HOW TO CRACK YOUR COMPANY’S CODE OF ETHICS

THE FIVE FUNDAMENTAL FACTORS INFLUENCING CRITICAL DOCUMENTS

Codes of ethics and/or conduct have long been accepted within organisations as a fundamental part of their ethics and compliance programme.

However, while these codes should serve a valuable role, all too often employees know little of the intent or the contents of their company’s codes.

There are five factors that provide useful guidelines for improving these codes.

1     Is a code of ethics or a code of conduct needed?

Both are needed as a code of ethics comprises two parts: the company’s values (code of values) and its code of conduct. This combination recognises that ethics is shaped both by building increased commitment to the company’s values and by improving compliance with its rules, regulations and policies (as contained in the code of conduct).

2     What is the purpose of the codes?

Within the code of ethics, the company’s values and code of conduct fulfil different roles.

Values serve as the foundation for the code of conduct. As such, they should be clearly linked to the desired conduct as, for example, honesty relates to a fraud and corruption policy.

The code of conduct usually consists of a range of policies that together are intended to clarify the standards of behaviour that are expected of employees, with the overall aim of reducing misconduct.

3     Factors that promote the effectiveness of the codes

The code of ethics (especially the company’s values) needs to reflect reality and avoid creating ethical gaps between what is stated and what is lived. Exaggerated or false claims will erode the effectiveness of the code.

Fairness and the consistent application of all policies to all stakeholders are crucial to ensure the code of conduct is seen as a legitimate mechanism. There cannot be different or selective applications of the code and its policies.

Maintaining on-going awareness and knowledge of the codes is essential. This can be done by its inclusion in employee inductions, via a communications plan and as part of ethics training programmes.

4     Reviewing codes and updating policies

A code of conduct should be reviewed annually to ensure that it complies with current legislation and promotes best business practice. A review that simply checks for the absence or presence of policies does not qualify as an adequate review. Employees can also be involved in this process, for example, by providing feedback on the practical application of policies.

5     Factors that create a user-friendly code of ethics

The codes should be written in clear, plain language so that they are understandable to all stakeholders. This may warrant translating the codes to accommodate the dominant language/s amongst employees.

To be user-friendly, the code of conduct and its supporting policies should balance the need to be comprehensive against the equal need for brevity. For policies that warrant more detail, a summary can be included in the code of conduct and the location of the full version of the policy can be referenced.

A list of definitions should be included to provide readers with a concise summary of the meaning of the terms and concepts that are used.

The code of ethics should endeavour to encompass all the issues 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.

These guidelines can ensure that a company’s code of ethics is a well-designed element of its management of ethics that makes a positive contribution towards creating an ethical workplace.

By Cynthia Schoeman
Published in The Star and Pretoria News Workplace, June 2014