Code of Ethics and Conduct

Dr. Danish
Difference between code of ethics and conduct
• Code of Ethics and Code of Conduct are the standards that a group must adhere to, so as to remain the
member of the organization
• code of ethics is a set of principles which influence the judgement
• code of conduct is a set of guidelines that influence employee’s actions.
Basis for comparison Code of Ethics Code of Conducts
Meaning An aspirational document, issued by the board of A directional document containing specific
directors containing core ethical values, practices and behavior, that are followed or
principles and ideals of the organization is Code restricted under the organization is Code of
of Ethics. Conduct.
Nature General Specific
Scope Wide Narrow
Governs Decision making Actions
Length Short Comparatively longer
Disclosure Publicly disclosed. Employees only
Focused on Values or principles Compliance and rules
Definition of Code of Ethics

• Code of Ethics is a document issued by the top-level management, which consist of a set of principles,
designed to guide the members of the organisation to carry out business honestly and with integrity
• It describes the core values of the organisation that guides the decision-making
• It provides ethical standards which are to be followed by the members
• It sets out general guidelines to assist individuals to apply their judgment, concerning a suitable behaviour in a
given situation
• Code of ethics helps members in understanding what is right or wrong.
• The codes are disclosed publicly and hence addressed to the interested parties to know the way the company
does business
• Violation of the code of ethics by any member may result in termination or dismissal from the organisation.
• Examples
• Lawyer (Confidentiality, Competence, Courtesy)
• Doctors (Trust, Do No Harm, Privacy)
• Business world (Integrity, Teamwork, Objectivity)
• Teachers (Consideration, Growth, Communication)
• Society (Respect, Loyalty, Honesty)
• Religious (value of life, Pursue Peace, Do not steal)
• Secular (Sustainable living, Care for Vulnerable, Benefit for greater good)
Code of conducts
• Code of Conduct is a document that expresses the practices and behaviour of a person, required or restricted
as a condition for becoming a member of the organisation or profession
• The code sets out the actual rules, so it lays down the do’s and doesn’t s of an employee
• The members are responsible for its adherence and held accountable for its violation.
• Every organisation has its code of conduct issued by the Board of Directors (BOD) that determines the social
norms, regulations and responsibilities
• The document directs and guides the employees in various matters.
• Examples
• Dress Code (Formal business Attire, Health and Safety Issues etc)
• Internet Usage (download or upload unethical material, illegal or offensive), use of social media at work
• Workplace visitors (get permission from HR, meet at designated place,
• Harassment
• Plagiarism
 Importance of code
Corporations are responding to ethical crises by institutionalizing ethics through a
variety of methods such as drafting code of ethics, establish ethical committees,
appointing chief ethical officer, and publish newsletters
A code of ethics is the most popular explicit form of instilling values in
organizations. Ethics training is an other valuable tool that is used to raise the ethical
awareness of employees in organization
There is direct relationship between ethical behaviour and corporate cultures
because culture set the moral tone for corporations.
Ethical leadership is another implicit method by which organization instill ethics.
Ethical leader set the moral standards for organization by foucsing on the integrity
of common purpose.
Importance of code
Ethical code may help in relationship between managers and employees that they
can share the same principles and values
Code can help managers in situations when they are not sure how to act, or when
don’t know which decision is more accurate when dealing with ethical issue
Helps managers when he is speaking with partners from other companies
Realize both managers and employees to realize their duties and competence.
 Reasons to implement international codes
The international code of conducts (environment or labour or quality) are
implemented via
Transparency by utilizing more technological contents in production
Bilateral Trade negotiations
Signing international conventions
Global production networks (GPN)/Global Value chain (GVCs)/Outsourcing
Third party monitoring / auditing mechanism
Electronic media propagations
Consumer protest
Creating code of Ethics

The following framework is helpful to write a code of ethics

1. Define Company’s Priorities
a. use company’s core values, e.g trust, integrity, sustainability (how will reduce
carbon footprints)
2. Speak with employees about contents to include
3. Underline acceptable workplace behavior
4. Note who is incharge of compliance
5. Get Approval from Management
6. Initiate Code Program
Code of Ethics in Strategic Planning
 Incorporating ethical considerations means using society’s standards of what constitutes right or wrong behavior
as the basis for your business’ plans and policies
 Ethics shape the decisions and actions of each individual in a small business, from the owner on down
 Observing high ethical standards is sound business strategy -- resulting in customer loyalty, higher employee
retention and a positive image in the industry and within the community.
 Building consistent values and ethics into an organizational culture starts with effective strategic planning.
 Stakeholder theory is a strong starting point for ethical considerations, as stakeholders such as customers,
suppliers, governments, communities, and shareholders are all impacted by organizational processes.
 A code of ethics and ethics officers are a great structural addition to strategic planning to ensure organizational
alignment with values.
 Providing all employees and managers with training, and a confidential system of ethical reporting, are key
elements in building a strong ethical culture.
 Example
 Customer Relation Strategy (The ethical consideration means recognizing that it’s better to lose one sale today then lose many more
in the future because the company has a reputation of not being honest. Ethical standards that reinforce these goals include not
promising customers something the company cannot deliver and not exaggerating a product’s benefits)
 Social Responsibility Strategy (Companies that ignore the community’s needs don’t necessarily face negative consequences, but a
business owner who implements proactive strategies to help members of the community often reaps benefits in terms of favorable
publicity and industry recognition.