Nudging tools in the code of ethics of International companies | Нургали Абылайхан Нуржигитулы. Работа №220981

Nudging tools in the code of ethics of International companies

A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. Therefore, a professional accountant’s* responsibility is not exclusively to satisfy the needs of an individual client or employer. In acting in the public interest a professional accountant should observe and comply with the ethical requirements of this Code.

Processional accountants not only have a private interest of their client to fulfill but also, a public interest. In search of doing things better than established by law. Accountants need special training and a license. They study for years to get the knowledge needed for this job, they get to know the market and the tools. It is a permanent job although now many accountants work as freelancers. Exists a community of colleagues, other accountants who for example established this code of ethics. Do they need a vocation? Somehow. What should rather be mentioned would be some competencies or better said predispositions. Which characteristic is the most important in this case? It’s specific service to society – accountants deal with money and we, as citizens, trust them, they are known (and are supposed to) understand the rules of accountancy an average person is not even aware of but needs to get salary for example or to run a their own business.Among external functions of professional codes of ethics we find “to express the main social concerns regarding the profession”. In this case it would be the risk of corruption. Accountants are supposed to be honest people and people of principles. The opposite to integrity is corruption. As mentions, since accountants have knowledge an average person does not they are the only ones who behind the numbers could f.ex. hide some money. They could also make their own profit in secret doing tax fraud. The problem is that the accountants work both with big numbers and with details. They pay attention more to the things we overlook. This is why in the professional code they would be reminded the principles they should work in accordance with. Among internal functions of professional codes of ethics we find: “ to convey the culture of the professional community”. The code is drafted for individuals but it should be respected by big companies. The code makes those individuals build their professional brand, their behavior will later on not only be seen as a person’s act but as a member of accountants’ community act. It changes the perception of responsibility, it raises the sense of belonging and having and fulfilling a mission.

I have selected the codes of ethics of 2 of “supermajor” companies in the oil and gas industry. These are: Total S.A. (from France) and Royal Dutch Shell (from The Netherlands)

Name of Companies

Total S.A. [1], [2]

Royal Dutch Shell [3],[4]

Industry

Total is a major energy player, which produces and markets fuels, natural gas and low-carbon electricity.

An international energy company with expertise in the exploration, production, refining and marketing of oil and natural gas, and the manufacturing and marketing of chemicals.

Scope

International Company from France

Present in more than 130 countries

104,460 employees

€121.9 billion market capitalization on Euronext Paris

$26.1 billion debt adjusted cash flow (DACF)

Revenue: 209.363 billion

Income: 17.767 billion

International Company

From The Netherlands:

70+ countries we operate in

82,000 employees on average

71 million tonnes of LNG sold during the year

21 refineries we have interests in

3.7 million barrels of oil equivalent we produce per day

Revenue: $388.4 billion

Income: $23.9 billion

Capital investment: $24.8 billion

Investment in research and development: $986 million

Inclusion of Vision/credo/code

To become the Responsible Energy Major means providing energy that is affordable, reliable and clean. Energy is a vital, constantly changing resource that has accompanied major shifts in society throughout time. And energy must continue to adapt if it is to play a key role in addressing the complex challenges facing the world today. We want to contribute to these changes because energy is Total’s history: its past, its present and its future. Providing energy that is affordable, reliable and clean.

Shell's purpose is to power progress together with more and cleaner energy solutions. We believe that rising standards of living for a growing global population are likely to continue to drive demand for energy, including oil and gas, for years to come. At the same time, technology changes and the need to tackle climate change means there is a transition underway to a lower-carbon, multisource energy system.

Values: adherence to international declarations or systems

Our ethical commitment is based on three core values:

Respect, the source of sustainable, trust-based operations and relations;

Responsibility toward others and in our jobs;

Exemplary behavior, which underpins the internal and external credibility of our actions and initiatives.

These corporate values and principles are inspired by internationally recognized documents:

The principles of the Universal Declaration of Human Rights.

The key conventions of the International Labour Organization.

The OECD Guidelines for Multinational Enterprises.

The principles of the United Nations Global Compact.

Shell’s core values are honesty, integrity and respect for people. The Shell General Business Principles, Code of Conduct, and Code of Ethics help everyone at Shell act in line with these values and comply with relevant laws and regulations. We also strive to maintain a diverse and inclusive culture within our company.

Referred stakeholders

Internal stekholders: employees

External stakeholders: host countries, local communities, customers, suppliers and contractors, business partners, and shareholders

This Code is specifically intended to meet the requirements of Section 406 of the Sarbanes Oxley Act and the listing requirements of the New York Stock Exchange by providing for a number of implementing requirements in the area of disclosure controls and the avoidance of conflicts of interest by the category of job holders and persons. Also, in Code mentioned that Global documents and employee( including managerial staff) are main stakeholders.

CSR measures

CSR measures for suppliers etc.

With regard to suppliers and contractors, we work in the interests of each party, in accordance with clear, fairly negotiated contract terms. This relationship is based on three cornerstones: dialogue, professionalism and meeting commitments.

We choose suppliers that can conduct their business responsibly.

Our commitment to business integrity requires that each of us play an active role in ensuring exemplary conduct by everyone. To meet our standards for business integrity both within Total and in our business relationships, we need to combat all forms of corruption, reject fraudulent practices, avoid and report conflicts of interest, comply with antitrust law and fulfill our commitments. Those requirements are set out in our Fundamental Principles of Purchasing. For more information, including examples of the actions we take, see our Business Integrity Guide and our directive on the Fundamental Principles of Purchasing

In the Code of Conduct of Shell in the paragraph ‘Our Behavior, People and Culture’ they mentioned this point:

Contracting and procurement. We seek to work with contractors and suppliers who contribute to sustainable development and are economically, environmentally and socially responsible.

Also, in part about Data privacy they mentioned about:

At Shell, we respect the privacy rights of our staff, customers, suppliers and business partners. We are committed to managing personal data in a professional, lawful and ethical way.

Additional in part about Risk management and third parties they mentioned It is important to do the right thing – and to be seen to do it. For this reason, we discourage our staff from accepting gifts and hospitality (G&H) from business partners, or offering G&H to them, especially those you would not be comfortable telling your manager, colleagues, family or the public that you had offered or accepted. In particular, you should never allow G&H, either offered or received, to influence business decisions or give other people a reason to suspect there might be an influence. We encourage you to make Shell’s policy on G&H known to our agents and business partners, including governments and Government Officials.

Ethical behavior of employees

These values give rise to a number of principles that must guide their conduct and show ethical behavior of employees:

Respect for people.

Concern with health, safety and environmental protection.

Fighting corruption and fraud.

Upholding human rights.

Respect for free competition.

Promotion of financial transparency.

Below mentioned points are main in corporate ethical behavior of Shells employees

Understand the risks in their role and how to manage them.

Seek advice when things are not clear.

Promptly complete the ethics and compliance training assigned to them.

They make sure that any third party contractors, agents or consultants work with are aware that they are bound by Code and that they should act accordingly.

Speak up. It is they duty to report any suspected violations of the Code.

Also 3 Golden Rules are really important in corporate life of Company:

(i) Comply with the law, standards and procedures

(ii) Intervene in unsafe or non-compliant situations

(iii) Respect our neighbours.

Employee commitment and corporate culture

Ethical behavior of employees;

Respect for Each Other: central to our collective principles;

To ensure we exhibit exemplary behavior as a Group in all of our host countries, we need to be able to count on the integrity of each of our stakeholders.

We are especially concerned to prevent insider trading, and we prohibit the use of privileged and confidential information to buy or sell shares or other securities in a publicly traded company.

Shell’s Corporate culture Conduct says: We want Shell to be a great place to work, and we want to protect our reputation among customers, suppliers, governments and communities as a company that always strives to do the right thing. To do that, we need everyone doing business on behalf of Shell to live up to our core values of honesty, integrity and respect for people.

This section of our Code of Conduct sets out the standards of good behaviour that we expect from you – and that you have the right to expect from your colleagues.

Remember – if you know or suspect someone is violating the Code, please speak up. To respect the human rights of our employees and to provide them with good and safe working conditions, and competitive terms and conditions of employment. To promote the development and best use of the talents of our employees; to create an inclusive work environment where every employee has an equal opportunity to develop his or her skills and talents. To encourage the involvement of employees in the planning and direction of their work; to provide them with channels to report concerns. We recognize that commercial success depends on the full commitment of all employees.

Oversight body

Chairman and Chief Executive Officer

Lead Independent Director

Director representing employee shareholders

Director representing employees

This Code is applicable to the following job holders and persons:

the Executive Directors of Royal Dutch Shell, which includes the Chief Financial Officer;

the Executive Vice President – Controller;

the Executive Vice President – Treasury and Corporate Finance;

the Chief Internal Auditor;

the Executive Vice President - Taxation;

the Executive Vice President - Investor Relations;

the Executive Vice President - Finance – Trading and Supply;

the Executive Vice President - Finance Operations;

the Executive Vice President - Finance of Integrated Gas;

the Executive Vice President - Finance of Upstream;

the Executive Vice President - Finance of Downstream;

Chief Financial Officer of Shell Midstream Partnership;

Chief Executive Officer of Shell Midstream Partnership; and

any person or job holder designated by the Chief Financial Officer (a register of such designated persons will be maintained by the Company Secretary).

Ethics channel

We ensure that all of our stakeholders understand, receive and apply our ethics policy through assessments and independent ethics audits. These audits enhance the consistency of our commitment to compliance and corporate social responsibility and help us continuously improve our policies and procedures by identifying best practices.

We work with several external organizations, including:

Good Corporation

The Danish Institute for Human Rights and the Human Rights Compliance Assessment (HRCA)

CDA Collaborative Learning Projects

The Shift Project

Shell is actively engaged in promoting ethical business behavior through its membership and support of the following organizations:

Conclusion

Ethical codes are adopted by organizations to assist members in understanding the difference between right and wrong and in applying that understanding to their decisions. An ethical code generally implies documents at three levels: codes of business ethics, codes of conduct for employees, and codes of professional practice. In before analyzed 2 international codes which belongs to Total and Shell we have noticed that mainly part of Ethical Codes are directed to CSR and in updated version of aforementioned codes they have add points to growth Sustainable Development Goals. Ethical codes are often adopted by management, not to promote a particular moral theory, but rather because they are seen as pragmatic necessities for running an organization in a complex society in which moral concepts play an important part. Generally ethical codes are helping to both companies to be more social responsible and to make right decisions. In case of Total S.A. they shows energy as a vital part of our life and it is right, also they mentioned in their Code of Conduct, that they have to make it affordable, reliable and clean which can obtain half of the goals of Sustainable Development. Their main values are regards to main ideas of CSR and ethics, about respect the source and make it sustainable, about responsibility and exemplarily behavior for shareholders and stakeholders. In other hand in core and value of Shell they didn’t pay obvious attention for affordable energy, but they are mentioning point about rising standard of life and how to make it more clean and environment friendly. They mentioned about predictable demand for energy and indicated power progress as one of the main objectives of company. Main ideas and goals coming from respect for people, integrity and honesty. Worth noticed that both companies paid a lot attention and mention dozens time aspects about Human rights, about employees right and how to speak up in violence to conduct situation which is matching with F. J. Calvo`s goals with Ethical Codes.

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