also can be submitted to the hotline via email and fax at reports@Lighthouse-services.com or 215-689-3885. Please note that anonymous emails and faxes must include the company name with the complaint.
The position of Chief Compliance Officer was established to assist employees in their desire to do the right thing, help us better understand the complexities of today’s healthcare regulatory environment and monitor the systems in place to protect and act proactively to assist with any possible problems.
Contact information for our COO is as follows:
Reported violations will be investigated and addressed promptly under the supervision of the Audit Committee. The Audit Committee may enlist employees of the Company and/or outside legal, accounting or other advisors, as appropriate, to conduct any investigation of complaints submitted.
All employees are required to cooperate fully in the investigation of reported violations and to provide truthful, complete and accurate information. The investigation will be handled as discreetly as reasonably possible, allowing for a fair investigation and any necessary corrective action. Appropriate corrective action will be taken whenever a violation of this Code of Conduct is determined to have occurred. Depending on the nature of the violation, the offending individual can be subject to corrective action, such as training, or disciplinary action, which may include termination.
In addition, anyone who interferes with an investigation, or provides information in an investigation that the individual knows to be untrue or inaccurate, will be subject to disciplinary action, which may include termination of employment.
Protection against Retaliation
The Company prohibits any form of retaliation against employees who, for lawful purposes and in good faith, report to the Company any conduct or activity that may violate this Code of Conduct, any law or regulation applicable to the Company or any other suspected improper, unethical or illegal conduct or activities by anyone at the Company.
The Company also prohibits any form of retaliation against directors, officers, employees and others who provide information, cause information to be provided, or assist in an investigation conducted by the Company or any governmental body regarding a possible violation of any law or regulation relating to fraud, any labor law, or any rule or regulation of the SEC or Canadian securities administrators, or who file, cause to be filed, or assist, participate or give testimony in any proceeding relating to an alleged violation of any such law, rule or regulation.
All CRH employees are covered by the Federal False Claims Act and other federal and state whistleblower protections as well as those in Canada. The Federal False Claims Act was enacted in an effort to reduce fraud, waste, and abuse of federal funds. It allows private parties to bring suit on behalf of the government against people or businesses alleged to have committed fraud. The act also contains language protecting whistleblower employees from retaliation by employers.
CRH will not discharge, demote, suspend, threaten, harass, or in any other manner discriminate against employees who exercise their rights under the Federal False Claims Act or other applicable whistleblower laws. Employees who are discharged, demoted, suspended, threatened, harassed, or in any manner discriminated against in retaliation for exercising their rights under the Federal False Claims Act or other applicable whistleblower laws are entitled to the relief necessary to make them whole.
Requests for a waiver of a provision of this Code of Conduct must be submitted in writing to Human Resources for appropriate review, and an executive officer, director, appropriate Board committee or the Board, as appropriate, will decide the outcome. For conduct involving an executive officer or director, only the Board has the authority to waive a provision of this Code of Conduct. In addition, the Audit Committee must review and approve any “related party” transaction as defined in Item 404(a) of Regulation S-K, promulgated by the SEC, before it is consummated. In the event of an approved waiver involving the conduct of an executive officer or director, appropriate and prompt disclosure must be made as required by the SEC, Canadian securities laws or other regulation or by applicable listing standards of the principal exchange or interdealer quotation system on which the Company’s common stock is listed.
Adherence to Code of Conduct; Disciplinary Action
All Company Personnel have a responsibility to understand and follow this Code of Conduct. In addition, all Company Personnel are expected to perform their work with honesty and integrity in all areas not specifically addressed in this Code of Conduct. A violation of this Code of Conduct may result in appropriate disciplinary action, including the possible termination from employment with the Company.
Communications; Annual Certification
The Company strongly encourages dialogue among Company Personnel and their supervisors to make everyone aware of situations that give rise to ethical questions and to articulate acceptable ways of handling those situations. All Company Personnel are provided with a copy of this Code of Conduct upon employment with the Company. Each officer and each other managerial employee of the Company has an obligation to annually certify that he or she has read and reviewed this Code of Conduct with his or her subordinates, and all Company Personnel must certify that they read this Code of Conduct and annually certify that, to the best of their knowledge, they are in compliance with all its provisions.
Responsibility of Officers and Managerial Employees
All Company officers and other managerial employees will be responsible for the enforcement of, and compliance with, this Code of Conduct, including necessary distribution to assure employee knowledge and compliance. Directors, officers, and other managerial employees are expected to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Managerial employees may be disciplined if they condone misconduct, do not report misconduct, do not take reasonable measures to detect misconduct, or do not demonstrate the appropriate leadership to ensure compliance.
Approved by the Board: December 2, 2020