Codes of corporate conduct: expanded review of their contents

This paper looks at the contents of 246 voluntary corporate codes with respect to issue coverage and code implementation procedures.

The codes examined differ considerably in terms of their content and degree of detail. This reflects the underlying diversity of the organisations issuing the codes, which differ in terms of size, sector and regional affiliation. All the firms subscribing to the codes covered in this study are based in the OECD. The firms operate in a variety of sectors including high technology, mass retailing, heavy manufacturing, light manufacturing, primary production and financial services. Some codes in the inventory are issued by business associations and others by NGOs.

The codes address a variety of issues, many appearing to arise from concerns of the general public:

• environmental management and labour standards dominate other issues in code texts
• consumer protection and bribery and corruption also receive extensive attention
• many codes contain extensive text on fairly narrow questions of internal control and protection of shareholder value. These issues are particularly important for financial intermediaries, conglomerates and very large manufacturers
• another objective that appears in some of the codes is the desire to manage risk of liability or to ensure compliance with the law in such areas as competition and environment

The statements made by some of the codes suggest that economic motivations related to the desire of organisations to compete successfully in the market place can also play a role in an organisation’s decision to develop a code of conduct. Relatively often mentioned considerations are the protection or enhancement of an organisation’s reputation and stronger customer loyalty.

Codes addressing labour and environmental issues differ considerably in how they approach these two issues. While some mention labour and environment only in passing, many of them are devoted exclusively to one of these two issues. Especially in these “single issue” codes, the overall level of commitment is often quite high, although the specifics of the commitment vary. Many of these codes have been influenced by external reference standards (other codes and international agreements and recommendations).

The codes surveyed show the diversity of approach which organisations take to including information about the process of implementation in their codes. The codes are quite selective in the elements of implementation which they describe and the detail of information provided. Certain elements, such as policy to inform stakeholders of the code and monitoring, are mentioned more frequently than others. [authors]