GOOD GOVERNANCE AND CODE OF ETHICS

The learners shall be able to:

1. Explain the basic concepts and elements of good governance;
2. Appraise the importance of ethics, values and morals in governance;
3. Asses the different individual and social influences on ethics behavior;
4. Write policies on ethical practices in a code of ethics; and
5. Creates a code of conduct based on given characteristic.

Governance describes the overall management approach through which senior executives
direct and control the entire organization, using a combination of management information and
hierarchical management control structures. Governance activities ensure that critical
management information reaching the executive team is sufficiently complete, accurate timely
to enable appropriate management decision making, and provide the control mechanism to
ensure that strategies, directions and instructions from management are carried out
systematically and effectively.
Good governance is an ideal concept which is difficult to achieve in its totally. Governance
typically involves goodhearted people who bring their ideas, experiences and other human
strengths and shortcomings to the policy-making table. Good governance is achieved through
continues discussion so that all of the considerations involved in assuring that stakeholder’
interests are addressed and reflected in policy initiatives.
CONCEPTS OF GOOD GOVERNACE
The concept of good governance has become a buzzword around the world in recent
times. Currently the term governance has become synonymous to sound development
management. In the mid-1980s, the term governance only emphasizes on strict adherence to
the rule of law. After the fall of the Soviet Union and the conclusion of the cold war, governance
as a word has been used to mean the reinventing of public administration, mostly on those
developing counties that are open to the needs of globalization.
The concept of “governance” is an ancient as governance itself. Both governance and
government are came from the French word “gouvernance” which mean that act or manner of
government. The government word later in the mid-16 th century meant “system by which
something is governed’. In the 18 th century after, it come to develop the meaning as a
“governing authority”. However, gradually by the 19 th century, the word “governance” was
considered an outdate word that was hardly used as a political term.
 Yet, during 1980s under economic reforms particularly with the advent of globalization,
governance again became a very popular word. This time the focus is on the process and the
style of governing towards the idea of sustainable development.
Organizations such as International Monetary Fund (IMF), Non-governing Organization
(NGOs), the United Nation (UN) and its agencies as well as world bank and others international
institution started to use the word “governance” in a lot of ways. The term “ good governance”
then became a catchword of policy and governmental improvement particularly in developing
countries which rely most of their supports from he mentioned international development
agencies.
Basically, good governance in its generic approach is the efficient, transparent and
equitable delivery of goods and services as well as the policy-making by means of excising
authority. Good governance is a normative principle that offers well-managed all-allocated
resources to provide the needs to the collective problems of people.
It is good governance that is required of a democratic plat form to avoid corruption,
offers rights, the ways and the capability to create decisions that touch the life of every
individual and make every organization accountable for what they have decided to do.
Good governance is a principle denotes an approach in administration that could be
applied in internal operations of both public and private sector organizations. Here, the
decision-making strategies of organizations incorporate the principle of good governance so
that shareholders’ and stakeholders’ interests are accounted and assured.
Basic Elements of Good Governance
Mainly, good governance is a way of systematic governing established in justice and
peace with the intention of safeguarding rights and freedom of every member of the society.
The assurance of minimized corruptions, the accounted views of the minorities and the protect
rights of the most vulnerable in society are all considered in good governance. Here are the
basic element of good governance to understand its concept more:
Rule of Law
Good governance requires the rule of law. Rule of law is the protection of human rights
and civil liberties particularly those of minorities by the independent, unbiased and principled
law enforcement agencies. It is exemplified by autonomous judiciary workers such as the
lawyers and judges, good legal framework, equal access to justice, incorruptible police and
tested dispute mechanism among others.
In the context of rule of law, the absence of governance in a country may give rise to
political instability and widespread corruption that could have severe consequences on the
investment climate. Businesses in particularly are affected by such bad governance. Biased rule
and unethical practices in the public sector means added costs of doing business and new
business entrants as well as construct-bidders are discourage to provide fair and healthy
competition. In the corporate world, members of the board should be fair and impartial in their
collaborations and in their decision-making in practice of the rule of law. Good corporate
governance entails boards to perform their duties responsibility ethically, honestly and with the
highest integrity.
Transparency
Good governance requires transparency of the decision-making process to make certain
that information is easily and freely obtainable to those who will affected by such decisions as
well as the outcomes resulting by the decisions taken. This information should be provided in
an accurate and easy understandable forms normally interpreted through the media so that
readers get a complete view of the issues. In addition, any decision taken and their
implementation must be in obedience with recognized rules and regulations.
In the business sector, transparency can earn a level of trust in winning over
shareholders, employees and the general public. Transparency means making everyone aware
of what is going on throughout the organization at all times. Applying transparency in the
workplace offers a lot of advantages including speedy problem solving, healthy employer-
employee relation, enhance teamwork and trust leading to better productivity.
Records and processes are transparent and available to shareholders and stakeholders in
the practice of good governance. There must be neither inflation nor exaggeration in reporting
the financial health of the company. Financial records and finding should be reported to
shareholders and stakeholders in an understandable and easily interpreted manner.
Revealing salaries of employees throughout the organization is a transparency practice
that show a level of fairness which could reduce employee frustration and boost their morale.
Letting employees know the determinants of their pay structure will make them understand
more about compensation differences in the company.
These days, a lot of companies have taken the advantage to boost transparency at the
workplace. They have replace complex hierarchies and adopted holacracy as a replacement of
cubicles, there are open floor spaces that house executives, managers as well as employees.
Responsiveness
Responsiveness a requirement in good governance. Responsiveness simply means that
organization and theirs processes need to be planned that serve the best interest of all
stakeholders with in a practical and realistic period of time.
Responsiveness is the combination of two inseparable elements which are value and
speed. Value is any information in the form of questions, data, insights, research, context, case
study and so on that a company can offer, and that allow its buyer in moving closer to making a
decision. Speed, apparently, is the time it takes to give the demanded information to a
customer.
Sometime the corporate world is faced with numerous crises and controversies and
become unconscious of time. In the practice of good governance, company must always find
time to better communicate to shareholders and stakeholders within in a sensible time period
to provide honest answers to these crises and controversies in order to provide direction of the
organization.
Responsiveness is very critical in the workplace and the lack of it may cost real money.
A delayed response may leave valuable resources idled without direction on how to move
forward. In business, even spam e-mail, unsolicited phone call or direct mail item received
should be provided response especially when the person is known, and the inquiry is
reasonable.
Consensus Oriented
Good governance requires knowing the broad consensus about the basic interest of the
entire stakeholders group and this can be achieved in a practical way. Reaching this consensus
means seeking the many different needs, perspectives and expectation of a diverse of people.
Making decision through consensus manner allows a group to produce a solution greater than
any one member could reach one. The consensus process necessitates commitment and
patience, but the resulting decisions are better, more effective and, on the long term, more
time efficient.
A consensus decision depends on the assumption that every individuals input is
valuable and significant to the final solution. Occasionally, it may be challenging to attain shared
understanding, but valuing each and every input is vital to the decision-making process. With all
the opposing viewpoints and different personalities in the company, assisting group decision
making is easier said than done. Inside the boardroom a lot or robust discussion and debates
happens which is normally expected. Most of the times, these intense and heated debates
would generate the best consensus because of varying perspectives from diverse
representatives of broad backgrounds and experiences.
Equity and Inclusiveness
Equity and inclusiveness is based on the idea that all members of an organization or
society must feel the sense of belongingness and must not have the impression of being
excluded from the typical group. Those individuals and groups that are most vulnerable must
also feel the same and should have opportunities to improve or maintain their well-being.
Inclusivity means individual are expected to be treated with respect, dignity, and
kindness. Each member of an organization can and should use their voice to share their
experiences, opinions and philosophies to enrich and extend discussions. No one should feel
that they do not belong or feels that their opinions have less significance compared to others.
Employees feel being included when they experience both:
1. A sense of uniqueness that they are acknowledged and appreciated for their specific
attributes and contributions.
2. A sense of belonging that they are received and treasured as member of their
workgroups and among their coworkers.

Employees on the other hand, experience of exclusion when the feel:

1. Degraded, dismissed, or discounted for the exceptional qualities they bring to the
company.
2. Treated like outsiders because of their differences such gender, race/ethnicity,
nationality, age, religion, sexual orientation, and, in some case, job role or formal
position of power.
Effectiveness and Efficiency
Effectiveness and efficiency is a vital in good governance. It is developed by making
sustainable use of resources to create advantageous results to meet the needs of its
stakeholders. Sustainability means guaranteeing social investments are carried through and
protecting natural environment, human and ecological health for future generations while
driving innovation and not compromising people’s way of life.
Everyone in the organization from the lowest ones to top management including the
board of directors must be responsible in conducting their duties affectively and efficiently.
Material resources and time are the concerns of effectiveness and efficiency. Majority of
companies also reflect the effect on the environment on their operations as they accomplish
their duties and responsibilities. A very good example of effectiveness and efficiency is the
trend of automation. Automation is the shift from manual paper processes to software
solutions.
Accountability
Accountability is a key requisite of good governance. Institutions such as government
agencies, civil society, and the private sector ought to be accountable to one another as well as
to the public and to their institutional stakeholders. Who is accountable for whatever decisions
or actions should be documented in policy statements. Generally, an organization is
accountable to those who will be affected by its decisions or action whether they are internal or
external to an organization. Accountability also extends to the application rules of law which
could be violated in the course of the implementation of the decisions or actions.
Accountability cannot be enforced without transparency too.
 Accountable is a key governance best practice in many other aspects of business and social
life. The accountability of the boards of directors for instance, extends to the groups and
individuals such as the shareholders, stakeholders, vendors, employees and the general public
who may be affected by their decisions and actions.
Participation
Participation in good governance requires equal participation by all groups with
everyone having a role in the process of decision-making, either directly or through legitimate
representatives. In participation everyone must be informed and organized. It consists of the
freedom of association and expression. In general, it needs attentive concern for the best
interests of the organization and society especially for those most weak and helpless.
Good governance these days gives emphasis on the importance of combined men and
women perspectives in decision-making. Historically, the top management is mainly composed
of men. Today, a lot of companies have recognized the importance of having gender and ethnic
diversity in the workplace even in the company boards are increasingly added for the purpose
of diversity. Tough, well-composed boards embrace a diversity of people, skill, talents, abilities,
experiences and perspectives from both gender and the minorities.
ETHICS, VALUES AND MORAL IN GOVERNANCE
Governance is vital on how organization relate to each other and stakeholders. With a lot
of changes in managerial settings, governance requires a highly competent, wee-inform and
concerned administration.
Ethics is about directing human conduct using the standards of right and wrong that tells
people what must be done based on rights, obligation, benefits to society, fairness, or specific
virtues. The primary objectives of ethics is to ensure good governance especially various
countries where there is a spread of democracy.
Morals are another individual characteristic that can affect an individual’s ethics. Morals
are the rules people develop as a result of cultural norms and values, traditionally, what
employees learn from their childhood, culture, education, religion, and others. They are usually
described as good or bad behavior.
The over-all objective of morality is to guarantee good governance with primary regard
for moral values, practices and behavior. These moral values are taught in an individual by his
parents, teachers, religion, society and the environment of workplace. In the Philippines today,
an increasing number of Filipinos are becoming educated, progressive and aware of the rights.
Good governance cannot be successful in the absence of ethics and moral values. It is
said that ethics and moral values can bring good governance and maximum public welfare.
Therefore, government and private sectors must employ and promote ethical practices in
management.
INDIVIDUALS INFLUENCES ON ETHICAL BEHAVIOR
There are several individual and situational factors that may affect a person’s ethical
behavior at work. The likelihood of an informed and ethical decision is based from a lot of
information about a person and the circumstances. Here are some of these individual and
situational factors, namely:
Individual factors affecting ethics
What defines bad behavior from good is ethics. Ethics is formed starting from early
childhood and continue until a person becomes an adult. There are several individual factors
that when a person makes decision, all these factors unite.
In the workplace, ethics works well and in consistency with the manner the business
world sees morality and values. In the daily conduct of employees, ethics is responsible for
regulating these behaviors. The individual factors that determine the ethical standards of a
person consist of the following:
1. Stage of moral development – Moral development is the process wherein children are
able to develop their right attitude and behaviors on how to treat other people in the
society founded on social and culture norms, rules and laws. As discussed in chapter 2, it
was Lawrence Kohlberg who offered a framework on how children form moral
reasoning through a series of six key stages. Although, in reality the development of
morality differ in every individual and culture.
2. Personal values and moral – The ethical standards of people are influence also by their
individual values and morals. Locus of control is an important variable that effects
ethical behavior. Locus of control is a concept of psychology that concerns how
intensely people consider they have control over the situations and experiences that
influence their lives. A person with an internal locus of control is confident that he
control all the events in his life. While a person with an external locus of control has the
belief that either fate or luck or could be other people effects his life.
3. Family influences- Every starts from the family, so they say. Children from their ethical
standard base from their perception of their parent’s behavior. When children see their
parents and other member of the family observe high ethical standard, individuals more
likely to embrace high ethical standards. If children see their parents and family
members having unethical behaviors, mostly likely that they would develop low ethical
standard.
4. Peer influence – Peers are those coworkers who are always around during the conduct
of operations in the workplace. Sometimes an individual’s decisions in life are influenced
by the behaviors and attitudes of peers. These behaviors and attitude of peers are vital
in ethical decision making. Hence, establishing good relationships with coworkers should
be established by an employee. There will be a harmonious workplace will surely lead to
success in attaining both the employees and the company’s goals.
5. Life experiences- Life experiences of people help them evaluate whether their behaviors
and attitudes are ethically correct, incorrect or acceptable. These experiences help
individuals discover possible bases of moral obligations that consist of God, human
reason or the goal to be happy. These experiences in life also serve as guide to actions
for individuals and groups that form their principles of right behavior.
6. Social norms- Ethical behavior could also be defined through local customs and
traditions in a certain culture. What is normally acceptable in one culture could
absolutely forbidden in another. Culture differs from one country to another and so are
ethical practices. For instance, when Filipino children who have been conservatively
raised go to other countries as immigrants, they quickly embrace the social norms of
other nations.
7. Religious beliefs- Most faith believers in life beyond death. The theme of judgement in
the afterlife is a shared belief among most religions. It is the belief that good deeds
while on earth are rewarded and bad deeds could be penalized in the afterlife.
Commonly, the Ten Commandments serve as the moral codes for which to live by in
defining good deeds for most religions. Obeying the commandments seriously is a
important factor for a person to define his overall ethical behavior.
8. Upbringing- A person’s upbringing also defines his ethical behavior. Generally, people
who were raised in a loving, non-violent home environment tend to show and act
ethically. People who were raised in an abusive, dysfunctional family are likely to
demonstrate unethical behavior during their adult years.
9. Laws – Laws, and a person abiding by them, are ethically influential. Many people do
not break the law because of the fear being prosecuted and punished. In the Philippines,
most laws determine how people should behave ethically. The level of crime done
dictates the level of punishment to be given. A person who are shoplifted may go to jail
and this act make him be discourage to repeat the action.
SITUATIONAL INFLUENCES ON ETHICAL BEHAVIOR
With the intent to behave a fair basis for judgements or action, one looks to personal
ideals of what is appropriate to guide them, rather that unchanging universal code of
conduct, such Biblical law under divine command theory or the kantian categorical
imperative. Basing ethical behavior from the situation means going against the principle and
instead making use of comparable reason which would justify it.
There are two main situational factors that could influence ethical behavior and
decision-making. They are explained fully below.
Issue-Related
Issue-related is the importance of the decision to the decision maker.
Moral Intensity
 When facing with conflicting ethical demands or differing ethical values in very
difficult situations, moral intensity is severely vital. The higher the intensity, the more likely
it is that the decision the decision maker will make an ethical rather that unethical decision.
For instance, a person promised his friend to provide coaching prior to an approaching test,
but another friend in the midst of an emotional disturbing situation is also seeking
guidance. In the process of deciding who to prioritize between the two challenging ethical
demands, moral intensity is a big factor. The urgency of the problem being face, the time
element needed to provide the help and the comparative ethical sensibilities are part of the
moral intensity.
Moral intensity is the amount that people observe an issue as an ethical one.
Influences on moral intensity include magnitude of consequences, social consequence,
concentration of effect, temporal immediacy and proximity.
1. The magnitude of consequences- This is the sum of the harm or benefits that could be
impacted as the consequence of a given action.
2. The social consensus- It is the degree that members of society approve that an act is
good or bad and the possibility of effect is the increase and decrease of moral intensity
based on how likely people consider the results are.
3. Temporal immediacy- This is the distance between the time an action happens and the
start of consequence or the soonest the results of any effect are likely to take place.
4. Proximity- This refers to the emotional intimacy the decision-maker feels to those
disturbed by the decision.
5. Concentration of effect- It is to whether the effect is focused on a few people or may
affect a lot people in a small extent.
Another illustration case is the disagreement on the principles of professional code of
ethics faced by building contractors who are mostly engineers and architects. Most often in
the construction industry, the conflict is between the safety and welfare of the public and
working within the budget of the contract. Engineers and architects find themselves
trapped in these competing ethical demands. Once more, the moral intensity of the
situation is a significant consideration. The situation becomes more challenging when it is
expensive to consider the impact of the project to the public. This, the pressure is more
remarkable.
Within in issue, the moral intensity is always associated to values. People with
different value systems may have very different opinions of the moral intensity of a dispute.
For example, individuals who appreciate the environment as valuable may regard the
decreasing number of trees due to deforestation as high moral intensity issue. While those
people who do not consider too much cutting of trees as unethical would just ignore the
topic except when they become the victims of the consequences.
 The source/s of ethical disagreements could only be appreciated when people are
trained in pinpointing the moral intensity of a condition. Possibly, the conflict can be due to
differences in the values people considered to be related to the issue. It could also be that
the moral intensity of the ethical issue may be of help in developing ones understanding of
other cultures as a basis for ethical disagreements. Besides, identifying the specific nature
of the disagreement, the source of the disagreement could also better appreciated by the
disputing groups. Below is an example of this ethical disagreement.

Special Bombing Mission No. 13

When the atomic bomb was dropped on Hiroshima, the plane crew were silent.
Captain Lewis uttered six words, “My God, what have we done?” Three days later
another one fell on Nagasaki. About 152,000 were killed, many time more were
wounded and burned, to die later. The next day japan sued or peace. When
deciding whether to use “the most terrible weapon ever known” the US President
appointed an Interim committee. Most but not all of its military advisors favored
using it. Top-level scientists said they could find no acceptable alternative to using
it, but they were opposed by equally able scientist. After lengthy discussions, the
committee decided that the lives saved by ending the war swiftly by using this
weapon outweighed the lives destroyed by using it and thought that the best
course of action.

Moral Framing
A frame of reference, or point of view, refers to the way people look at a given
situation. How a person views that situation can affect his appreciation of the fact and may
affect how he determines right from wrong. A big problem in moral framing is the use of
language in which moral issues may be made to appear harmful if described in a certain
manner. The power of framing is not what is being said, but how it is said. Sometimes it
might have a even stronger effect on reasoning. Hence, moral intensity could be perceived
by people differently in different organizations.
It is when morals are conferred openly that decision-making can possibly be more
ethical. Normally, the use of moral words helps in framing because they lead to ethical
decision making. Although, many businesses hardly make use of moral words that’s why
often ethical decision-making suffers. This is called “moral muteness”.
Moral muteness usually takes place due to some concern on perceived threats to:
 1. Harmony – This is the belief that moral talk would encourage conflict and retaliation.
2. Efficiency- It is about the belief that moral talk could cloud issues which leads to a more
time-consuming decision-making.
3. Image of power and effectiveness- Managers consider that their image will be hurt if
they would be seen as someone idealistic or making decisions for ethical reasons.
Context Related
Sometimes ethics take into consideration the particular background of n act when
evaluating right or wrong, rather than judging it based on absolute moral standards. This is
known as context-related situation in ethical behavior. Here are the factors under it, namely:
1. Reward- Putting into practice ethical principle and standards may possibly be repeated
and become contagious throughout the organization when appropriated recognized and
rewarded. Ethical decision-making can be affected when the basis of the reward is
achievement. When unethical behavior is left unpunished or even supported by the
company, there is a great tendency that unethical decision-making would increase.
Often, the morality of a certain act in the company is dictated by people in top
management.
2. Authority- Subordinates are likely just to follow instructions from their superiors. On the
other hand, middle managers obey orders from their seniors. Hence, when senior
managers to conform. There are several instances that senior managers also initiate that
an unethical decision-making is tolerable in the workplace. Subordinates even fear
possible retaliation from top leaders when they disclose unethical conduct being
practice inside the company.
3. Bureaucracy- In an organization that has a bureaucratic set-up, most employees are
likely to follow rules instead of reflecting about the ethics of decisions created. The
more bureaucratic an organization is, the lower is the ethical decision-making involved,
though sometimes it would depend on authority. There are several negative effects of
bureaucracy on deciding ethically which could be in the form of suppression of moral
autonomy, instrumental morality, distancing and denial of moral status.
4. Work Roles- Work roles usually consists of a complete set of expectation of what to
value, the manner of relating to other people and the approach of displaying behavior.
While some employees elect to put more effort into their work when they are being
closely observed, they are ethically obligated to contribute 100% strength to their job
whatsoever.
5. Organizational Cultures – The norms of the group often define the standard or
satisfactory behavior in an organization. This could mean that even an unethical
behavior may be considered ethical if the group is amenable to it. For instance, while
bribery for many is non-acceptable, if a company considers it pleasing then it would turn
to be ethical. Hence, every member of the group would participate into such activity.
 6. National Context - Every country practices different ways of ethics based on it culture.
Culture is the basis for a decision to be considered as ethically right or not.
Notwithstanding the nationality of the person making the decision, the concern is the
country where the decision-making is happening. Thus, there will be differing views of
what is right and wrong depending on the shared values of the country.
CODES OF ETHICS
Codes of ethics govern decision-making when confronted with ethical dilemmas or
questionable issues. It is often referred as the value statement of a company designed to assist
professionals in running a business fairly and with integrity. It works similar to the Constitution
with general principles to direct behavior as well as outlining a set of principles that influence
decision-making. A code of ethics may include areas like business ethics, a code of professional
practice and an employee code of conduct.
Codes of ethics are commonly used in the business and professional perspective to
guarantee the public that corporations and members of regulated professions are acting in a
socially and professionally satisfactory manner. Organizations with a recognized and published
code of ethics have prepared review processes and appeals procedures to protect against
spiteful or self-centered use of the code for individual benefit.
Possible termination or dismissal from the organization may be the result in breaking
the code of ethics. A code of ethics is imperative because it openly outlines the rules of
behavior and offers the basis for a preventive cautioning.
Here are some example of code of ethics that may assist companies when creating
policies on ethical practices that must be practiced inside the organization:
1. Employee code of conduct – A business code of ethics is a framework of policies
founded on laws and values that a company requires all employees to follow to.
Different types of industries have conflicting regulatory requests that partially govern a
company’s code of ethics. All companies can set their own integrity-based policies as
part of the company brand.
2. Confidentiality and privacy policies - Lot of companies these days have been targets or
has become victims of hackers who steal customers’ personal information or proprietary
data. In order to handle properly customers’ private information, employees need to be
required to preserve confidentiality as an ethical practice. Similarly, the company’s
secrets should also have the same privacy treatment.
3. Professional appearance policy – A dress code or dress policy can also be made as a
requirement. Numerous services providers require uniform shirt for their employees.
Those employees who work as account representative may be obligated to wear a suit
and tie. Most companies would allow their employees to wear business casual during
Fridays. As part of the policy employees’ clothing must be clean and pressed to look
more presentable and professional.
 4. Promoting green business practices – Promoting green and being environment friendly
is a sound business practice. Regulating paper use in addition to recycling proper
disposal of waste are ways of being friendly to the environment. At the same time,
companies particularly those involve in manufacturing should follow specific
environment standards of safety of people, animals and the environment.
5. Obeying the law – Obviously, completing and abiding the law is a mandatory ethical
practice. Certainly, employees must follow the law althroughout their stay in the
workplace to protect their company’s image.
6. Caring and consideration policies – Business must not allow their consumers to feel
that they are just after profit. Consumers are often flooded with sales pitches everyday.
Companies should create as part of their code of ethics that employees should reflect a
caring, considerate manner atmosphere to costumers. Employees must be trained to be
helpful and sympathetic staff.
Key Components of Codes of Ethics in Business
When writing a company’s code of ethics. The legal. Compliance, value-based and
violation of codes of ethics components are important in defining and running a company
successfully. Here is the discussion of these components:
1. Legal issues – Besides expressing to all employees that they must follow the law, this
needs to be documented. In any business organizations, employees should follow local
and national laws. Although, there are some industries or particular professionalism that
have legal requirements. Bank employees for instance are being screened for money
laundering. Drivers too are subjected to reviews when they apply for driver’s license. In
the code of ethics employees must know those specific rule-breaking scenarios that may
subject them to immediate disciplinary action.
2. Compliance and regulations – Most industries follow certain legal requirements. They
are expected to shoulder fines and penalties, and face potential legal action once there
sa failure to conform to the rules. In the Philippines, there are highly regulated
industries such as the financial, energy and telecommunications sectors, which are
bounded by tight regulatory systems.
3. Value-based components – The code of ethics normally embrace the six universal moral
values that companies expect of their employees. These values consists of being
trustworthy, respectful, responsible, fair, caring and good citizens. Besides these values,
companies may also embrace diversity, being environmental friendly or dress codes. It is
vital to take all things necessary in successfully accomplishing the mission and vision of
company.
4. Violation of the code of ethics – It is important to address also in the code of ethics the
action to taken in case of violation. The process as well as the possible disciplinary
actions resulting from a specific violation must clear stated. Obviously, these disciplinary
actions must always be fair and justifiable for the violation.
Codes of Ethics Categories
A code ethics is a set of principles and rules used by companies, professional
organizations and individual to oversee their decision-making in selecting between right and
wrong. The principles behind writing the codes of ethics for companies are under two basis
categories of compliance-based and value-based. Here is a brief discussion of two types:
Compliance-Based Codes of Ethics
Compliance-based codes of ethics is based on specific rules and distinct consequences
instead of individual observing of personal behavior. Thus, even with company’s obedience to
the law, some compliance-based code of conduct do not encourage an environment of moral
responsibility inside the company.
This type of code of ethics increase regulation and punishes offenders by giving explicit
examples of what is expected and articulates to employees what behavior is standard and what
is not. Hence, is that not only set guideline for right manners but also defines penalties
violations.
In order to guarantee that the purpose and philosophies of the code of ethics are
strictly monitored, some companies engage the service of a compliance officer. A compliance
officer simply keeps up to date on the various changes that may happen in regulation codes
also observe employee conduct to promote conformity. This is true with the banking industry
which is govern by specific law on business conduct. Usually employees are trained formally to
learn the rules of conduct.
Value-Based Codes of ethics
A value-based codes of ethics language that are addresses a company’s core value
system. It may shape standard of accountable conduct as they communicate to the larger
public good and environment. This code of ethics may necessitate a greater degree of self-
regulation that compliance-based code. It also defines a company’s guiding values and permits
the employee to make their own interpretation of those values.
Some codes of ethics cover language that addresses both compliance and values. For
example, a grocery store chain might create a code of ethics that adopt by company’s pledge to
health and safety regulations more than financial advantage. That grocery chain might also take
in a statement about declining to deal with suppliers that nourish hormones to livestock or
nurture animals in cruel living situations.
CODES OF CONDUCT
Codes of conduct govern actions. A code of conduct defines how a company’s
employees should act on an everyday basis. It reflects the organization’s day-to day operations,
core values and the general company culture. Moreover, a code is a vital guide and reference
for employees to support routinary decision-making. Thereby, empowering employees to
manage ethical dilemmas the meet in everyday work.
It is often referred to as the meat and potatoes to the code of ethics. Simply, a code of
conduct applies the code of ethics to a multitude of applicable circumstances. For instance in
accompany, a specific rule in the code of ethics is to obey the law. The code of conduct may
offer a list of some definite laws relevant to diverse areas of organizational operations, or
industry, that employees must follow.
Irrespective of whether an organization is officially required to have a code of conduct
such as public companies are, all organization ought have one. A code is valuable as an internal
guideline and at the same time as an external statement of corporate values and commitments.
The code of conduct contains definite behavior that are necessary or banned as a
condition of continues engagement in work. Sexual harassment, racial coercion of viewing
unsuitable or unapproved content on company computers are some prohibited behavior inside
any company. Numerous control measures have been placed to help companies to be free from
scandalous situations which is turn made a lot of organizations have a healthier work
environment and reputation.
A well-written code of conduct explains an organization’s mission, values and principles,
connecting them with standards of professional conduct. The code expresses the values the
company needs to adopt in leaders and employees, thus defining preferred behavior.
Consequently, written codes of conduct can turn into yardsticks against which individual and
organizational performance can be qualified.
Every code of conduct is distinctive to the organizational it represents. However many
companies find it difficult to write a great code of conduct and, as a consequence, their codes
often fall short. Writing a great code of conduct needs an in-depth understanding of the
company, its culture and vision. Nevertheless, no matter the nature of a company, all great
codes of conduct share certain characteristics. A great code of conduct is:
1. Written for the reader – It is simple to understand and does not contain any technical or
legal terminology.
2. Comprehensive – it covers all significant details that may influence the daily lives of
employees and answers common questions that arise.
3. Supported by leadership – It has been recognized and ratified by the company’s senior
management team. This is usually confirmed in the form of a foreword written by the
chief executive officer (CEO) or president.
4. Accessible – It is available to all employees, current investors and potential investors.
5. Visually appealing – It follows a style that is clean reflective of the organization.
 In the Philippines, Republic Act (RA) 6713 spelled out the conduct and ethical
standards for republic officials and employees. This is to back-up the “public office being a
public trust” principle in the government service. This Act expresses the giving of incentives
and rewards for those who have shown exemplary service. This Act also enumerated those
forbidden acts transactions and their equivalent penalties for those who would violet.