Code of Conduct 101: Writing a Business Code of Conduct

An Ethics Code of Conduct, also known as Code of Ethics, is a set of written, verbal, or non-verbal values that support a company’s code of conduct describing its obligations to stakeholders of the company. Stakeholders, not to be confused with shareholders, can be any person, organization, or group that has an interest or has contributed to the company in one form or another. Any action that a company takes can affect a stakeholder; it is therefore imperative for a company to provide a formal outline of ethical conduct. Ultimately this outline will be the foundation for how sound business decisions are made.

Ethics by definition:

1. Moral principles that govern a person’s or group’s behavior.

2. The moral correctness of specified conduct.

Conduct by definition:

1. Behavior

2. How somebody manages something

Further examination of the terms allows us to interpret it at the most basic of levels. A company is essentially an organized group of individuals all working together toward the betterment of the whole. Having a guideline for ethics and compliance is vital for the survival of a structure as complex as a company. There are several people making decisions within an organization, an Ethics Code of Conduct provides the foundation of principles from which all individuals can base their decisions. Therefore an Ethics Code of Conduct proves to be as valuable of an asset as capital or revenue for any business.

How do I get started with writing an Ethics Code of Conduct for my business?

Getting started is the hardest part, as you and your team most likely have a myriad of ideas and opinions to incorporate in the code of conduct. Begin by evaluating what kind of business you are, what products or services you offer, and identify who are your stakeholders. Remember that stakeholders are not necessarily the end clients, but a collection of all relationships affected by the existence of your company. Determine how you want your company to be portrayed, what matters most to you, and where you forecast your business in 5-10 years. While much of this is related to branding and market analysis, becoming aware of these business motives while gathering information for your Ethics Code of Conduct is imperative to understand the nature of the business infrastructure, as it exists today, and how it will exist once it starts to grow. Raytheon, an experienced aerospace engineering company with 71, 000 employees, provides a great example of anEthics Code of Conduct. You may need to create a separate compliance manual for only internal employees to see, as some information may be proprietary and classified to the general public. While an Ethics Code of Conduct is publically available, an employee compliance manual is generally addressed and intended for employees only.

Begin writing your code the same way you begin the planning process for tackling a goal. Take small steps. Identify what it is that you want to portray and ask yourself these questions:

• How would you want your employees treated?

• What kind of values do you have as an individual, as a team, and as a business entity?

• Would you have a dedicated ethics office?

• Does your business model require such a department?

• Think about intellectual properties and proprietary information – how are these to be addresses and protected ethically?

Consider all aspects of the business model when writing your ethics code, as all aspects require a certain degree of ethical and executive decision-making. Ultimately, your code could be as short as one page, or as long as fifty pages, it really depends on what industry you are in, who your stakeholders are, and products / services you offer. Work with a team to look at your business from logical and humanistic standpoints, giving leeway for open discussion and differing opinions, as a discussion on ethics is team effort.