Writing a Code of Ethics

Ethics Center Dec 18, 2017

When businesses are first starting out, a code of ethics might seem like a low priority—after all, when the founder knows and hires every single employee, it’s easier to emphasize your values. However, most companies will benefit from codifying them early on.

No two companies’ Codes of Ethics will look the same. A good Code ought to:

·       take into account the particulars of your industry, the risks you face, and your employee base.

·       grow with you, as your business grows.

So where to begin?

Consult stakeholders
Although it is possible to write a Code of Ethics alone, or with just a small group, the result would only reflect what those individuals believe is important. To really get a sense of the whole organization, those writing the Code should consult a variety of stakeholders about broad values as well as specific behaviors and risks that should be addressed in the Code. It is also helpful to review publicly available Codes to gather ideas about the topics that are important to include.

Senior leadership should all be included. They are responsible for the direction of the business, and they may have years of experience informing them of where exactly an employee could go wrong. Their input is key.

However, those writing the Code shouldn’t neglect rank-and-file employees. After all, the document will apply to them as well, and junior employees might be aware of risk areas that more senior management simply aren’t. In addition, junior employees will be more likely to adopt the concepts and practices if they were part of creating the Code.

One final group that deserves consideration are your customers. What kind of company do they want to do business with? What values could you strive for that, if they saw them in your organization, would make them more likely to do business with you in the future? Aligning your company’s values with your customers’ is good ethics and good business.

Drafting the Text
Once you’ve consulted your stakeholders, writing the actual Code can begin. Although lengths of codes vary—large organizations’ may stretch over 100 pages—smaller businesses can get by with much less. Aim for clarity in language. The Declaration of Independence might have required some sophisticated and artful language, but the harder your Code of Ethics is to read, the less likely employees are to live by it.

If possible, back up specific rules and values with illustrations of what they would look like in practice. Although real-life examples from your business are helpful, you could also use fictional situations that convey the same point. Terms should be defined so there can be no ambiguity about how employees ought to behave.

Finally, to demonstrate that leadership endorses the Code of Ethics, include a personal message from your CEO, founder or another high-level leader. That will communicate how seriously the organization takes the new Code, starting at the very top.

Please read Your Business, Your Values by Ross Carey, from U.S. Bank for some tips for business owners and managers seeking to secure their company’s ethical culture and reputation.  

Tyler Lawence
Article by Tyler Lawence, Managing Editor, Ethisphere Magazine