{"id":777,"date":"2021-01-02T06:54:21","date_gmt":"2021-01-02T05:54:21","guid":{"rendered":"http:\/\/wordpress.p574366.webspaceconfig.de\/?p=777"},"modified":"2026-01-28T11:07:20","modified_gmt":"2026-01-28T10:07:20","slug":"legal-challenges-in-the-introduction-of-codes-of-conduct-part-1-of-2","status":"publish","type":"post","link":"https:\/\/senator-partners.de\/en\/blog\/rechtliche-herausforderungen-bei-der-einfuehrung-von-verhaltenscodizes-teil-1-2\/","title":{"rendered":"Legal challenges in the introduction of codes of conduct (Part 1)"},"content":{"rendered":"

Legal requirements must be taken into account when developing and implementing codes of conduct.<\/strong><\/p>\n\n\n\n

1.         <\/strong>Introduction<\/strong><\/p>\n\n\n\n

As companies expand into developing and emerging markets, considerations regarding corporate social responsibility are becoming increasingly important. In many host countries, companies are frequently confronted with unfamiliar realities: foreign cultural norms, legal uncertainty, volatile political conditions, unpredictable administrative bodies, or indeed irresponsible treatment of the environment, corruption and the violation of internationally recognised labour standards and human rights. <\/p>\n\n\n\n

The company must actively engage with these framework conditions, as it is expected to uphold the high standards of responsible business practices customary in its home country within its sphere of influence (suppliers, employees, locations, etc.) as well as in the countries where it sources, manufactures and exports goods, to apply the same high standards of responsible business practices that are customary in its home country.<\/p>\n\n\n\n

A well-established tool for preventing potential adverse effects caused by stakeholders within a company\u2019s sphere of influence is the so-called Code of Conduct. Through a bespoke Code of Conduct, a company sets out specific guidelines for action to ensure compliance with its core ethical and moral obligations. This tool has both a regulatory component (for suppliers) and a communicative component (for stakeholders) and, when developed in a practical manner and implemented credibly, can make a significant contribution to the company\u2019s credibility.<\/p>\n\n\n\n

2.         <\/strong>Reasons for introducing codes of conduct<\/strong><\/p>\n\n\n\n

On the one hand, the reasons for introducing a Code of Conduct lie in the aforementioned risks, which stem from the internationalisation of companies and increasing globalisation. On the other hand, these reasons arise from regulatory requirements such as the US Sarbanes-Oxley Act. This Act requires listed companies in the US to ensure that misconduct in the areas of accounting, banking and white-collar crime \u2013 which covers a broad spectrum of potential offences \u2013 is detected and rectified as quickly as possible. German companies are subject to the obligations of the Sarbanes-Oxley Act if their parent company is listed on a stock exchange in the US.<\/p>\n\n\n\n

The measures required to comply with the provisions of the Sarbanes-Oxley Act are implemented within companies in the form of codes of conduct. Specific guidelines on conduct are intended to reduce or minimise companies\u2019 liability risks.<\/p>\n\n\n\n

In Germany, there is a growing trend for companies \u2013 even those that are not themselves listed on the stock exchange or do not have a listed parent company \u2013 to commit to introducing codes of conduct or setting up reporting systems for breaches of the rules. There are a wide variety of reasons for this form of voluntary commitment \u2013 ranging from planning an initial public offering to the realisation that a code of conduct is a modern instrument of \u201ecorporate governance\u201c that stakeholders expect.<\/p>\n\n\n\n

3.         <\/strong>Objectives and content of codes of conduct<\/strong><\/p>\n\n\n\n

Whilst the objectives of codes of conduct are largely similar, their content can vary considerably from one company to another.<\/p>\n\n\n\n

The primary objective \u2013 although often formulated in very different ways \u2013 is to minimise liability risks by setting out specific rules of conduct. These generally relate both to different organisational units (e.g. sales, human resources, etc.) and to different processes. In a sense, the company \u201eshifts\u201c the risks arising from misconduct onto the individuals concerned, thereby availing itself of a means of exculpation. The fact that this is only of a relative nature is ultimately demonstrated by the fact that, in the media, it is usually the company and not the individual employee who is pilloried \u2013 with the exception of members of the executive board or senior management.<\/p>\n\n\n\n

The content, on the other hand, generally varies considerably: some companies limit themselves to briefly and concisely requiring their employees to comply with applicable laws and internal guidelines and to report any breaches. In most companies, however, it can be observed that the Code of Conduct contains a large number of specific, situation-specific rules of conduct which, taken together, go far beyond what is required by the Sarbanes-Oxley Act. Here are a few examples:<\/p>\n\n\n\n