Colleen Theron, CEO of Ardea International, discusses the value and impact of supplier codes of conduct in the context of a white paper just published.
Ardea International and the Westminster Business School at the University of Westminster undertook a joint research project to discover what role corporate codes of conduct have in improving transparency in supply chains. In this project, the team was motivated to answer the question: how are codes of conduct used to establish supply chain transparency?
Critical to organisations too – and company secretaries and governance professionals will want to have oversight on its development – is the overall business case for developing Codes of Conduct and why they should invest in a strong code of conduct.
The paper covers what a code of conduct is and its role in delivering accountability and transparency. It also explains how to use a code of conduct and finally provides suggestions on how to use a code of conduct.
This paper begins in Section 1 by defining what a code of conduct is (both in practical and aspirational terms). It then summarises both the key milestones that influenced the creation of the UN Global Compact (UNGC) and the UN Guiding Principles on Business and Human Rights (UNGPs).
The UN’s guidance was selected because the Global Compact provides a general framework for the issues that should be addressed by organisations in their code (UN Global Compact, 2004).
In Section 2, the paper describes the role of a code of conduct by first providing a background discussion on transparency, the power dynamic between buyers and suppliers, and the importance of acknowledging organisational culture. It then discusses the code’s role as a tool for implementing good business practices.
Section 3 explains how to use a code of conduct within the organisation. It addresses how to ‘set the scene’ for a code to be effectively implemented, who should write the code, and how to discuss the code with suppliers. Section 4 offers suggestions for how to draft a code, while the final section discusses the results of the team’s survey assessing code implementation.
The research team concluded that, while codes are important, they are ineffective if their requirements are not met with actions to bring about transparency. The code should support an authentic determination to create company values and strong business relationships that encourage honest communication and transparency (see section 2). Strong leadership is required to influence and implement codes of conduct that result in genuine ethical transparency.
A template code of conduct available is to purchase for £120 plus VAT. Get in touch to order, and/or if your organisation requires help with reviewing or drafting your code of conduct.
Ardea International is a specialist sustainability, business and human rights consultancy with expertise in modern slavery. We harness our legal expertise to help organisations meet their legal compliance obligations and develop best practice standards. Our services are provided with a view of developing appropriate, legally compliant and robust policies and procedures to underpin ethical practices. Transparent supply chain management is at the heart of our work to support organisations to become more sustainable, protect the environment and foster a just society. Our approach is personable, practical and principled.