Why codes of conduct

The code articulates the values the organization wishes to foster in leaders and employees and, in doing so, defines desired behavior. As a result, written codes of conduct or ethics can become benchmarks against which individual and organizational performance can be measured. Additionally, a code is a central guide and reference for employees to support day-to-day decision making.

Code of conduct: a road map to success To put it simply, a code of conduct sometimes referred to as a code of ethics tells your employees how they are expected to behave. There are several reasons that your business should have a code of conduct, including: It encourages ethical behavior within your company. It makes your business a better place to work. Some of the most common elements are: Integrity —Integrity is how you expect your employees to react in any ethical situations, especially when it involves a customer.

Leave a Reply Cancel reply Your email address will not be published. Comment Name Email Website Save my name, email, and website in this browser for the next time I comment. Search for:. Join our Newsletter List Today Start getting the latest online training news in your inbox! A code of conduct allows companies to promote positive goodwill among current employees, potential employees and the general public.

Companies that treat employees with respect and provide a favorable workplace can gain a reputation as an exceptional company in the business environment. Ethical values usually promote the common good among all employees or advance the values found in society or the business environment.

Companies often implement their ethical values into their code of conduct, since ethics mean different things to different people. If companies outline particular ethical values, such as transparency, integrity and social responsibility, that can help employees understand the specific ethics or conduct principles that drive the organization. Your Practice.

Popular Courses. Business Essentials Guide to Mergers and Acquisitions. Business Business Essentials. Table of Contents Expand. What Is a Code of Ethics? Understanding Codes of Ethics. Types of Codes of Ethics. Example of Code of Ethics. Code of Ethics FAQs. The Bottom Line. Key Takeaways A code of ethics sets out an organization's ethical guidelines and best practices to follow for honesty, integrity, and professionalism.

For members of an organization, violating the code of ethics can result in sanctions including termination. In some industries, including banking and finance, specific laws govern business conduct.

In others, a code of ethics may be voluntarily adopted. The main types of codes of ethics include a compliance-based code of ethics, a value-based code of ethics, and a code of ethics among professionals.

A focus on climate change has become an integral part of companies' codes of ethics, detailing their commitment to sustainability. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

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The shingle theory describes the behavior of a theoretical broker-dealer who maintains good ethics and high conduct when transacting securities.