Code of Ethics / Conduct

What It Is

A code of ethics, also known as a code of conduct, clarifies “an organization’s mission, values, and principles, linking them with standards of professional conduct.”[1] A code of conduct serves as a reference for managers and employees when making decisions at work.

 

Why It Matters

A code of ethics can help your organization to:

    1. Show customers that it values integrity.
    2. Define the terms of ethical behavior at work.
    3. Guide decision-making in difficult situations.


After the scandals that occurred at Enron and WorldCom, American consumers have become more concerned with business ethics. According to Business Ethics: Ethical Decision Making and Cases, the prevailing attitude among consumers is that American businesses care more about profits than workers, consumers, or the environment.[2]

Michael Connor, editor and publisher of Business Ethicsstates, “The reality these days is that [a business without] a code of ethics subjects itself to a much greater risk in its day-to-day operations. If there is an unfortunate incident, they expose themselves to much greater risk [of legal trouble].”[3]

 

Getting Started 

When writing a code of ethics for your organization:

    • Step One: Consider your organization’s mission, values, and goals, including its position on sustainability.
    • Step Two: Use clear language to make the code user friendly.
    • Step Three: Include expectations for general conduct at work, as well as examples of unethical behavior.


According to David Blood, Senior Partner at Generation Investment Management, “Sustainable solutions will be the primary driver of industrial and economic development in the coming decades.”[4] As such, incorporating sustainability into your company’s code of ethics can help your company grow.

You should tailor the code of ethics to your organization.  However, some of these examples and suggestions can help you get started.

    1. Sample Code of Ethics
    2. Sample Values
    3. Creating a Company Code of Ethics
    4. How to Write a Code of Ethics


Going Further

When creating a code of ethics, some companies may wish to consult an ethicist or an human resource specialist.[5] These people can help ensure that the code of ethics meets the needs of the company, its staff, and is attentive to its customer base. A manager may also consider appointing someone to enforce the code of ethics. This person, perhaps a human resource specialist or just a trustworthy employee, can help ensure that the staff upholds your organization’s values and principles. Appointing such a person will also help incorporate ethics into your company’s culture.

 

Best Practices

In his article “Put it in writing: Your business has ethics,” Jeff Wuorio sums up the best practices for creating a code of ethics:

    • Focus on your specific business practices and issues. 
    • Tailor it to fit your business. Include employees in developing a code of ethics.
    • Provide practical training in what ethical behavior means in your workplace. Post your code of ethics internally and set up a reporting system. 
    • Consider appointing a compliance person, that is, someone to enforce the code of ethics.
    • Follow up on any ethical violation you uncover.
    • Live it from the top down. Make sure management follows the code of ethics.[6]


Resources for More Information

Business Ethics: Ethical Decision Making and Cases The Good, The Bad, and Your Business by Odies C. Ferrell, Linda Ferrell, and John Fraedrich

The Right Thing: Conscience, Profit, and Personal Responsibility in Today’s Business by Jeffrey L. Seglin

Center for the Study of Ethics in the Professions

Business Ethics

Ethics Resource Center Tool Kit

 

Conclusion

A code of ethics communicates and supports your organization’s values to customers and staff. It can help guide decision-making and reassure customers of your organization’s integrity.

 

Glossary of Related Terms

Ethicist: A person who specializes in the study of ethics, or who is devoted to ethical principles.

 

[1] “Ethics Glossary,” Ethics Resource Center, 29 May 2009, accessed 28 June 2013, http://www.ethics.org/resource/ethics-glossary.

[2] Odies C. Ferrell, et al., Business Ethics: Ethical Decision Making and Cases (Boston, MA: Houghton Mifflin Company, 2008), 5. Available in part at: http://books.google.com/books?id=f3jg2jhqfC8C&lpg=PP1&pg=PP1#v=onepage&q&f=false

[3] Josh Spiro, “How to Write a Code of Ethics for Business,” Inc., 24 February 2010, accessed 28 June 2013, http://www.inc.com/guides/how-to-write-a-code-of-ethics.html.

[4] Andrea Moffat, et al., The 21st Century Corporation: The Ceres Roadmap for Sustainability (2010): 3. Available in full at: http://www.ceres.org/resources/reports/ceres-roadmap-to-sustainability-2010

[5] Josh Spiro, “How to Write a Code of Ethics for Business,” Inc., 24 February 2010, accessed 28 June 2013, http://www.inc.com/guides/how-to-write-a-code-of-ethics.html.

[6] Jeff Wuorio, “Put it in writing: Your business has ethics,” Microsoft Business for Small & Midsize Companies, accessed 28 June 2013, http://www.microsoft.com/business/en-us/resources/management/leadership-training/put-it-in-writing-your-business-has-ethics.aspx?fbid=TUdA2rouGVh#PutitinwritingYourbusinesshasethics.

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