Fighting corruption: a worldwide endeavour

Over the recent years, a series of anti-corruption initiatives have been undertaken by the OECD, World Bank and the IMF as well as by the European Union and the United States. These include the Inter-American Convention Against Corruption (1996), the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997) and the Criminal Law Convention on Corruption adopted by the Council of Europe in 1998. The European Union has also passed in 1997 a Convention that criminalises transnational bribery. As regards the EU-ACP Cotonou Agreement, there are several clauses directly related to issues of corruption therein.

All these conventions have clearly pointed out the role that the private sector can play in the fight against corruption. As a first step, the JEC propounds the adoption of a code of conduct.

The purpose of a code of conduct

If a code is a comprehensive collection of laws, instructions or precepts in a given subject area, a code of conduct is a comprehensive statement of the guiding principles of conduct by which a company expects its directors and employees to behave when carrying out their work. Such a code states the values for which the company stands and by which it professes to do its business. It states publicly to customers, shareholders, competitors and all who come into contact with the company what standards of dealing they can expect from its people.

Its value

If a company director or employee is to be held to account for his conduct, it is elementary fairness that he should have been told what was expected of him and that he should know in what way his conduct has fallen short of those expectations. A clear, concise and accessible written statement of the standards by which he is expected to behave in his working environment is a basic requirement.

Its content

A code of conduct usually contains general statements of principle loosely grouped into areas covering diligence, efficiency and thrift; confidentiality and the handling of secret information; personal responsibility and independent judgment; fair dealing and integrity, and professional training. The code can also be broadly divided into provisions dealing with personal integrity and those dealing with managerial responsibilities for upholding the integrity of the company, such as:

• devising and putting in place appropriate systems of operation;

• ensuring that subordinates are informed and aware of their duties;

• applying systems of supervision and accountability;

• applying proper selection procedures;

• enforcing the code of conduct and maintaining company discipline.

A company code of conduct should reflect and reinforce the basic standards set in the criminal legislation dealing with dishonesty and corruption, legislation which in turn provides the foundation of the code. In consequence breach of certain provisions of the code will amount to a criminal offence. Other provisions reflect terms of employment, breach of which constitute disciplinary offences under the company's code of discipline. It is equally a function of a code of conduct to guide employees away from situations in which their integrity can be compromised or the good standing of the company damaged.

Pre-eminently a code performs the essential function of indicating to employees the standards of conduct that should imbue every aspect of their work. Its provisions should state the guiding principles and, at the same time, provide advice sufficiently specific to be of use in any given situation.

A code should, of course, require compliance with the law. The duty to act lawfully means that the employee must not do anything prohibited by the law, particularly the criminal law on corruption. Furthermore if he is in charge of others he should organise and supervise their work in such a way that they are not exposed to unnecessary risk of breaking those laws.

Typically a code will state the company credo that honesty, integrity and fair dealing are its important assets in business. Consequently, all directors and employees must ensure that the company's reputation is not damaged by dishonesty, disloyalty or corruption.

The code will usually go on to deal with:

• the personal conduct of directors and employees (especially covering bribery, illegal gifts and commissions);

• relations with suppliers and contractors;

• relations with customers and consumers;

• responsibilities to shareholders and the financial community;

• employment practices; and

• responsibilities to the community.

It will deal finally with compliance with the code and the consequences of failing to comply.

Cultural differences will make for different approaches. The acceptance of gifts is a difficult area. Everyone would agree that gifts and any other benefits that could, or could appear to, influence the director or employee in his duties should not be accepted. How to distinguish such benefits from those that are innocuous is the problem. Essentially two approaches are to be found in codes of conduct.

The first imposes a blanket prohibition on the acceptance of all benefits except those for which permission is given. Certain types of benefit are given general permission, other types require specific permission on a case by case basis.

The other approach seeks to distinguish in the code itself which benefits may be accepted and which may not. The former approach makes the employee's position very clear - he can accept nothing for which he does not have permission. The latter approach places the responsibility on the employee to decide in any given situation whether the benefit falls on one side of the dividing line or the other. But whatever the test, the employee needs to know what his company's stance is on this question of gifts and what is expected of him.

Its preparation

While it is important that the company's statement of what it stands for and what it expects of its people should emanate from the top, it is equally important that employees should contribute to drafting the content and setting its tone. The code must address the ethical issues people have to face every day.

Those who work in purchasing or contracting know all about everyone in the supplier community wanting to be a friend and wanting to do favours. Those in marketing are bound to have to discover what the competition is doing, to gather competitors' intelligence, things they do not want to disclose. The dilemma is how to do that honourably. A code must be pragmatic and practical, it must work, it must be good for profits. Above all, it must be accepted by those who are to lead their working lives in accordance with its guidance. They are more likely to live by it if they have had a hand in its preparation.

Its promulgation and observance

It is perhaps unnecessary to make the point that simply sticking a copy of the new code on the staff canteen wall is unlikely to have much effect on the ethos of the company. Not only must every member of staff receive his or her own copy, everyone must be given practical instruction about its provisions and how to comply with them. Everyone must understand the importance of compliance and the consequences of not complying. But above all, it is the responsibility of management to ensure that the practices of the company are consistent with the code, that there is no contradiction between the standards required of staff and the goals or targets they are expected to meet. It is no good insisting on high quality control standards and at the same time fixing delivery times that can be met only if corners are cut. It must also be the responsibility of every manager and supervisor to make sure that those for whom they are responsible are constantly aware of the standards set by the code and in practice carry out their work in conformity with them.

Its enforcement

When a company has stated in a code what it stands for and how it wants its people to behave and when management and staff apply the code's guidance in their daily work, what must follow is enforcement of the rules. Deliberate failure to comply with the standards required must be met by appropriate disciplinary action. A code honoured more in the breach than the observance could hardly be expected to have any positive effect on the way the company does business. However it is important that, in deciding the appropriate sanction, management should consider whether the breach results from ignorance or from deliberate, self-serving wrongdoing knowing that the company would disapprove or, as is often the case in the headline scandals that sometimes engulf companies, from wrongdoing done for the company's profit in the belief that the conduct would be condoned by management. The company that breeds this third type of employee needs to look at itself. This is the company that is a suitable case for treatment.

Its periodic review

A code of conduct needs to be kept up to date. It should be reviewed at regular intervals to ensure that it reflects changes in the law and gives appropriate emphasis to current issues of concern.

A model, not a prescription

The JEC comprises distinct sectors of the business community. The ethical issues faced daily by the different sectors vary according to the sector. While the core values expressed in a code for the business community are shared values, the guidance required by employees in the financial services industry will emphasise certain conduct which may have little relevance to those in the construction industry. Furthermore, the law applying to one sector may not apply to another. And, since the tone and style of codes of conduct will depend on the management style of the company itself, it is not possible to prescribe a code that would fit the needs of all sectors without making it unwieldy and partly irrelevant.

For these reasons this code is a model to be adapted and modified, in the first place by each of the sectors of the business community and in the second by the individual companies of these sectors. At each stage however the core values expressed in this model should be faithfully reflected.

The Model Code

Introduction by the chairman/managing director

• Our reputation for honest dealing

• The value of our reputation

• pholding our reputation paramount

• Code sets out the standards of behaviour that have earned us our reputation

• These are the standards which all of us are expected to uphold in conducting the company's business. They go beyond the requirements of the law.

• We are all to observe this code. Breaches of it will be disciplined.

Core standards

PERSONAL CONDUCT

1. We must observe the laws of Mauritius in everything we do. In particular we must not try to bribe any public official in any circumstances anywhere.

2. Our dealings with all who have contact with us must be straight, fair, honest, courteous and efficient.

3. We, as the people of the company, must not ask for any gift or favour from anyone if that gift or favour has an influence on the way that person does his job.

4. We must not accept any gift or favour from anyone in connection with the way we do our jobs. Sometimes a token of appreciation for a job well done cannot be refused without appearing impolite. In that case we must comply with company rules and, if in doubt, seek and heed the guidance of our personnel manager/ethics adviser on whether it is appropriate to keep that token.

5. We must never offer any gift or favour to anyone in order to influence that person in the way he does his job.

6. While moderate business entertaining is acceptable, we must guard against hospitality that appears to be aimed at influencing us in the way we do our job. Whenever possible, hospitality should be reciprocated.

7. We generate, receive and store much information that is valuable to outsiders. We must not disclose such information without permission. We each have a responsibility to ensure that such information under our control or to which we have access is properly safeguarded.

8. We must not allow our personal interests to conflict with our official duties in the company. If any of us has a personal interest that may influence, or appear to influence, the way we do our job, we must declare that interest and take appropriate steps to resolve the conflict of interest. We must each make sure that our dealings with customers, suppliers, contractors and colleagues do not place us in a position of obligation that may lead to a conflict of interest.

9. The company's property and products belong only to the company. They do not belong to us. If any of us takes company property or products for our own use or to give or sell, he commits theft and is liable to dismissal and prosecution. The company's services and facilities are not to be used for private purposes except with prior permission.

   RELATIONS WITH SUPPLIERS AND CONTRACTORS

10. We believe in fair and open competition. We treat our competitors honourably and we aim to develop and maintain long term relationships with suppliers and contractors based on mutual trust.

11. Our procurement of supplies and services is done to the highest ethical standards that assure a quality end product and the continued confidence of customers, suppliers and the public. We must ensure that the hire of services and the purchase of goods is based solely on price, quality, service and need. We must also ensure that our suppliers and contractors are paid on time and according to agreed terms of trade.

    RESPONSIBILITIES TO SHAREHOLDERS AND THE FINANCIAL COMMUNITY

12. The aim of our company is to achieve growth in earnings for our shareholders over the long term by productive, efficient and competitive operations.

13. We acknowledge that our shareholders and potential shareholders are entitled to know all information that is necessary to evaluate how their investments are or would be managed. We make available true and accurate information on the management of the company, its financial position and its general plans to all who have a legitimate interest in the company.

14. It is the policy of the company to maintain complete and accurate records and accounts and to present them in accordance with all applicable laws and professional accounting standards. We do not tolerate any false, artificial or misleading statement or entry in any of the company's books, accounts, records, documents or financial statements.

15. None of us must ever make use of insider information, namely information that has not been made public, for our personal advantage.

    EMPLOYMENT PRACTICES

16. The occupational health, safety and welfare of its employees are a prime concern of the company. It is the responsibility of us all to comply with all occupational health and safety laws and to provide good and safe working conditions.

17. The company aims to achieve equality of opportunity and treatment for all its employees in recruitment, training, promotion, transfer, benefits and discipline. All employees are treated as individuals according to their ability to meet job requirements.

18. The dignity and individuality of every employee will be respected. The privacy and confidentiality of employee records will be safeguarded.

19. An employee who believes he or she is being required to act in a way that is inconsistent with the standards in this code or who believes others are breaching the code should report the matter through an appropriate channel. The company undertakes to ensure, to the best of its capacity, that no prejudice whatsoever results to an employee who makes such a report on reasonable grounds or in good faith.

    RESPONSIBILITIES TO THE COMMUNITY

20. Care for the environment is one of the company's main concerns. We are committed to sustainable development in that we aim to manufacture, handle and dispose of all materials in compliance with the law and in a responsible manner without creating risk to human health or the environment.

21. Participation by directors and employees in community activities and civic affairs is encouraged.

22. The company supports charitable organisations and encourages directors and employees to do likewise.

23. The company endorses the democratic principles of Mauritius. Contribution to political organisations or electoral candidates is specifically recorded in the company's books and is made in accordance with all applicable laws.

    COMPLIANCE AND ENFORCEMENT

24. It is the personal responsibility of every director and employee to understand and comply with this Code of Conduct. Managers and supervisors are also responsible for ensuring that those they supervise understand and comply with the code. Problems encountered in complying with the code and suggestions for improving it should be made promptly to the manager responsible for keeping the code in good working order.

25. Any breach of the code will be promptly dealt with.

26. Channels of complaint are open to shareholders and potential shareholders, customers and consumers, suppliers, contractors and directors and employees of the company. All complaints will be considered impartially and efficiently.

    Other standards

    PERSONAL CONDUCT

27. We must each always be aware that our conduct when we are off duty can reflect on the company's reputation. Our social life is usually not entirely separate from our working life.

28. Personal conduct, whether on or off duty, that adversely affects work performance is not acceptable.

29. It is good practice for an employee to seek advice and permission before undertaking a secondary employment.

30. A competitive employment or economic activity, paid or unpaid, regular or casual, must not be undertaken without prior permission.

    RELATIONS WITH CUSTOMERS AND CONSUMERS

31. We aim to provide efficient and courteous service to our customers.

32. We aim to keep our customers truthfully informed about the company's capabilities without misrepresentation, exaggeration or overstatement.

33. We aim to provide our customers with products that meet high standards of safety, quality and reliability. We take full responsibility for products that fail to meet these required standards.

    EMPLOYMENT PRACTICES - INFORMATION FLOW

34. Employees are kept informed of company matters affecting them, including the company's goals, directions and performance. Channels of communication that foster an atmosphere of mutual trust and respect between the company and its employees are always open.