| by Simon Webley Executive
Summary Developing a Code of Business Ethics sets out to provide
a practical and comprehensive guide to producing, implementing and maintaining
an effective code of business ethics. This publication examines the business
case for introducing a code; provides a step-by-step guide to producing a code
and explores how to make the most of a corporate code. It explains why each company
should develop its own unique code and the updated IBE Illustrative Code of
Business Ethics provides a checklist of issues and an example of how a code
might look. Corporate codes from Severn Trent Plc and Unilever Plc provide examples
of two different approaches to layout and content. Developing a Code
of Business Ethics includes examples of business ethics dilemmas; ethical
tests used by staff to facilitate decision-making; best practice in making
a code effective and checklists on how to produce, implement and use a code. Apart
from legal requirements, business in general has no recognised code or standard
which provides a benchmark for its conduct. Individual corporations have therefore
to formulate their own values and the way they do business. An ethics policy helps
companies to understand and develop policies on issues of business and employee
conduct. The proportion of larger UK companies with explicit ethics policies
has risen over the last ten years from a third to more than a half. Having an
ethics policy is now considered a hallmark of a well managed company. The ethics
policy is normally expressed in a code of business ethics, sometimes called a
code of business conduct or principles.
Key Points From Developing
a Code of Business Ethics:
1. Having a code of ethics is considered
to be good corporate governance. Codes should not be developed merely as a reaction
to a reputation crisis. Staff at all levels and in all jurisdictions should be
involved in both the content and implementation of a code. 2. Pressures
on UK boards of directors to take corporate conduct seriously have grown in recent
years. They range from new legislation and increased employee requirements to
media reports of corporate misconduct and the growth of socially responsible investment
(SRI). 3. Corporate values and ethics have to come from the top. Board involvement
is vital to the effectiveness of an ethics policy. The code should be endorsed
by the chairman and/or CEO and board members should require regular reports on
how the code is operating. 4. One size never fits all. Each company needs
to develop its own unique code of ethics, based on the core values of the business. 5.
Having a code is not enough to ensure ethical behaviour. The code needs to be
understood, used, taught, monitored and regularly re-evaluated and revised.
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October 2003 | 
