I recently had the pleasure of sitting down with Kim Yapchai, Chief Compliance and Ethics Officer at Tenneco, to discuss her excellent program at Tenneco and the best ways to cultivate great corporate culture. We met in Chicago for an intimate gathering of compliance professionals at Soho House in the West Loop as a part… Read More
Code of Ethics
A code of ethics is similar to a code of conduct in that it establishes behavior expectations that an organization has of its employees and third parties. However, it is slightly adjacent because a code of ethics dives deeper into the principles that should guide their actions and touches upon issues such as harassment, safety, and conflicts of interest. This code is often considered an ethical code of conduct.
What is a Company’s Code of Ethics?
A company’s code of ethics outlines the core values a company seeks to adhere to in its business operations. It is a high-level overview of the principles and values that the organization wants those acting on their behalf to uphold when doing business.
Many organizations combine their code of ethics and their code of conduct into one master code, and others chose to keep them separate. If they are kept separate, the code of ethics is often more high-level, focusing on the company’s values and morals. In contrast, the code of conduct focuses more on specific situations one might encounter on the job, like accepting a bribe.
Why is Having a Code of Ethics Important?
Having a code of ethics in place is essential because it outlines the guiding principles that employees should be holding themselves to every day. Furthermore, the code serves as a permanent reminder of these values, one which the employee has to acknowledge they will abide by. If the code of ethics is violated, a range of consequences might occur, including a warning, a review by the ethics committee, or termination depending on the severity of the infraction.
What is the Purpose of a Code of Ethics?
The purpose of a code of ethics is to inform those acting on behalf of the organization how they should conduct themselves. A code of ethics reiterates the organization’s values and morals so that employees and third parties understand the standards they are accountable to uphold.
What is an Example of a Code of Ethics in an Organization?
A commonly used ethical standard is the UN Global Compact’s Ten Principles, which covers human rights, labor, the environment, and anti-corruption. The ten principles that fall under these categories explain how businesses should conduct themselves. By integrating these ideals, or ones similar, into policies, an organization can build a culture of integrity, upholding responsibilities to society at large, but establish guiding principles for long-term success.