Company code of conduct
A company code of conduct is a document written up voluntarily by a company in which sets out a set of principles that it commits itself to follow. In some cases, codes of conduct reach suppliers, subcontractors and third parties. It is a type of code of conduct.
The company code of conduct appeared in the 1970s but in the course of the 1990s process that multinational corporations (MNE) generally began to create and disseminate to the public many codes of conduct to those who undertake to adjust their activities.
It is about a phenomenon with regards to MNEs and their relationship with workers, society and the environment. They have also generated extensive debates about the conditions of their validity and their control, which in turn has led to the creation of "multinational enterprise observatories"
A company code of conduct is related to the International Framework Agreements (sometimes also called bilateral codes of conduct) that a coupe of MNEs have signed with World Trade Unions, as well as with the multilateral codes of conduct that have been signed by companies with trade unions, NGOs, environmental organizations, consumer organizations, etc.
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.
In general an existing company code of conduct only applies to the parent company and sometimes with restrictions in the subsidiaries. Only exceptionally, codes of conduct apply to suppliers and other subcontractors.
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.
The issue of Monitoring
One of the first issues that was raised by the company code of conduct was monitoring their 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 the 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 that have raised
Codes of conduct are related to the 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 Research Institute for Social Development (UNRISD) has estimated a few hundred existing company code of conduct. It is a reasonably small amount to reach multinational corporations acting globally. The UNCTAD has 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 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 he majority of workers work and where they produce the majority of violations.
The legal validity of the same and the ways to enforce compliance it is also being discussed.
See also
External links
- Codes of Business Conduct, OIE
- 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
Corporate culture