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What is the point of a Code of Ethics?

What is the point of a Code of Ethics?

Companies are coming under ever greater scrutiny and control and are, consequently, increasingly obliged to ensure regulatory compliance and scrupulous behaviour in all their processes: prevention of occupational risks, environmental measures, prevention of money laundering, eradication of corruption among individuals and with public administrations, data protection, etc. All these requirements lead to a growing need for criminal risk prevention.

Indeed, Article 31 bis of Spain’s Criminal Code extends liability for certain offences to the company in which they are committed (and, consequently, to its administrator or Board of Directors), if the latter has not taken all the measures within its power to prevent them from occurring. Larger companies have long since taken measures in this regard by adopting a Crime Prevention Manual, but what about smaller companies: are they exempt from this obligation?

Nothing could be further from the truth. Every single company, each at its own level and with rules suited to its activities, specific characteristics and risks, must at some point adopt a Crime Prevention Manual.

But let’s start at the beginning: this Manual must be implemented and respected. It cannot be a mere a dead letter, because then it is useless: so, the company must have good governance rules in the form of a Code of Ethics to provide solid foundations and to make it clear that it is aware of the need for proper, correct behaviour in its business activities.

Companies are finding that implementation of such rules is increasingly becoming a prerequisite for doing business with others. And they must do so in a clear, transparent and visible way, because there is also a growing awareness amongst consumers of these issues, meaning they are gradually becoming willing to pay more if companies share ethical values, if they are socially responsible, if they have policies in favour of the environment…

A Code of Ethics thus generates business value, both because of the impact it has in spreading this philosophy and because the market will end up demanding it (many companies have already implemented, in their Codes of Ethics, a requirement not to work with others that do not possess one). Many investors even place particular value on the fact that the companies in which they invest have an unequivocally ethical business philosophy, so that their products or services reflect the values of fair trade and a world of solidarity and sustainability.

We are convinced that this not only has an impact on a company’s legal standing, with stronger controls that prevent irregularities and surprises, but also on its reputation and future prospects. Therefore, over the course of this past summer, BDabogados has been hard at work marshalling and distilling its guiding principles into what is now our Code of Ethics, which brings together the principles that guide our professional activities. It is now available on our website, to be consulted by anyone who so wishes and observed by all our firm’s professionals.

We trust that it will for many years continue to guide us in ensuring a job well done—one of our defining features.

Juan Núñez – BDabogados

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