LEGALISTIC AND COMMITMENT-ORIENTED

CORPORATE CODES OF ETHICS

A CORPUS BASED ANALYSIS

WH-QUESTIONS

• WHAT?

• WHO?

• WHERE?

• WHEN?

• WHY?

WHO: CODE ADOPTERS

• first corporate codes appeared more then a century ago

• 70% of the codes in the US were created after the year

1990 (Guillén et al. 2002)

• Europe lagged behind the U.S. in 80s /‘90s (Kaptein/Wempe

1998)

• Today 100% code adopters in US, UK and Europe, not in

Asia (Cho-Kwai 2015)

WHERE: WEBSITE SECTIONS

• Corporate Governance

• CSR (Corporate Social Responsibility)

• Other (“Who we are” / “About us”)

formalizing behavioural standards (Weaver, 1993)

WHEN

2018 8/17

2017 1/17

2016 2/17

2015 2/17

No date 3/17

WHY: REASONS FOR CODE ADOPTION

Morally driven reasons Managerial strategy

(es. Stevens 2009)

linguistic analysis to unveil authors’ intentions

Morally driven reasonsManagerial strategy

(ex. Stevens 2009)

RELEVANT LITERATURE -1

Codes investigated mostly by researchers of non-linguistic

disciplines:

- business ethics (ex.Stevens 2007, Scott 2002)

- socio-psychology (ex. Fairfax 2007)

- organizational studies (ex. Brown/Ainsworth/Grant 2012)

- management studies (ex. Gillespie et al., 2012)

RELEVANT LITERATURE -2

• Content analysis (ex. Krippendorff 2013)

Other approaches:

• perception of code users (Schwarts 2004)

• physical appearance: length, visuals, format

• code quality (Erwin 2011)

led the way for language-focused research…

PURPOSE AND METHODOLOGY

• CDA to help explain the role of managerial discourse in

the construction of one of companies’ intangible asset

corporate identity

+ automatic computer query to confirm HYPs

RESEARCH QUESTIONS

RQ ❶

Can we identify distinctive traits of legalistic approach and

commitment-oriented approach at macro-textual level?

RQ ❷

Are the two approaches industry-related?

CORPUS

• 17 codes from FTSE 100 constituents

• 9 non-financial sectors (mining, media, food, tobacco, beverages,

pharmaceuticals, aerospace & defense, oil & gas, personal goods)

• 150,000 word tokens

• 8,481 word types

LEGALISTIC VS. COMMITMENT TRAITS

LEGALISTIC (examples)

• Macro-textual level: lists, definitions, attempt at extreme

precision

• Syntatic and lexical level: nominalization, overuse of shall,

manierism, formal words and expressions.

COMMITMENT-ORIENTED (examples)

• Macro-textual level: visuals, comprehension aids, quotations,

ad hoc titles

• Syntatic and lexical level: ex. metaphors, emphasis

LEGALISTIC TRAIT:LISTS

( F RO M A S T R A ZE NE C A C O D E 2 0 1 8 )

LEGALISTIC TRAIT:DEFINITIONS

( F RO M B U R B E R RY C O D E )

“Business Associates” refers to any individual, entity, business, company,

partnership or any other body or group associated with Burberry including,

without limitation, any such individual, entity, business, company, partnership or

any other body or group supplying products, goods, raw materials, components,

services, real estate or anything else, directly or indirectly, to any member of the

Burberry Group or otherwise working directly or indirectly with or on behalf of

any member of the Burberry Group. This also includes any person (an “Indirect

Supplier”) providing products, goods, raw materials, components, services or

anything else to (i) a direct supplier of Burberry or any other member of the

Burberry Group or (ii) any other Indirect Supplier.

(Burberry, Ethical Trading Code of Conduct, p. 1)

LEGALISTIC TRAIT:ATTEMPT AT EXTREME PRECISION

( F RO M A N TO N FAG A S TA C O D E 2 0 1 6 )

LEGALISTIC TRAIT:NOMINALIZATION

( F RO M A N TO N FAG A S TA C O D E 2 0 1 6 )

LEGALISTIC TRAIT:OVERUSE OF «SHALL»

( F RO M B U R B E R RY C O D E )

LEGALISTIC TRAIT:FORMAL WORDS AND EXPRESSIONS

( F RO M A N TO N FAG A S TA C O D E 2 0 1 6 )

COMMITMENT TRAIT: VISUALS( E X A M P L E S )

COMMITMENT TRAIT:COMPREHENSION AIDS

( E X A M P L E S )

COMMITMENT TRAIT:AD HOC TITLES

( E X A M P L E S )

• “Living Our Values and Expectations. Our Code of Conduct” (GLAXO)

• “Our Group Policies: Enabling us to be at our best” (ROLLS-ROYCE 2018)

• “Our Code of Conduct, Our Values in Action” (ANGLO AMERICAN 2018)

• “Stronger, Better Together. Our Code of Conduct” (IMPERIAL BRAND 2016)

• “Integrity, the Essential Ingredient. Code of Business

Conduct”(COCACOLA 2018)

COMMITMENT TRAIT:METAPHORS

( F RO M C O C AC O L A C O D E 2 0 1 8 )

PRELIMINARY FINDINGS

• Distinctive traits of legalistic and commitment-oriented

approaches at

- macro-textual level

- lexical level

• Corpus: 3 out of 17 «pure» legalistic codes

in line with previous research (i.e. financial industry)

Company Name CocaCola Diageo Antofagasta Anglo American

Tesco AstraZeneca Glaxo BAE Systems

Rolls-Royce

INDUSTRY BEVERAGES BEVERAGES MINING MINING FOOD PHARMA PHARMA AEROSPACE&DEFENCE

AEROSPACE&DEFENCE

1. Website section

Corporate Governance

Corporate Governance

Corporate Governance

/ About us Sustainability / Our company Sustainability

2. Ad Hoc Title Integrity. Th essential ingredient.

Our Code. Code of business conduct

No Our Code of Conduct, our values in action

Our code of business conduct

AstraZeneca Code of Ethics Values, behaviours and Policies

Living our values and expectations. Our code of conduct

Code of conduct - Doing the right thin

Our group policies: Enabling us to be at our best

3. N° page 41 48 26 36 32 6 25 66 35

4. CEO’s message No

Yes Yes Yes Yes No Yes Yes Sort of Intro,

no picture

5. Pictures Yes Yes

No

Yes (drawings) Yes No Yes Yes No

6. Explanatory note No

No No No No No No No No

7. Comprehension aids (ex. questions and answers)

Yes (ex. flags, navigation bar)

Yes (Q/A) No Yes (always/never)

Yes (Q/A) No Yes (keywords to search for)

Q/A Navigation bar+ Short version

8. (Pseudo)quotations Yes No No No No No No No No

9. Dedicated code for top management

No Yes

No No No No No No No

10. Date of update 2018

2015 2016 (2018 for

new employees) 2018 2018 2018 No 2018 2018

Company Name BP Shell Informa Pearson Unilever Burberry BAT Imperial

Brands

INDUSTRY OIL & GAS OIL & GAS MEDIA MEDIA PERSONAL GOODS

PERSONAL GOODS

TOBACCO TOBACCO

1. Website section

Who we are About us

Sustainablity / Who we are CSR Corporate Governance

Corporate Governance

2. Ad Hoc Title Our Code. Our responsibility

Our code of conduct. Making the right decision

Our code of conduct

No Code of business principles and code policies

Burberry ethical trading code of conduct

Standards of Business Conduct 2018

Stronger, better together. How you do it. Our code of conduct.

3. N° page 26 44 19 23 43 7 27 40

4. CEO’s message Yes

Yes Yes Yes Yes No Yes Yes

5. Pictures No Yes Yes Yes Yes No Yes Yes

6. Explanatory note No

No No No No No No No

7. Comprehension aids (ex. questions and answers)

Yes Yes Yes (bullet points)

Yes (Q/A) Yes (bullet points)

No Yes (who to talk to)

Yes (Q/A, dos/don’ts)

8. (Pseudo)quotations No No No No No No No No

9. Dedicated code for top management

No Yes

No No No No Yes No

10. Date of update No

2015

2017 2018 2016 No 2018 2016

SHELL CODE FOR EXECUTIVES(RETR IEVED MARCH 2019 )

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).

• All of the above are hereinafter referred to as "COE Addressees".

SHELL CODE FOR EXECUTIVES(RETR IEVED MARCH 2018 )

Key requirements

Each COE Addressee shall:

• a. act in accordance with the highest standards of honesty, integrity and fairness and expect the same in their relationships with others while maintaining a work and business climate fostering such standards; and

• b. adhere to the SGBP, any applicable code of conduct on dealing in securities and any provisions for the avoidance of conflicts of interest stipulated in applicable terms and conditions of employment; and

• c. excuse himself from making any decision about an issue at hand in which a conflict of interests arises or could arise and in such event, disclose in writing the relevant facts and explain the circumstances that create or could create the conflicts of interest to: (a) the chairman of the Audit Committee in the case of: (i) the Executive Directors of Royal Dutch Shell, (ii) the Chief Financial Officer, (iii) the Chief Internal Auditor and (iv) the Executive Vice President Controller, and (b) to the Executive Vice President Controller, in the case of any other COE Addressee; and

• d. avoid having any financial interest in works of or contracts awarded by a Shell company or a company associated with a Shell company, or in supplies effected or services rendered to or by such a company and where this is unavoidable or immediate family members have such a financial interest, such interest shall be disclosed in writing in the same manner as set out in c. above; and

• e. not seek or accept from third parties to his own advantage any favour in whatsoever form or howsoever described in connection with the business of any Shell company or his duties (except for the acceptance of such things as gifts of nominal value and working lunches, dinners and entertainment of reasonable value, frequency and duration, appropriate under the circumstances, and subject always to the standards of a. above); and

• f. not hold positions or jobs or engage in outside businesses or other interests that adversely impact the performance of duties owed to any Shell company or the interests of the same; and

• g. avoid any relationship with a contractor or supplier that could compromise the ability to transact business on a professional, impartial and competitive basis or influence decisions to be made by any Shell company; and

• h. consistent with the scope of his job responsibilities, ensure full, fair, accurate, timely, and understandable disclosure in regulatory filings and in other public communications made by Royal Dutch Shell.

CODES FOR EXECUTIVES

• Distinctive traits of legalistic approach:

- Lists

- Definitions

- Attempt to extreme precision

- Overuse of «shall»

- Nominalization

- No pictures

- No CEO’s message

- No comprehension aids (ex. Q/A, graphs, check lists)

- Lenght (short)