Code of Conduct: Why have one?

It is undeniable that the actions of companies cause numerous and diverse impacts on the environment in which they operate in society. Every day, we are faced with news published in the media about the activities of companies that can be both positive and negative.

For this reason, people are increasingly attentive and sensitive to the way in which companies behave and carry out their activities, requiring not only to act in compliance with the law, but also to act ethically and responsibly, in all aspects.

In this same movement, countries' laws have also evolved to require more appropriate business conduct against corrupt behavior that undermines good competition and transparency.

To face the new legal requirements and those of society itself, companies began to create their integrity programs, in order to protect their assets and the interests of their stakeholders.

The code of conduct as part of the integrity program

A Office of the Comptroller General of the Union (CGU), has encouraged companies to adopt ethical standards of conduct in their interactions with the national and foreign Public Administration through the institution of their integrity programs, thus conceptualizing an integrity program as:

”the set of institutional measures and actions aimed at the prevention, detection, punishment, and remediation of fraud and acts of corruption. (...) The integrity program has a preventive focus, as it primarily aims to reduce the risks of corruption in each organization. In the event of any deviation or breach of integrity, the Program must act to identify, hold responsible, and correct such flaw quickly and effectively”.

This incentive is also reinforced by the offer of Pro-Ethics seal by the Secretariat for Transparency and Prevention of Corruption (STPC), of the CGU. The purpose of Pro-Ethics is to promote the voluntary adoption of integrity measures by companies, through public recognition of those that, regardless of their size or activity, are committed to implementing preventive measures, detection and remediation of acts of fraud and corruption. This commitment must be demonstrated by answering the Pro-Ethics questionnaires and sending documents.

Among the various questions and requests for documents, Pro-Ethics requests information about code of conduct, to whom it applies and where it is disclosed.

The structure of such a program must be based on the characteristics and current risks of the activities carried out by the company, which is why it must be reviewed and updated annually. After all, organizations are constantly changing.

In addition, the same Decree presents a series of requirements for the validation of an Integrity Program. One of them is precisely the drafting and institution of the organization's code of conduct:

”Art. 57. For the purposes of the provisions of item VIII of the caput of art. 7 of Law No. 12,846 of 2013, the integrity program will be evaluated, regarding its existence and application, according to following parameters: (...) II - standards of conduct, code of ethics, integrity policies and procedures, applicable to all employees and managers, regardless of position or function performed”.

Thus, one of the relevant components of an adequate Integrity Program is the preparation of a code of ethics and conduct which will establish guidelines for conduct for the ethical conduct of the company and of its respective directors, employees, partners and suppliers acting on behalf of the company.

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What is a code of conduct?

The code of conduct is the most important instrument of integrity of a company, since it contains the general principles of conduct that will guide the actions of all those who carry out their activities on behalf of the company or with whom the company has relations, according to its ethical standards and values.

It is essential that senior leadership is committed to drafting the code of conduct and is also committed to being an ethical example to be followed by everyone in the organization. The example that comes from above (Tone at the Top) is valuable for the dissemination of integrity.

What should be included in the code of conduct?

Various issues, whether legal, social, environmental, etc., depending on the organization's risk and with whom it maintains or may have a relationship, may and/or should be addressed in the code of conduct. For example: expected conduct, company values, intolerance to corruption and fraud, diversity, prohibition of the practice of moral and/or sexual harassment, protection of confidential information and intellectual property, situations that characterize conflict of interest, transparency, relationship with competition, prohibition of the use of child labor and forced labor, among many others.

As an example, imagine a garbage collection company. It certainly depends on the granting of several authorizing certificates for its activities, participates in tenders with the Government so that it can offer its collection services to society and must comply with specific environmental regulations so that garbage can be disposed of properly and with the minimum impact on the environment.

For this company, specifically, some issues cannot go unnoticed and must be addressed in its code of conduct, such as:

• commitment to the environment;
• interaction with public bodies and agents;
• commitment to quality and work safety with those who work directly in the collection and disposal of garbage;
• receiving and offering gifts, gifts, and hospitality.

It is undeniable that many other issues should or may be addressed in this company's code of conduct. However, considering your area of activity/service provided, the need to address the topics mentioned above is crystal clear, so that everyone around you is aware of the guidelines to be followed and what is valued by the company.

It is also important that the code of conduct includes the responsible department and the appropriate channel so that violations or apparent violations related to its code, policies, or laws in force can be reported, so that illegal, irregular or non-compliant acts with the mentioned documents can be investigated by the company.

Finally, although not mandatory, it is suggested to prepare a declaration and science term (either within the code or in a specific term), where the party that received the company's code of conduct certifies that they have not only received it, but are also aware of the full content of the said integrity instrument and agrees to observe it fully.

This is because the subscription brings strength to what the company expects from the party with whom it maintains a certain relationship, such as an employment or contractor for a specific service, in addition to serving as proof that, in fact, the other party was fully aware of what was expected of them.

Why have a code of conduct?

With all the content provided here, we can finally answer our main question: why have a code of conduct?

Let's go!

When drafting a code of conduct, disclose it, make it available and require compliance with it to all your employees (regardless of their hierarchical position), customers, business partners, suppliers, and others stakeholders, the company ends up with:

• Guide the people with whom you have relationships or interactions;
• Disseminate ethical and legal practices in accordance with their values;
• Be more transparent in your relationships and negotiations;
• Create an ethical, respectful, more productive and healthy work environment;
• Mitigate or eliminate risks of misconduct;
• Strengthen and increase the visibility of your image and brand; and
• Promote your growth in an ethical and legal manner.

For all these benefits to be realized, it is advisable for the company to:

• Advise those with whom you have a relationship or interaction about the expected posture;
• create oversight mechanisms regarding compliance with the guidelines of your code of conduct;
• provide training, related to integrity issues and especially to the topics covered in your code of conduct.

In addition, through specific training on the code, it is possible to verify a great benefit to the company, since, in a single time, you can disclose your code of conduct and verify, through a questionnaire, for example, whether the content of the code was, in fact, absorbed by the parties that received it.

With this content absorption information, the company will be able to verify which points can be improved in its code of conduct and, even, verify the need to create a specific policy on a particular topic, such as tenders.

For all these reasons, but not limited to them, there is a real need for a code of conduct: the promotion of an ethical and legal culture supported by senior leadership.

How to ensure that everyone knows the code of conduct?

It is important to bear in mind that, for the guidelines of the code of conduct to be observed, the company must disclose it and ensure that all its employees, customers, business partners, suppliers, and others stakeholders, know, in full, its entire content.

The need for disclosure and knowledge of the Code is even more latent, in situations where the company verifies and finds, in fact, a violation of integrity and needs to quickly adopt restorative measures and new control mechanisms to prevent the same practice from recurring.

But how to do this, especially if the company has a large number of employees and several suppliers, for example?

For the disclosure and knowledge of the full content of the company's code of conduct, there are several effective and available ways. As an example, we can mention: sending the Code by emailing, in-person meeting or online with all members of the company, specific training on the code of conduct, etc.

In addition to this, in order to be transparent with all those with whom it maintains or may maintain relations and to guide and inform everyone (whether individuals or companies) about the company's values and guidelines, the company may: publicly disclose its code of conduct in its website official and/or Whistleblower Channel; send to your suppliers, via emailing, your Code; provide your Code at the time of entering into a new service contract, etc.

However, as we have seen, it is suggested that the Code be signed by all those with whom the company has a relationship.

Now, you must be thinking:”Wow, it must be quite complicated and difficult to control to obtain the signatures of so many employees and suppliers and, above all, to monitor and record who has signed the document or not.”.

This type of thinking is very common and that is why, often, companies fail to collect the signatures of those with whom they have a relationship and, despite having a code of conduct, they have no means of proving (when necessary) that, in fact, their values and guidelines were passed on and that certain conduct had been expressly prohibited.

However, today, this thought cannot and should not prevail, after all, the solution is simpler than imagined and the answer is on the tip of the tongue: electronic signature.

Let's now understand how this electronic signature collection process works?

The use of electronic signatures in companies

First of all, you should know that electronic signatures are super easy, fast, legally valid, without red tape and the environment thanks you.

With the advancement of technology, nowadays, for many of the documents that depend on a signature, such as a power of attorney, credit concession agreements and contracting services, it is no longer necessary to go to a store/bank or a notary office and sign manually to certify their validity.

This is because, with the edition and publication of Provisional Measure No. 2,200-2, since 2001, the legal validity of electronically signed documents is guaranteed, provided that the requirements of the law are met; the above-mentioned validity was recently reinforced by Law No. 14,620/2023, which amended the Code of Civil Procedure (CPC).

For these and other reasons, Clicksign appeared 13 years ago, the first electronic signature platform in Brazil and the only Brazilian company in the subscription market with certification ISO 27001 (globally recognized standard for the management of Information Security).

Through the direct use of Clicksign's electronic signature platform or a integration via API, it is possible to forward, automatically and at once, the code of conduct to an entire company.

Therefore, in order to guarantee greater robustness to the document and gather evidence of the science and agreement of all those with whom it has a relationship, the company may obtain the signature of its code.

Remember, with the signing of the code of conduct, either in a declaration form within the code itself or in a separate term, the party with whom the company maintains any type of relationship cannot claim ignorance of the rules of conduct described therein. This is extremely valuable.

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