|Developing an Effective Code of Ethics: Process
Eight Steps for Preparing a New Code
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The process for drawing up a code of ethics and its final format
are both critical in maximising its effectiveness for embedding ethical values into business behaviour.
1. Get endorsement from the Board Corporate values and ethics are matters of governance. The board must understand the business case for an ethics policy and code, recognise their role in its success, its relevance to what they do and how, and be committed to monitoring its effectiveness.
2. Find a champion It is good practice to set up a board level (ethics or corporate responsibility) committee, preferably chaired by a non-executive director, or to assign responsibility to an existing committee (such as Audit or Risk). A senior manager will need to be responsible for the development of the policy and code and the implementation of the ethics programme.
3. Understand the purpose It is important to clarify the relationship between and understand your organisations approach to corporate responsibility, ethics, compliance and corporate social responsibility strategies.
4. Find out what bothers people Merely endorsing an external standard or copying a code from another organisation will not suffice. It is important to find out what topics employees require guidance on, to be clear what issues are of concern to stakeholders and what issues are material to your business activities, locations and sector.
5. Be familiar with external standards and good practice Find out how other companies in your sector approach ethics and corporate responsibility. Understand what makes an effective policy, code and programme from the point of view of the business, the staff and other stakeholders. How will you embed your code into business practice?
6. Monitoring and assurance Consider how the success of the policy will be monitored and to whom the business will be accountable regarding its ethical commitments. How will you know its working? What are the key indicators/measures of an ethical culture for your organisation?
7. Try it out first The draft code needs piloting - perhaps with a sample of employees drawn from all levels and different locations. The Institute of Business Ethics welcomes requests to comment on drafts.
8. Review Plan a process of review that will take account of changing business environments, strategy, stakeholder concerns and social expectations, new standards, and strengths and weakness in your ethical performance.