Get the basics right

Follow these guidelines for drafting or revising a Code of Ethics.

A Code of Ethics and/or a Code of Conduct have long been accepted within organisations as a basic part of their ethics and compliance programme. While these Codes can, and should, serve a valuable role within the organisation, all too often, employees know little of either the intent or the contents of their company’s Codes.

Here are five guidelines that would significantly improve the usability and value of a company’s Codes.

1. Determine your need for a Code of Ethics or a Code of Conduct

Ideally, organisations should have a Code of Ethics that comprises two parts: a Code of Values that defines the organisation’s values, vision and mission, and a Code of Conduct that outlines the standards of behaviour required within the organisation. This combination is based on the recognition that ethics (encompassing ethical conduct and an ethical culture) is shaped both by building an increasing commitment to the company’s values and by improving compliance with the organisation’s rules and policies.

Distinguishing between the Code of Values and the Code of Conduct is also warranted to realise the benefits of their differences. Values and value-based initiatives are a more effective approach to improve ethics and ethical conduct, while rules, regulations and policies (as contained in the Code of Conduct) are a more effective mechanism to curb or reduce unethical conduct.

2. Identify the purpose of the Codes

The overall purpose of the Code of Ethics is to contribute to the management of ethics in the workplace, with the overarching aim of creating an ethical culture.

The Code of Values should clarify the organisation’s values in pursuit of maximising the alignment of workplace behaviour with the organisation’s values. The Code of Values should serve as the foundation of the Code of Ethics and underpin the Code of Conduct. The company’s values should therefore be clearly linked to the expected conduct (as, for example, the value of honesty would relate to a fraud and corruption policy).

The purpose of the Code of Conduct is to clarify the standards of behaviour that are expected of employees and to provide guidance to employees with regards to what this implies and entails, with the aim of preventing or reducing unethical behavior.

3. Ensure the effectiveness of your Codes

Fairness is crucial to ensure the Codes (especially the Code of Conduct and its supporting policies) are seen as legitimate mechanisms. There cannot be different or selective applications of the Codes and policies. Instead, fairness dictates that the company’s policies are fair to all to whom they apply and that all policies are consistently applied to all people; and

The company should have a plan in place to maintain on-going awareness and knowledge of its Codes. This can be done by its inclusion in employee inductions via a well-developed communications plan, and as part of the company’s ethics training programmes.

4. Review your Codes and update your policies

A Code of Ethics and particularly a Code of Conduct should be reviewed annually to ensure that it complies with current legislation and promotes best business practice. Employees can be involved in this process to provide feedback on the practical application of policies.

5. Create a user-friendly Code of Ethics

In pursuit of transparency, the Codes need to be written in clear, plain language so that they are understandable to all stakeholders. This may warrant translating the Codes to accommodate the dominant languages amongst employees;

In order to create a user-friendly Code of Ethics, it should be kept as succinct as possible. This applies in particular to the policies contained in the Code of Conduct, where the need to be comprehensive should be continually balanced against the need for brevity. For policies that warrant more detail, it is preferable to include only a summary in the Code of Conduct and to reference the location of the full version of the policy via a hyperlink;

The Code of Ethics should endeavour to encompass all the issues and policies that are pertinent to ethics in the organisation so that it serves as a “one stop” location for the company’s ethics documentation and ethics related policies;

A list of definitions (in alphabetical order) should be included to provide readers with a concise summary of the meaning of the issues, topics, terms and concepts used in the Code of Ethics; and

To promote ease of use, the Code of Ethics should include a table of contents and the Code of Conduct should include an alphabetical index of issues and topics that are addressed, as well as the name of the policy in which those topics are addressed.

Ensuring that a company’s Code of Ethics and Code of Conduct are well designed elements of its ethics and compliance programme is a valuable start. Making the Codes a visible aspect of the company’s ethics management programme and ensuring the fair and consistent application of the Codes are important next steps. But it’s not enough: to this needs to be added other ethics management initiatives to further support building and maintaining a culture where ethical conduct is the norm.

By Cynthia Schoeman
Published in HR Future, December 2013