In a business context, a code of ethics is a policy published by a company or other organization to guide the ethical decision-making of its employees or members. It is typically a formal, written document laying out the ethical expectations that a company has of its employees, and setting out rules and guidelines for behaviour. A code of ethics is one of several kinds of documents designed to provide high-level guidance for employees. These include documents such as the vision statement, mission statement, or the values statement. Codes of ethics are sometimes known as codes of conduct.
Codes of ethics vary considerably. Some are very brief (sometimes just a single page) while others may be 60 pages or more. Some codes are aspirational, setting high objectives for ethical behaviour for employees to aim at, while others focus on setting out strict rules and explaining the punishments resulting from violating those rules. Some codes include both an aspirational introduction and a set of strict rules.
Most major corporations now have codes of ethics. In some cases, they create a code of ethics as part of their overall approach to regulatory compliance. While ethics and compliance are not the same thing, there is some overlap: many unethical behaviours are also illegal, and some unethical behaviours may lead to illegal ones.
In some instances, a code of ethics may also function as a kind of public promise. By publishing a code of ethics, a company signals to external stakeholders the kind of behaviour it expects from its employees. This will often have implications for the ways in which those stakeholders can expect to be treated when they interact with the company.
It has often been pointed out that simply having a code of ethics accomplishes little. In order for it to guide behaviour, employees need to be aware of their code and its details. Many companies today engage in sophisticated training programs to help their employees understand and learn to apply their codes.
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