Companies turn to certification statements to enforce codes of ethics

Companies are increasingly using certification statements to ensure staff comply with their codes of ethics, and also as a governance tool, research by the Institute of Business Ethics (IBE) has shown.

And the majority of the 17 FTSE100 companies studied also require employees to sign a certification statement every year and/or each time the code is revised.

Exactly who is required to sign a statement varies. Of the companies studied, employees are required to sign in 71% of the companies studied, with managers (82%) and senior managers (94%) also required to do so.

Some companies even go so far as to require on-site contractors, temporary workers and third parties to sign.

Where a company’s code of ethics has been violated, around half of the companies surveyed said that the signed statement may be used in any disciplinary action.

According to the IBE, certification statements can help demonstrate the importance of a company’s code of ethics and its commitment to live up to the values it contains.

In some cases, certification forms part of a wider ethical assurance process. For instance, one company uses certification data to set key performance indicators for the business, with the results from individual business units reported to the board’s corporate responsibility and audit committees. In other cases, the data may be reported in a company non-financial or annual report or ethics website.

Certification data can also form a useful part of a company’s compliance, training and risk management procedures, and may form part of ‘adequate procedures’ under the UK Bribery Act.

The IBE said: “Companies have introduced code certification statements as an element of a company-wide cultural change programme. Requiring an employee to sign the code as part of their employment contract is one way to mitigate integrity risk and indicates a serious corporate commitment to ethical standards.”