The Advantages of a Code of Ethics in Organizations

Having a sound code of ethics for your business or organization isn’t simply a
good idea from a moral perspective. It also helps you build trust and credibility
among your stakeholders, and enhances your overall brand.

Good Ethics Helps Sales: Regardless of what you sell, you’re in business to make
money. Probably the top advantage to having and adhering to a code of ethics,
then, is that good ethics matter to your customers. Consumers are more likely to
purchase and stay loyal to companies they feel they can trust. That’s why you
should create and promote an ethical organization. And it helps to have those
ethical principles codified for everyone in and outside of your company to see and
understand.

Everyone adheres to the Same Rules: Isn’t it great when everyone knows what’s
expected of them? From the very top of the company, people sitting in the
executive suite, to the lowest member of the team, when your organization has a
written code of ethics, everyone can work from the same playbook. That goes for
contractors and consultants, as well. A code of ethics supports your overall mission
and helps define who you are as a company.

Tech giant Apple has clearly defined principles of ethical behavior based on
honesty, respect, confidentiality and compliance. The company promises to
conduct “business ethically, honestly, and in full compliance with applicable laws
and regulations.” Its written code of ethics means that not only do all Apple
employees and affiliates need to behave in a certain manner - external stakeholders
expect it.

Speaking Truth to Power: When you have documented rules of behavior, your
employees will be more willing to report any ethical sidesteps to you or your HR
department. You want to hear news—even if it’s bad—so you can fix problems
before someone does long-lasting harm to your organization. Harvey Weinstein’s
alleged bad behavior went unchecked for years, but ultimately led to his downfall
and what has had a dramatic and negative impact on the company he co-founded
with his brother: Miramax.
Affirming Social Responsibility: In the best scenario, the good you do as an
organization with sound ethical principles can resonate beyond just sales and
profits and bottom-line results. When you lead by good example, others may
follow suit. So when you declare that part of your ethical code of conduct is to give
back to the community, you could set the wheels in motion for many others to do
the same. Wow!

Accountability and Recourse: What happens when your best-of-intentions code

of ethics is ignored? There are consequences. Having written documentation about
the behavior expectations of people within your organization means that when they
don’t measure up, you get to dismiss them for cause. It means when a fellow
employee feels the rules are not being followed, he or she has legal recourse to
redress grievances. Putting it in writing makes it real.