A company code of conduct is a document written up voluntarily by a company in which it sets out a set of principles that it commits itself to follow, or requires its employees to follow. In some cases, codes of conduct reach suppliers, subcontractors, and third parties. It is a type of

code of conduct A code of conduct is a set of rules outlining the norms, rules, and responsibilities or proper practices of an individual party or an organization. Companies' codes of conduct A company code of conduct is a set of rules which is commonly writt ...

The content of a company code of conduct varies and depends in a measure of the company's culture and on the country in which they reside. In general terms, it can be said that the codes of conduct are related to anti-corruption issues,

labor law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, ...

environmental A biophysical environment is a biotic and abiotic surrounding of an organism or population, and consequently includes the factors that have an influence in their survival, development, and evolution. A biophysical environment can vary in scale f ...

and basic legal issues, such as the rejection of

slavery Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...

child labor Child labour refers to the exploitation of children through any form of work that deprives children of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially and morally harmful. Such e ...

, compliance with the environmental standards of each country, and in general respect for national laws.

Cases

Nike

Nike's company code of conduct is one of the best known. In the early 1990s, Nike was reported by the press in the United States for using contractors in

Southeast Asia Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical south-eastern region of Asia, consisting of the regions that are situated south of mainlan ...

who employed

slave labor Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...

and

. This complaint damaged Nike's image and was reflected in a significant drop in sales. As part of a strategy to recover their image, Nike announced in 1992 a company code of conduct in which it stated its commitment to adjust the company's actions around the world to adhere to its rules, as well as to require all subcontractors to do the same. (Nike directly employs 22,000 employees and indirectly 450,000 workers through subcontractors around the world.) Shortly afterward, a series of criticisms was received from the unions about the content of its code of conduct, and so Nike created a new text which is the one that is currently presented.

Faithless servant

In '' Morgan Stanley v. Skowron'', 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's

faithless servant The faithless servant doctrine is a doctrine under the laws of a number of states in the United States, and most notably New York State law, pursuant to which employees who act unfaithfully towards their employers must forfeit to their employers a ...

doctrine, the court held that a hedge fund's employee engaging in insider trading in violation of his company's code of conduct, which also required him to report his misconduct, must repay his employer the full $31 million his employer paid him as compensation during his period of faithlessness.

Monitoring

One of the first issues that was raised by the company code of conduct was monitoring compliance. It has been considered that it is not reliable that the monitoring is conducted by the company itself. Some companies reach out to external companies to conduct monitoring. In other cases companies have accepted that certain

NGOs A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...

proceed with monitoring, but unions have complained that this activity of NGOs has been used repeatedly as an alternative to trade union action and to replace the union in front of the workers.

Issues

Codes of conduct are related to corporate social responsibility. A couple of investigations have pointed out that codes of conduct carry the risk of displacing the importance of mandatory national and international standards. The

United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmoniz ...

Research Institute for Social Development (UNRISD) estimated a few hundred existing company code of conduct. The

UNCTAD The United Nations Conference on Trade and Development (UNCTAD) is an intergovernmental organization within the United Nations Secretariat that promotes the interests of developing countries in world trade. It was established in 1964 by the ...

estimated 65,000 parent companies which own about 850,000 subsidiary are foreigners in all countries around the world, and employ the majority of their workers through outsourcing.

Trade unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...

and some NGOs have criticized the unilateral nature of codes of conduct and have emphasized that they are often only aimed to improve the public image of businesses. The non-inclusion of suppliers, subcontractors and outsourced companies in codes of conduct has also been pointed out by trade unions and NGOs as a serious disadvantage, as it is precisely where the majority of workers work and where they produce the majority of violations. The legal validity of the same and the ways to enforce compliance is also being discussed.

References

External links

Codes of Business Conduct, OIE
{Dead link, date=July 2019 , bot=InternetArchiveBot , fix-attempted=yes * For general information about the legal value of the codes of conduct, see the website developed by the University Project R & D SEJ 2006-07116, based in the Faculty of Law of the

Complutense University of Madrid The Complutense University of Madrid ( es, Universidad Complutense de Madrid; UCM, links=no, ''Universidad de Madrid'', ''Universidad Central de Madrid''; la, Universitas Complutensis Matritensis, links=no) is a public research university loc ...

and financed by the Ministry Of Science and Innovation Spanish
Web Portal Codes of Conduct

Business Labour law Environmental law

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