New Code of Conduct and Responsible Practices. Committee of Ethics

For the purposes of reasserting the values and guidelines which drive Inditex’s business, and adapting the risks control system to the social environment, the new “Code of Conduct and Responsible Practices” (which supersedes both the former Code of Conduct and the Internal Guidelines for Responsible Practices) was approved by the Board of Directors on 17 July 2012, and the “Code of Conduct for Manufacturers and Suppliers”, formerly known as the “Code of Conduct for External Manufacturers and Workshops”, was adapted. Additionally, the Manual on Criminal Risks Prevention and the Whistle Blowing Channel Procedure were also approved by the Board of Directors.

The Code of Conduct and Responsible Practices

The Code of Conduct and Responsible Practices provides the action lines which must be followed by the Group in the performance of its professional duties. Its goal consists of exacting an ethical and responsible professional conduct from Inditex and its entire workforce in the conduct of their business anywhere in the world, as a gist of its corporate culture upon which the training and the personal and professional career of its employees is based. For such purposes, the principles and values which shall govern the relationship between Inditex and its stakeholders (employees, customers, shareholders, business partners, suppliers and the societies where its business model is implemented) are defined.

The Code of Conduct and Responsible Practices is based upon a number of general principles, among which the following ones may be underscored: the operations of the Inditex Group shall be developed under an ethical and responsible perspective; all persons, whether natural or legal, who maintain, directly or indirectly, any kind of professional, economic, social or industrial relationships with Inditex shall be treated in a fair and honorable manner and all the activities of Inditex shall be carried out in the manner that most respects the environment, promoting biodiversity preservation and sustainable management of natural resources.

The Committe of Ethics

In order to ensure compliance with the Code of Conduct and Responsible Practices, there is a Committee of Ethics, composed of the General Counsel and Code Compliance Officer, who chairs such Committee, the Human Resources Director, the Corporate Social Responsibility Director and the Internal Audit Director.

The Committee of Ethics reports to the Board of Directors through the Audit and Control Committee and has the following duties:

  • To supervise compliance with the Code and the internal circulation thereof to Inditex’s personnel.
  • To receive any manner of written instruments with regard to the enforcement of this Code and to send them, where appropriate, to the relevant body or department which may be responsible for dealing with and settling such instrument
  • To monitor and supervise the management and settlement of any file.
  • To solve any doubts which may arise, regarding the enforcement of the Code.
  • To propose to the Board of Directors, after report from the Audit and Control Committee, any explanation or implementation rule which the enforcement of the Code may require.
  • To supervise the Whistle Blowing Channel and compliance with the Procedure.

In the performance of its duties, the Committee of Ethics ensures:

  • The confidentiality of all the information and background and of the acts and deeds performed, unless the disclosure of information is required by law or judicial order.
  • The thorough review of any information or document that originated its action.
  • The commencement of such proceedings that adjust to the circumstances, where it shall always act with independence and full respect of the right of the affected person to be heard as well as of the presumption of innocence.
  • The indemnity of any employee as a result of bringing complaints in good faith to the Committee
  • The Committee of Ethics submits a report twice a year to the Audit and Control Committee reviewing its proceedings and the enforcement of the Code of Conduct and Responsible Practices.

Additionally, the Audit and Control Committee reports to the Board of Directors, on an annual basis as well as whenever this latter so requires, on the enforcement of the Code of Conduct and Responsible Practices and of the additional documents which comprise the regulatory compliance policy of the group from time to time in force.

All employees of Inditex, manufacturers, suppliers or third parties with any direct relationship with the company and a lawful business or professional interest, may, regardless of their tier or geographic or functional location, report to the Committee of Ethics through this Whistle Blowing Channel any breaches of the Code of Conduct and Responsible Practices or of the Code of Conduct for Manufacturers and Suppliers that they may be aware of, which affect Inditex, and which arise from any other employees, manufacturers, suppliers or third parties with whom Inditex has any direct employment, business or professional relationship, through a report made in good faith.

During fiscal year 2012, the number of notices and reports received by the Committee of Ethics has increased. An aggregate number of 27 notices were given, 22 of which were received after the entry into force of the new Code of Conduct and of the Whistle Blowing Channel Procedure. Additionally, the Committee of Ethics has reviewed ex-officio one case without a prior report. The main grounds addressed in the notices were complaints about behavior of employees or of third parties in breach of the commitments or ethical values addressed in the Code of Conduct and Responsible Practices and raising questions about certain issues regarding its enforcement. All reports received have been duly processed and settled by the Committee of Ethics.

Decisions of the Committee of Ethics shall be binding for the company and for the employees.