CONDUCT: ISSUES AND CODE

CONDUCT
General behaviour expressed in actions, reactions, or inactions of an entity.
The manner in which a person behaves, especially on a particular occasion or
in a particular context. The action or manner of managing an activity or
organization.
GOOD CONDUCT
Good conduct in corporate governance means that the management,
particularly those in the internal management, should act with integrity and
impartiality.

They should be honest and diligent, avoid conflicts of interest, treat people
with respect, act lawfully and show leadership.

CONDUCT ISSUES
Unacceptable actions and behaviour due to violations of the rules and
regulations, laws, policies and ethics within an organization resulting to
disruption of the work environment.
Unlike performance issues, which result from a failure to meet goals and/or properly
perform tasks, such as when an individual lacks the knowledge, skills or ability to
perform the job, or where the work is consistently below standards in terms of
quality or productivity, behavioral or conduct-related issues generally result in
disruption to the work environment.
MISCONDUCT VS SERIOUS MISCONDUCT
Misconduct can be at two different levels: misconduct and serious
misconduct.
Minor misconduct is seen as unacceptable but is not a criminal offense
Serious misconduct is labelled serious because it can have the effect of
destroying or undermining the relationship of trust and confidence between
an employee and employer. Without this trust and confidence an employment
relationship cant continue.
TYPES OF MISCONDUCT

Excessive tardiness and absences

Off-site Misconduct
Sexual Harassment
Violence
Negligence
Internet misuse
Minor instances of failing to follow an employers reasonable and lawful
instruction

Minor breaches of the employment agreement e.g inappropriate clothing

Bullying
Behaviour that endangers the health and safety of the employee or others
Use of illegal drugs at work
Misuse of Position
Conflict of Interest
Accessing Confidential Information
Theft and Dishonesty
Rudeness and Abusive Language

IMPACTS IN THE ORGANIZATION

Production
Job Satisfaction
Physical and Psychological Well-being

CAUSES OF CONDUCT ISSUES

1. Behavioural factors

Lack of sensitivity
Lack of awareness
Legitimate rationalization
Rationalization based on company loyalty
2. External and organizational influences

Financial or performance incentives

Pressure from management or a peer
Weak controls
Remote or inadequate supervision

SOLUTIONS FOR CONDUCT ISSUES

Improvement of employee engagement

Reinforcement of consequences
Organizational leaders should lead by example
Establish disciplinary procedures
Implement rules and regulations awareness
Checks and Balances
Hire for Values
Show Employee Appreciation

It is important not to dismiss someone merely because they have been charged
with or convicted of a criminal offence. It is essential to investigate what action is
justified and consider whether it affects the employee's suitability to continue
working. Normal disciplinary procedure should be used wherever possible, and

appropriate, fair and reasonable disciplinary action should be taken even if the
outcome of the prosecution is pending.
Depending upon the severity and persistency of the misconduct, the employee's
previous record and any contractual stipulations or limitations, several potential
disciplinary options present themselves:
The matter could be dropped with no further action.
A further written warning (or a final written warning) could be issued.
Training or counselling could be provided to help resolve the matter.
Any bonuses could be withheld, as a form of fine.
The employee could be demoted or transferred to another job.
The employee could be suspended without pay (uncommon as both parties
are inconvenienced).
The most severe penalty is dismissal. Normally this should only be done if
clear warnings have previously been issued, having made it clear to the
employee that lack of improvement in conduct or performance would result in
dismissal.
In instances of gross misconduct it may be possible to dismiss immediately
without giving notice or pay in lieu of notice. However, it would be advisable only to
summarily dismiss employees if potential examples of gross misconduct leading to
dismissal are included in the Contract of Employment.
CODE OF CONDUCT
1.
A tool of corporate governance.
2.
Encompasses a wide variety of subjects
3.
An expression of the corporate culture
4.
One of the tools by which companies can demonstrate their commitment to
responsible
5.
It clarifies to stakeholders inside and outside the company the criteria that
guide decisions
6.
It is designed to build strong loyalty to the company among employees.
7.
It contributes to create: cohesive and aligned behaviour.
8.
It helps to contain internal conflicts by fostering favourable attitudes and
consensus towards the company.
CODE OF CONDUCT VS. CODE OF ETHICS

CODE OF CONDUCT: STRUCTURE

The code is therefore structured in two sections:

1. a preamble containing a codes description and the corporate principles- It

provides a definition of the code of conduct illustrating the mission and the values
underpinning it.
It then lists the stakeholders with whom the company interacts and defines their
expectations and corporate responsibilities, as well as the companys fiduciary
duties in relation to them.
2. a section with the rules and the standards of behaviour- The second part outlines
the rules of conduct.Usually expressed by prohibitions, by recommendations to
avoid incorrect behavior, or simply by listing the standards
CODE OF CONDUCT: CONTENT

Employees
Stockholders
Customers
Competitors
State and Local Community

ENSURING EFFECTIVINESS OF THE CONDUCT

1. Must be a sincere expression of the will of top management and must entail the
participation of top executives and of the Board of Directors as well as of
employees.
2. Values must be communicated with a clear, simple language that is direct and
comprehensible to everyone.
3. A formal method of dissemination that can highlight its value is advisable.
4. The code must be publicized inside and outside the company.
5. Involvement of personnel who need constant ethical training.
6. Creation of a control structure and a system that can establish the correct
sanction for any illegal deed.

CONCLUSION
Good conduct among the internal and external stakeholders is essential in making
sure the healthy growth and development of an organization. This can be promoted
through the Code of Conduct which spells out standards and disciplinary procedures
to solve conduct issues.