The main mechanisms for the implementation of codes of corporate ethics in the activities of multinational corporations

Abstract

The corporate code of ethics of a transnational corporation establishes a global standard for business ethics, serving as a corporation’s “calling card” and a self-regulatory mechanism that enhances the corporate identity. The reputational aspect of corporate codes of ethics aims to demonstrate the transparency of the corporation in the relevant industry market, thereby fostering a certain level of trust from of external stakeholders. This article addresses fundamental issues concerning the legal nature of corporate codes ethics. It analyses the main mechanisms and methods of implementing these codes in the daily business activities of corporations. Specifically, the following issues are examined: the position and role of codes within the framework of local regulatory acts, employees’ adherence to codes within the scope of labor discipline, incentivizing counterparties to adhere not only to contract terms but also to the code norms and incorporation of corporate codes of ethic into the compliance system. Throughout the exploration of these topics, the authors address the key challenges and trends in the adoption, application and adherence to corporate codes of ethics by corporations. The paper provides critical analysis of the role of corporate codes of ethics in regulating labor and contractual relations involving corporations, as well as within the compliance system. The research methodology is based on formal logic, comparative legal, dialectical, and system-structural methods.