Institute of Business Ethics>doing business ethically ... makes for better business

Codes of Ethics
What are they for?
Developing a code
Format of a code
Content of a code
Making it work
What about SMEs?
Ethical tests
Examples

Developing an effective code of ethics:
Format of a Code of Ethics


Many codes fail because they suffer an identity crisis. It is not clear for whom they are intented or what their purpose is. They are often not designed with their reader in mind nor the context in which they are intended to be used.

The following should be considered in drawing up a format for a code of ethics:

  • Purpose and target audience - the style of the document should be influenced by its purpose. Above all, it should be helpful to employees.
  • Accessibility - the language must be comprehensible and familiar to the target audience. Hard and soft copies should be available and accessible where they are likely to be needed. Use of 'non-legalese' language and Q&As are also important.
  • Relevance - it needs to recognise issues relevant to staff and be material to the business's activities and locations
  • Leadership and reach - it needs to convey the commitment of the board and that ethical standards are applicable to all staff
  • Compliance or discursive - a code will normally contain "must do's", aspirations and dilemmas aimed to raise ethical sensitivity and confidence of staff. It is important to point out that what is right and wrong will not always be clear. Some short dilemmas should be included to illustrate the guidance provided.


There are two main types of code of ethics:Stakeholder and Issues (some are hybrids)

A Stakeholder based code sets out organisational commitments and staff guidance based around relationships with different stakeholders.
See FAQ: Who are a company's stakeholders?

An Issues based code offers guidance framed around issues of concern to the organisation.
See FAQ: What are some examples of business ethics issues?


Examples of the codes of ethics of large businesses can be found here


>> click here to look at suggestions for the content of a code



 

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