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.
Contents
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,
environmental and basic legal issues, such as the rejection of
slavery,
child labor, 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 who employed
slave labor and
child labor. 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 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
Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...
. 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 Research Institute for Social Development (UNRISD) estimated a few hundred existing company code of conduct. The
UNCTAD estimated 65,000 parent companies which own about 850,000
subsidiary
A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
are foreigners in all countries around the world, and employ the majority of their workers through
outsourcing
Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and ...
.
Trade unions 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.
See also
*
Banking Code The Banking Code was a voluntary code of practice agreed by banks in certain countries. The code typically described how banks dealt with accepting deposits and withdrawals and with customer disputes on transactions. Banking codes have in most cou ...
[Bank codes of conduct https://theconversation.com/bank-codes-of-conduct-add-bars-to-the-window-dressing-and-make-them-legally-binding-105391]
*
Global Compact
*
Guidelines for Multinational Enterprises
The OECD Guidelines for Multinational Enterprises are recommendations on responsible business conduct addressed by governments to multinational enterprises operating in or from the 50 adhering countries. The Guidelines provide non-binding princip ...
of
OECD
*
Don't be evil
"Don't be evil" is a phrase that was used in Google's corporate code of conduct, which it also formerly preceded as a motto.
Following Google's corporate restructuring under the conglomerate Alphabet Inc. in October 2015, Alphabet took "Do the r ...
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 and financed by the Ministry Of Science and Innovation Spanish
Web Portal Codes of Conduct
Business
Labour law
Environmental law