Code of Ethics

Learning Outcomes

  • Discuss the importance of a company’s code of ethics

Before we can understand why a code of ethics is important, we need to first understand what a code of ethics is. In school, you probably had to sign a student code of conduct. In these documents, rules and regulations for your behavior were outlined. The school created this document to make sure their students knew exactly how they were expected to behave. Similar to a student code of conduct, businesses have a code of ethics they use to help guide the behavior of their employees. While not every company is required by law to have one, a code of ethics has become an expectation by today’s standards. Since a code of ethics is such an extremely helpful tool for an organization, it makes sense for all companies to create one, regardless of legal obligations.

A code of ethics should include a company’s mission, values, and principles. A code of ethics allows a company to connect these important components to clear professional expectations and standards. It is a framework from which the entire company should operate and should reference on a daily basis. A code of ethics also gives actionable ways to measure performance. The clear guidelines and values included in a company’s code of ethics can be used to help promote and educate employees. While a code of ethics is a great internal guide for a company, it is also an important external declaration. Externally, a code of ethics informs the public of the company’s values and goals. It is a way for outsiders to learn about a company and hold it accountable to its promises.

So how do you implement a code of ethics within an organization? There are many answers to this question. The exact way in which to apply a code of ethics may differ greatly from company to company; however, there are a few key trends. First, the code of ethics needs to be delivered to all employees in some way. It can be an electronic copy or a hard copy, depending on preference. A company should give time for all employees to review the code of ethics and ask any questions they may have. Training is the next step to ensuring proper implementation of a code of ethics. We will discuss the training portion in more depth in the next section. After training is held, every employee that received the training and a copy of the code of ethics should sign the document to verify their understanding and commitment.

The last step in implementing a code of ethics is the reinforcement of the code. After employees have been trained and signed the code of ethics, they are now under obligation to abide by the code. It is the responsibility of everyone in the company to enforce the code of ethics. If you observe unethical conduct, it is your responsibility to report it immediately. It then becomes the responsibility of the management and human resources teams to handle ethics violations according to company policies.

PRactice Question

Let’s move onto the next section where we will further explore the importance of training to ensure ethical behavior.

References

Employment, Small Business and Training. “Implementing a Code of Conduct.” Business Queensland. January 02, 2019. Accessed April 12, 2019. https://www.business.qld.gov.au/running-business/employing/taking-on-staff/staff-code-conduct/implementing.

“Why Have a Code of Conduct.” Ethics & Compliance Initiative. Accessed April 12, 2019. https://www.ethics.org/resources/free-toolkit/code-of-conduct/.

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