sake of convenience, we will stick to the term “Code of Ethics”. Codes are aimed at making staff
members clearly understand principles of corporate ethics. Companies design strategies to ensure that
employees behave in accordance with these principles and, in addition, expect similar behavior from their
As a rule, codes state the main goals and values of a company. Codes are considered to form a foundation
structures, consumers, in a word, by all those stakeholders, involved in a company’s success. Moreover,
This was stated very convincingly by George Merck, son of the founder of Merck Corporation: “We try
never to forget that medicine is for people. It is not for the profits. The profits follow, and if we have
remembered that, they have never failed to appear.”
Codes are very important for our country, because in many local companies people have no
or the subtleties of building relations with management, colleagues, suppliers and others. A code is more
than a list of rules. Provisions of codes ensure clear understanding of ethical norms, as applied in various
situations, where laws fail to provide unambiguous answers.
Preparation of ethics code shall be delegated to experts competent in this area. Prior to the compilation of
from rank and file staff members to managerial staff, to inquire into their opinions and wishes in respect
to the future code. It is also highly recommended to discuss drafts of future codes with all employees in
order to incorporate their comments. Codes establish general principles of the life of an organization and
govern all personnel from chief executive to support staff.
Structure of codes
Codes consequently reflect relations of a company with all parties involved as described below.
Consumers - codes provide for timely supply of high quality goods and services.
Employees – codes ensure safe workplace and healthy work environment, guarantee fair and just
treatment of every employee, respect for human dignity and rights.
principle of fair competition.
development of civil society. Support of cultural values and strengthening of civil institutions can serve as
an illustration of this principle’s implementation. For example, Volkswagen supports numerous cultural
programs. In particular, in 2000 this company announced a competition for a grant to study the history of
a local community. Representatives of Azerbaijan also participated. The World Bank has supported
programs aimed at introduction of civil studies at Azerbaijan’s secondary schools. There are many other
examples of corporate support in such areas.
Competitors - codes require to abstain from unfair competition and prevent formation of monopolies in
In recent years many codes also cover another important problem, namely, the attitude of a company
A multi-national Chiquita Banana company states in its code that the company has invested $20 million
special training on environmental protection for their employees. This activity has resulted in a different
Our Standards and Values, Publication by Merck Corporation
restore depleting forestation.
protect the environment, including water, air and land utilization. The company’s policy aims at strict
implementation of the latest decrees of relevant federal, national and local regulatory agencies.
biased assistance to political processes. Any allocation of funds with a purpose of political influence can
be made only with permission of management. Of course, a company’s employees are entitled to take part
in political life as individuals, but they are prohibited to use their work time, property or finances of their
company for personal political involvement.
Entertainment and gifts policy. Codes draw a strict line between an acceptable limit of entertainment and
gifts and define what shall be qualified as a bribe. For example, BP internal regulations require that any
gift or service accepted by a staff member be recorded in a special register. Management subsequently
must make a decision with respect to such a gift or service. Every region has its own provisions,
regulating procedures of gift giving and taking.
Many companies also set a gift cost limit, which can
members. Most companies prohibit simultaneous employment with another employer in the same sector
of industry. However, exception for research and teaching industries can be made.
Confidential information. Codes set forth notion of confidentiality. This issue is discussed in more detail
in Chapter II.
interests, even if this principle contradicts personal interests of some of its employees. When does a
conflict of interest emerge? As a rule, a conflict of interest occurs when company employees are involved
in some external relations that may affect their business decisions or have the potential to do so. Chapter
II discusses conflicts of interest and ways to eliminate them in more detail. Codes shall contain clear
instructions for employees, enabling them to avoid conflicts of interest and, in case of emergence of such
conflicts, to successfully solve ethical dilemmas.
Codes may include any provisions regulating relations with employees, customers, partners, investors,
force. For example, Statoil internal ethical regulation states that “Local procedures will be detailed on the
company's disciplinary actions and their compliance with local law and regulations.”
Sample business ethics code for Azerbaijan companies is offered in Appendix 1, while Appendices 3
Communication on ethical violations. Whistleblower.
It shall be recognized that communication of ethics violations can be regarded as unethical in itself. Here
we see a clear sample of a contradiction between universal and local ethics, discussed in Chapter I.
In Azerbaijan, any kind of complaining is viewed as “sneaking” or, at the very best, looking for trouble.
truth”. There are many reasons behind such an approach, one of them being the “do not be conspicuous”
principle, originating from the Soviet mentality and absence of deep democratic traditions.
CHIQUITA BRANDS INTERNATIONAL, INC. Corporate Responsibility Report
Sequa Corporation Code of Business Conduct
Ethical Conduct Section, Business Policies, June, 2000, BP