9. Code of conduct and responsible practices and the committee of ethics

For the purposes of reaffirming the core values and principles which drive Inditex’s activity and adapting the risks control system to the social and regulatory environment, the Code of Conduct and Responsible Practices of the Inditex Group’s (which replaces both the Internal Guidelines for Responsible Practices of the Inditex Group’s Personnel and the Code of Conduct) was approved by the Board of Directors in 2012, which also adapted the “Code of Conduct for Manufacturers and Suppliers” (previously named Code of Conduct for Manufacturers and External Workshops). Additionally, the Board of Directors approved the Manual of Criminal Risks Prevention and the Procedure of the Whistle Blowing Channel.

All employees of Inditex, manufacturers, suppliers or third parties with any direct relationship and a lawful business or professional interest, regardless of their tier or geographic or functional location may report to the Committee of Ethics through this Whistle Blowing Channel any breach of Inditex’s conduct and regulatory compliance policies which affect the Group, and which arise from any employees, manufacturers, suppliers or third parties with whom the Group has any direct employment, business or professional relationship, by means of a report made in good faith.

In the course of fiscal year 2013, the Committee of Ethics has processed 60 dossiers, 55 of them after receipt of a notice or report and the other 5 ex-officio.

The main reasons at the basis of the notices received are the report of conducts by employees or third parties which might be in breach of the commitments or ethical values addressed in the Code of Conduct and Responsible Practices or the Code of Conduct for Manufacturers and Suppliers, and clearing up doubts on certain issues regarding the enforcement of the Code of Conduct for Manufacturers and Suppliers. All reports received have been duly processed and resolved by the Committee of Ethics.

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 the Group and its stakeholders (employees, clients, 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, inter alia, that according to which 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 the Inditex Group shall be treated in a fair and honourable manner and that according to which, all the activities of the Group shall be carried out in the manner that most respects the environment, promoting biodiversity preservation and sustainable management of natural resources.

The Committee of Ethics

For the purposes of ensuring compliance with the Code of Conduct and Responsible Practices and with the Code of Conduct for Manufacturers and Suppliers, Inditex relies on a Committee of Ethics made up of the General Counsel and Code Compliance Offices, who chairs it, 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 the Group’s s personnel.
  • To receive any manner of written instruments with regard to the enforcement of the 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, and at least, an annual report to review its enforcement.
  • To supervise the Whistle Blowing Channel and compliance with the Procedure.

In the performance of its duties, the Committee of Ethics shall ensure:

  • 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 (twice during FY2013) 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 Corporate Compliance policy of the group from time to time in force.

The Committee of Ethics may act of its own motion or at the behest of any of Inditex employees, manufacturer, supplier or any third party involved in a direct relationship and with a lawful commercial or professional interest, further to a report made in good faith.

Decisions of the Committee of Ethics are binding for the company and for the employees.