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.” A written document, it 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
- Show customers that it values integrity
- Teach employees the value of ethical behavior at work
- Guide decision-making in difficult situations
After scandals like 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.
Michael Connor, editor and publisher of Business Ethics, states,
“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].”
When writing a code of ethics for your organization
1. Consider your organization’s mission, values, and goals including its position on sustainability
2. Use clear language to make the code user friendly
3. 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.”
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:
When creating a code of ethics, some companies, particularly those with more than 20 employees, may wish to consult an ethicist (See Glossary) or human resource specialist. These people can help ensure that the code of ethics meets the needs of the company as well as its staff. 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.
In his article for Microsoft Business for Small to Mid-sized Companies, Jeff Wuorio sums up the best practices for creating a code of ethics:
- Focus on business practices and specific issues
- Tailor it to fit your business Include employees in developing a code of ethics
- Train your people to be ethical Post your code of ethics internally and set up a reporting system
- Consider appointing a compliance person (i.e., someone to enforce the code of ethics)
- Follow up on any ethical violation you uncover Live it from the top down (i.e., make sure management follows the code of ethics too)
Resources for More Information
Business Ethics, an online magazine
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 or writes on ethics, or is devoted to ethical principles
 Information retrieved from the Ethics Resource Center
 Information retrieved from Business Ethics: Ethical Decision Making and Cases by O.C. Farrell, John Fraedrich, and Linda Farrell
 Quote retrieved from “How to Write a Code of Ethics for Business” by Josh Spiro
 Quote retrieved from The 21st Century Corporation: The Ceres Roadmap for Sustainability
 Information retrieved from “How to Write a Code of Ethics for Business” by Josh Spiro
 List retrieved from Microsoft Business for Small and Midsize Companies
 All terms retrieved from dictionary.com