CODE OF CONDUCT

A set of rules and principles established voluntarily by a corporation or an organization in order to define its ethical standards and regulate its behaviours and practices.

"International trade union organizations have long been concerned about the power of multinational corporations and were among the first to demand codes of conduct addressing the behaviour of international business. In the 1970's, trade unions joined the calls for a United Nations Code of Conduct for Transnational Corporations. The International Confederation of Free Trade Unions (ICFTU) closely followed the UN Commission on Transnational Corporations and provided it with expert advisors as well as detailed comments on its draft code."
(International Labour Organization (ILO), "The International trade union movement and the new codes of conduct," visited 2009-06-08)

"The recent proliferation of codes of conduct can be attributed to several factors. With media reports and exposés on child labor becoming more frequent, consumers - and therefore companies - are becoming increasingly concerned about the conditions under which the garments they purchase are made. Companies' adoptions of codes of conduct serve to ease consumer concerns - and their own - that they may be contributing to the exploitation of child labor. Often companies adopt codes to project a positive image and protect their brand-name or quality reputation."
(U.S. Department of Labor, Apparel Industry and Codes of Conduct: a Solution to the International Child Labor Problem?, 1996, visited 2009-06-08)

Corporate codes of conduct are principles to which companies adhere voluntarily. Most of them are created according to the norms of the Organization for Economic Co-operation and Development (OECD) and the conventions of the International Labour Organization (ILO) regarding human rights.

Codes of conduct and social labels – which are labels informing consumers that a product was manufactured under working conditions satisfying a given set of social standards – are both voluntary actions aiming at social responsibility. While codes of conduct are created by a company itself, social labels are set by third-party organizations.
(adapted from International Labour Organization (ILO), What we do?, visited 2006-03-05)

Codes of conduct can pertain to various areas such as human rights, business ethics, the environment, respect for the community, competition, working conditions, health, security, scientific research and technology. They usually play a role in the relations a company establishes with its clients, suppliers, distributors, staff, shareholders, and the community.

According to the ILO, a code of conduct is a means for companies to outline "their values, principles and guidelines in a variety of areas," thus enabling them "to clearly and publicly state the way in which they intend to do business with their suppliers, customers, consumers and shareholders."
"A code of conduct also depends on its credibility: the extent to which it is taken seriously by industry, unions, consumers and governments. Credibility, in turn, depends on monitoring, enforcement and transparency: the extent to which foreign contractors and subcontractors, workers, the public, non-governmental organizations and governments are aware of the code's existence and meaning. Implementation of the principles established in a code of conduct can be monitored internally (e.g. through a committee, ombudsman or field visits) or externally (e.g. through an NGO)."
(International Labour Organization (ILO), Corporate Codes of Conduct, actrav, Bureau for Workers' Activities, visited 2009-06-08)