In 2023, business is not all about money.
In fact, multinational organisations have been reaping the inherent benefits of corporate ethics for decades. Large companies spend enormous amounts of money in building customer loyalty, reputation values, investor interest, and employee commitment – all brought about by ethically conducting their affairs.
The sharp decrease in compliance failures and litigation as a result thereof seemed to be an added benefit to their endeavours.
The executives of large corporations are experiencing a paradigm shift in consumer sentiment, where consumers are expecting good corporate citizenry in addition to competitive pricing and services.
Suddenly, healthy business is more than bottom lines, earnings, or profits.
Social and Ethics Committees are now instilled in Corporate Governance Systems across all ownership structures, even in joint ventures.
How can businesses make the most of Corporate Codes of Conduct?
Your Codes of Conduct is a moral compass for organisations. It has become a powerful tool in the arsenal of governing bodies. Together with the relevant legislation, it becomes the source of an organisation’s compliance obligations.
What is a Corporate Code of Conduct?
A Corporate Code of Conduct is:
- A voluntary commitment to abide and conduct your affairs according to certain ethical standards and principles. Think of Woolworths’s Sustainable Sourcing practices.
- It is intended to serve as a moral compass in the decision-making process of every functionary of an organisation.
- It has to be implemented by the highest level of authority in an organisation.
- It has to be applied to the governing body and employees of an organisation.
- Occasionally it is also extended to suppliers of an organisation.
The Anatomy of a Corporate Code of Conduct
There are a few factors to consider that makes up the anatomy of Corporate Codes of Conduct:
- The level of detail
- The topics and content
- The language used
The level of detail
Corporate Codes of Conduct are different from more traditional codes of conduct, like those used in labour environment. A traditional code of conduct, like in labour law, will provide detailed and specific contractual obligations.
A corporate code of conduct is NOT this – it is simplified ethical principles and standards.
The topics and content
What these look like, differ substantially among organisations depending on their:
- Size
- Sector
- Convictions
The language used
It is very important to remember that codes of conduct are relevant to many different audiences, from all walks of life and different levels of education. It is therefore important to draft them in plain understandable language without any legalese.
What issues are addressed with a Corporate Code of Conduct?
A Corporate Code of Conduct will address a variety of issues, but will typically deal with the organisation’s ethical standards on:
- The Environment
- Labour
- Science and Technology
- Competition
- Personal Information Management
- Taxation
- Bribery and Corruption
- Consumer Protection
- Good Corporate Citizenry and Social Responsibility
The general implementation and administration of the code should ideally also be address in the code itself.
The Practical implementation of a Corporate Code of Conduct
Certain elements form the “foundation” when implementing a Corporate Code of Conduct.
If you are properly adhering to your code of conduct, you will inevitably need to enforce various policies or frameworks in your business, including and for example:
- Anti Bribery and Corruption Policies
- General Corporate Governance Frameworks
- Gifts, Benefits and Entertainment Policies
- Whistle Blowing Policies
This is where a good Corporate Code of Conduct can become tricky for most businesses. It is easy to say:
“ I want my customers to think more highly of me so they will spend more money with me”
It is difficult to implement these measures in a way that does not put your business at risk, nor contradict yourself between frameworks or policies.
This is where businesses need a competent legal team to help them address their Corporate Code of Conduct and put these policies in place to have a strong, healthy, and fully integrated compliance and governance system.
Reap the benefits of a fully integrated compliance and governance systems by contacting us.
