Sound ethical behaviour is a critical component of running a successful business. Organisations need to make clear the standards of ethical performance and clarify what bios are required for compliance with established principles of good management and good governance. Progressive organisations assist employees in understanding and living these ethical principles by compiling a code of ethics. Codes of ethics are guidelines describing the moral principles or values used by the organisation to steer the conduct of the organisation itself as well as employees and all their business activities.

There are several advantages to having a code of ethics.

  • A code of ethics provides explicit guidance to managers and employees, so they know what is expected of them in terms of ethical behaviour.
  • A code of ethics provides new employees with ethical guidance and a sense of common identity.
  • A code of ethics enhances the organisation’s reputation and inspires public confidence.
  • A code of ethics signals to suppliers and to customers what the organisation’s expectation of product proper conduct is and
  • Finally, a code of ethics promotes a culture of excellence by demonstrating the commitment of the organisation to ethical behaviour.

The following will guide you in the preparation of a code of ethics.

  1.  Secure the commitment of top management

Without the full and public commitment of top management, a code of ethics will not be taken seriously by employees. Commitment to a code needs to be seen and to be felt.

  1. Obtain organisational agreement on the primary purpose of the code.

The organisation has to decide whether the code is mainly for the benefit of employees or is it directed to all stakeholders including members of the board, shareholders and even customers. It is important to be clear on the major objectives and to be aware of all the changes that such a code may bring with it. This may range from a shift in organisational culture to creating a whistle-blowing capability.

  1. Identify and define existing sources of values within the organisation.

Consult existing codes, legal guidelines, contracts, policies, memoranda and founding statements. Involve managers and employees in the evaluation. Do an internet search to find examples of good ethical codes used by other similar organisations. Gain a consensus about what the organisation’s traditions are and what the unwritten rules of business are.

  1.  Involve employees in creating the code.

This is best achieved in a small group but drafting the code should be a dynamic process so don’t exclude comments from employees at any level.

  1. Prepare a draft code.

The draft code should include an introduction explaining the code’s purpose, the need for the code and expectations about its use. It should contain a clear definition of the organisation’s mission and objectives. The code should provide guidance on handling relations with each of the organisation’s constituencies: employees, shareholders, customers,  suppliers and the broader community. The code should define expectations about acceptable behaviour, and it should also include a formal mechanism to resolve employees’ questions about ethical behaviour.

  1. Circulate the draft

Consult widely within your organisation and get feedback and comments. Take the feedback seriously. In addition to generating additional ideas, this process reinforces staff awareness of the code. If there’s a significant revision of the initial draft code, circulate a second code for comments and approval.

  1.  Devise an implementation strategy.

Once the drought is finalised. plan for its implementation. The implementation strategy must be dynamic. Incorporate the code into new staff induction, staff training and management development programmes. Identify who is going to be the custodian and champion of ethical behaviour inside the organisation and assist them with the necessary administrative and political support to undertake this

  1. Circulate the code widely

The code should be sent to all employees accompanied by a letter from the head of your organisation explaining the purpose of the code, and expectations for its use.

  1.  Establish a procedure for questions concerns and complaints

Make someone responsible for responding to any questions or concerns arising from the code and its implementation. Decide on a whistle-blower hotline. [This can be outsourced to a third-party provider.]

10.  Monitor and evaluate the code

Monitor and evaluate the code’s effectiveness from time to time by following your normal formal policy review process.  The Ethics Code champion should regularly monitor and evaluate the application of the code and its continued relevance as circumstances change.

An active code of ethics will serve to remind employees and management that they should be ethical, open and honest in all their dealings.

Latest posts by James Forson (see all)

Writter and Content head at Regenesys School of Business based in Sandton, Johannesburg, South Africa

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