FCPAméricas Blog
Best Practices for Drafting Codes of Conduct
10.29.2014
Oftentimes, a code of conduct is the first step that companies take when implementing an anti-corruption compliance program. The Resource Guide to the FCPA refers to the Code as a key document – “a company’s code of conduct is often the foundation upon which an effective compliance program is built.” There are certain best practices that companies should consider when establishing or updating their codes of conduct. This post highlights seven.
Identify areas to be addressed. When establishing a code of conduct, one of the first steps is to identify which areas will be addressed in the document. In addition to anti-bribery, there might be other important areas that will vary from company to company. For a mining company, for example, environmental-related aspects may be key. Professionals drafting the code should talk to different areas of the company to identify main aspects of the operations and address associated risks in the code. It is important to note that relevant aspects may change over time, and the code should be updated accordingly. For example, the company might expand into new lines of business, or applicable legislation might be amended.
Make it concise. Companies should consider implementing codes of conduct based on principles instead of detailed instructions. For example, they might provide that the company should only have relationships with reputable and qualified third parties, rather than specify that the company must perform background checks (and include detailed steps) and include anti-corruption clauses in written contracts. To the extent possible, detailed instructions should be left to specific policies, which should be referred to in the code. In fact, practically speaking, a lengthy code of conduct is less likely to be read in full (and with attention) by employees. Thus, companies should keep it concise. Using principles helps keep the document brief and focused on key areas and provisions. It also avoids having to change the code every time an internal policy or procedure is altered.
Make it clear. In addition to preparing the code of conduct in the local language, companies should use plain language. Legalese or other technical terms should be avoided. This is because the document will be distributed across the company to employees with different backgrounds and levels of education, from the management room to the supply room.
Make it accessible. Having a code of conduct that is unknown to employees is the same as having no code at all. Therefore, companies should make it accessible to all employees. Another good practice is to make it available to all third parties conducting business on the company`s behalf.
Good editing makes a difference. Good editing improves the format of the code of conduct, allowing relevant sections to be found easily and making the document easier to read. In certain cases, visual materials (e.g., pictures) make the code friendlier and help transmit the concepts to the reader.
Include a message from senior management. Companies should include a message of commitment to the code from senior management emphasizing to employees and third parties the importance of understanding and complying with it. As described here, this is one of the ways in which that top-level management can show anti-bribery compliance commitment.
Questions. When launching a code of conduct, it is a good practice to provide training to employees (and to third parties acting on the interest of the company) about it. Questions about the code and doubts about specific situations may also arise afterwards. Given this, companies should designate certain functions or departments in the code to assist and address such instances, when they arise.
The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.
© 2014 FCPAméricas, LLC
Post authored by Carlos Henrique da Silva Ayres, FCPAméricas Contributor
Comments
November 24th, 2014 at 7:23 am
Thank you very much for this: a useful checklist. If I may, I would add one more (or perhaps it is an embellishment of the editing comments.
The biggest challenge is to draft a document that can be understood by staff at all levels. Most staff are mot lawyers and do not think in concepts and words that legal professionals use. The risk is that a document is perfectly phrased from a legal point of view but becomes too wordy and complex for other staff to understand and internally digest.
This process requires time and open communication. Testing the text out on selected staff for understanding and clarity, may turn out to be aan eye opener for the original drafters. Please be open-minded about it and a final product that has been tested on staff (likely in more than one iteration) will likely be much more effective.
It is worth the time and effort to achieve a document that is clear as well as complete!
November 28th, 2014 at 5:03 pm
Very nice article, and thanks for bringing our attention to such major issues to be consider in drafting code of conduct.
One issue that might be an added value to be considered in drafting the code is to consult with employees before drafting so the code would come from the roots. Enhancing the implementation of the code would required to have the sence of ownership.
Second isuue is related to complying with code, do you agree that punishment should be included in case there’s a breach of the code?
Thanks