What should be included in a code of ethics?

Whether you have a team of two or two thousand employees, a Code of Ethics is imperative to maintaining a professional and productive work environment. A company’s Code of Ethics is most effective when it clearly communicates company values and when measures are in place to hold employees accountable.

We asked 10 industry experts for their insights on what companies should include in their Code of Ethics as we enter 2021 and how they can hold their employees accountable for carrying out their values. This is what they said:

Paul French, Founding Director of Intrinsic Search has found that an effective Code of Ethics is one that provides a gateway to the company’s culture.

“As a value-based tool, the Code of Ethics should espouse those key values that bring employees together, it should offer employees the guidance and support they need to solve ethical dilemmas in the workplace.

“A code that is centered on the organizational culture also ensures that critical processes such as talent sourcing and acquisition are guided by ethical principles and that hiring decisions take into consideration the cultural and ethical fitness of an individual. This way, a company will have a workforce that is committed to ethical conduct and compliance.

“I believe well-planned and regular training on organizational culture, ethics and compliance can set employees up for success.”

• Strict Measures Against Discrimination

It’s no secret that discrimination and harassment should not be tolerated in the workplace. David Meltzer, CEO of East Insurance Group, provides his insights.

“The one thing that companies should have in their Code of Ethics is a regulation against prejudice, racism, and harassment. These acts seem to be prevalent in today’s world. Racism and prejudice against minorities are still rampant, and it only brings disharmony in the workplace.

“As the manager or employer, you should uphold strict penalties and sanctions, should these acts be committed. At this point, a zero-tolerance policy is necessary. This way, you also make sure that your employees are held accountable for their actions.”

• Personal Hygiene and Cleanliness

Tony Monisse, Director of Brentnalls WA, discusses the importance of reinforcing personal hygiene and cleanliness in the workplace. Not only does this create a healthier environment, but it also shows respect towards coworkers.

“Now more than ever, personal hygiene and cleanliness are extremely important. As the COVID-19 pandemic has unfolded over the past year, ensuring hygiene and cleanliness is imperative and should be mandatory for all employees. There is a possibility that the pandemic will come to an end in 2021, but this practice should be continued forever.

“As employees are the actual face of the company, they should be accountable for carrying out the image of their organization wherever they go. By setting a good example, they will be followed by fellow team members.”

Michael Hammelburger, CEO of The Bottom Line Group, explains the importance of holding employees accountable to your Code of Ethics.

“Having the Code of Ethics explicitly state that it applies from entry-level employees to top executives is something that should be emphasized. Top management needs to be role models when it comes to adherence so each employee in the lower ranks can view them as leaders who live up to their actions based on the Code of Ethics.

“The lack of integrity will definitely put everything in the company at stake. If regular training on the Code of Ethics is given, they can be reminded that they are accountable for every action they make.”

Kia Roberts, Principal and Founder of Triangle Investigations discusses the significance of accountability in more detail.

“The most crucial component within a thorough Code of Ethics is not necessarily an explanation of what is prohibited conduct, but a clear explanation of accountability mechanisms that are triggered when the Code of Ethics is violated by employees. Within many companies, there is a huge gap between what is outlined as unacceptable conduct and what actually happens when employees engage in that unacceptable conduct.

“Employers can hold their employees accountable for carrying out company values by consistently taking appropriate corrective action when employees violate the Code of Ethics. This can include such corrective measures as mandatory trainings, written warnings, suspension, coaching, and all the way up to termination.

“Forward-thinking employers should take the time to create a robust and detailed Code of Ethics, educate employees on the Code of Ethics, and create a quick-moving and thorough process for addressing violations of the Code of Ethics.”

Mary Alice Pizana, Human Resources Manager at Herrman and Herrman PLLC believes that rewarding employees for carrying out their organizational values is a great way to hold them accountable.

“While holding team members accountable for breaking the Code of Ethics is essential to upholding a healthy company culture, rewarding team members for strengthening and empowering the company culture is great for instilling an excellent company culture following the Code of Ethics. Rewarding team members who uphold the Code of Ethics by recognizing their work accomplishments and behavioural habits.”

• Commitment to Environmental Sustainability

Mark Coster, Owner and Chief Editor of STEM Toy Expert believes that companies should uphold a commitment to green values.

“A 21st-century workplace can’t stand up to the environmental challenges if all employees don’t promote sustainability. Since the pandemic has taught us all that working from home is possible, there’s not a single reason why we shouldn’t keep up with this practice post-COVID, at least on certain days of the week. It will certainly help us reduce the carbon footprint!”

Tom Winter, CRO and Co-founder of DevSkiller further expresses the importance of committing to environmental sustainability.

“Whether it's banning single-use coffee cups from the office or committing to go entirely paperless, in 2021 every company should consider the environment an utmost priority. Millennial and Gen Z consumers that account for a large chunk of the market prefer to spend their money on products made by companies that embrace similar social attitudes as themselves. Therefore, it's crucial to address environmental sustainability in your workplace code of conduct as a mentality to be embraced by employees company-wide.”

Oliver Baker, Co-founder of Intelivita explains how several companies fail to carry out the efforts in social justice towards their customers.

“Many companies claim that social justice is included in their company’s Code of Ethics. However, most of them fail to execute it in the field, especially those businesses that are in the customer service industry. Customers, regardless of their status, have the right to fair service. To ensure that this ethic could be observed at all times by the workforce, I suggest that companies should observe stricter rules and provide sanctions for those who would be proven to disregard this ethic.”

Most employees are trusted with confidential information, whether it’s data surrounding a client, a customer or organizational data. Lucas Robinson, CMO of Crediful believes that your Code of Ethics should include strict measures around sensitive data.

“Your Code of Ethics should always include that all data needs to be protected and not shared outside of the company. Any data can be sensitive, and in the wrong hands could be dangerous to the survival of the company, especially in these trying times of the pandemic. When everyone is safe with their own information and data, the entire company is safer too. Using technology and cloud services to keep data safe is very important, but also just using your common sense as to where data is stored can help a lot too.”

WhistleBlower Security Inc. helps keep businesses and employees accountable for carrying out a company's values and obeying the Code of Conduct. Our confidential and anonymous ethics reporting platform IntegrityCounts allows employees to report any instances of professional misconduct or inappropriate behaviour without fear of retaliation. Contact us today to learn more!

A code of ethics, also referred to as an ethical code or statement of ethical principles, is a document that sets forth the expectations, standards of practice, and principles of conduct for a business or organization. This type of policy statement can essentially form a type of legislation if it details clear penalties for employees or members who violate the code. Absent these sanctions, the code of ethics serves more like a list of expected duties.

A code of ethics goes beyond the limitations of the law and specifies many activities not prohibited by law that are nonetheless prohibited within the specified group. Ethical behavior is more complex than legal behavior. For example, it is unethical to be dishonest, but it is not illegal to lie except under certain circumstances. Business ethics demand a higher standard of behavior.

The History of the Code of Ethics

Business ethics first became a specialty in the 1960s, spurred by the social responsibility movement. The social responsibility movement states that individuals should act in a way that benefits society as a whole rather than simply protecting one's own personal interests. In the 1980s, many governments and corporations began to set forth formalized codes of behavior.

Here is an analysis of 150 of these corporate codes of ethics completed in 1989. This found five key elements that were similar among many of them. These codes of ethics addressed:

• The proper treatment of employees
• How to handle whistleblowers
• Guidelines for inter-employee relationships
• Regulations regarding employees' political contributions and actions
• Instructions for preventing bribery and handling conflicts of interest

Codes of ethics gained greater importance in 2002, when the Sarbanes-Oxley Act ("SOX") was passed, requiring that any corporation trading stock under the provisions of the Securities Exchange Act of 1934 publish their code of ethics if one exists. This creates a strong incentive for corporations to draft a code of ethics as it helps to increase investor confidence.

How a Code of Ethics is Published

A code of ethics must be a published document, but it can take many forms. The code of ethics might exist in several forms within a single organization with each document tailored to a specific department, such as finance or sales. In some companies, employees are required to sign a document verifying that they have read the code of ethics. This requirement may apply to all employees or only to corporate officers.

The code of ethics may stand alone , or you might find it accompanied by the organization's mission statement, corporate values, and other policies. As mentioned previously, the code of ethics must be available to the public if the corporation trades its stock publicly and is regulated by the Securities and Exchange Commission (SEC).

In addition to the code of ethics produced by an individual organization, you will also find codes of ethics which apply to entire industries, such as:

• The National Society of Professional Engineers (NSPE) Code of Ethics for Engineers
• The Institute of Internal Auditors (IIA) Code of Ethics
• The Code of Ethics for the Nutrition and Dietetic Registration Board
• Association for Institutional Research (AIR) Statement of Ethical Principles
• The Code of Ethics and Standards of Practice of the National Association of REALTORS

Leverage our network of lawyers, request free bids, and find the right lawyer for the job.

What's Included in a Code of Ethics?

A code of ethics includes both internal guidelines for ethical behavior and an outward statement of commitments and values as well as guidelines that an individual's behavior can be measured against. The code of ethics should include:

• Introduction: This preamble makes a clear statement about the company's values and commitment to supplying and enforcing an ethical code for conduct. This may appear as a message from the CEO.
• Statement of Company Values: This details the company's mission statement, financial objectives, social aspirations, and professional goals. Here, the organization may refer to other professional standards or standard-setting bodies that it follows, such as the American Medical Association (AMA)'s Code of Medical Ethics, which applies to physicians and dental practitioners.
• Rules of Conduct: This is the bulk of your code of ethics, outlining all of the rules that employees are expected to follow. It may discuss topics such as:
  • Compliance with industry regulations
  • Regulations for disclosure and privacy
  • Truth in advertising
  • Moral values, such as respect, responsibility, fairness, kindness, and trustworthiness
  • Involvement and interactions with the community
  • Discrimination policies
  • Handling of interpersonal relations
  • Rules regarding conflicts of interest
• Implementation and Sanctions: This section details how the code of ethics is enforced and what consequences will occur if the code is violated. This will specify:
  • Guidelines for reporting a violation of the code of ethics
  • Consequences for code violations
  • Handling of employee termination or litigation
• Additional Resources: The code of ethics should conclude with compliance resources that refer to laws, policies, and procedures relevant to this code. You should also provide contact information for your department of ethics or human resource department. These resources will make it easier for employees to understand the code in depth.

How to Implement a Code of Ethics

Image via Unsplash by sctgrhm

A code of ethics is a beneficial document for nearly any type of business that will serve the company well alongside other essential contracts . When drafting a code of ethics, it's important to carefully consider the company's values, goals, and potential challenges. The code of ethics can mitigate many problems by setting forth clear rules and guidelines that employees review upon hiring.

To develop a code of ethics, you should:

1. Collaborate with leaders throughout the organization. Set forth clear objectives, values, and regulations that are easily agreed upon.
2. Review laws and regulations in your industry. Ensure that your code of ethics adheres to all the latest regulatory developments in your area of business.
3. Simplify the language. Avoid legal jargon, so the code of ethics is easily understandable for employees, investors, clients, partners, and anyone else interested in your company.

Here is an article with some common provisions to consider for your code. Once a code of ethics has been reviewed, edited, and approved, it's ready for implementation. This code is only effective when it's disseminated properly throughout the organization. To do this, you must:

1. Have the code of ethics endorsed by the Chairman and CEO.
2. Circulate the code throughout the company and have employees review and sign as needed.
3. Integrate the code into daily business operations.
4. Implement procedures for managers and other leaders to review the code with employees regularly.
5. Set forth a schedule for corporate management to review and update the code routinely.
6. Detail the process of enforcing the code.
7. Train all leaders involved in enforcement in the proper way to uphold the code and implement consequences.

The Value of a Code of Ethics

A well-written code of ethics will:

• Provide legislation for the actions of individuals within the organization
• Provide a public statement of values which serves as a form of marketing
• Mitigate risk by outlining the consequences of ethical misconduct
• Establish benchmarks for personal and professional evaluation
• Promote quality standards of practice

A code of ethics is an important document for any well-established business. Drafting and implementing this code early on will help solidify the company's values and morals. Consider having a contract lawyer review your code of ethics prior to publication to ensure that it is clear and easily enforceable.

Page 2

How It Works

1. Provide details on your needs.
2. Get bids to compare.
3. Hire and get started.