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Developing and implementing organisational codes of conduct

An overview of implementing and developing codes of conduct.

Codes of conduct are usually available in an organisation's website and referred to in the annual financial statements and/or corporate responsibility reports.

There are a variety of different codes: different names, styles and content. Some are concise and straightforward and some are more detailed and are accompanied by an ethics programme.

Whilst codes of conduct differ across organisations, they aim to influence behaviour by setting out the values, standards of behaviour and business practices that are expected of employees and other stakeholders.

In order to be effective the development and the implementation of an organisational code needs to be carefully considered. Codes should reflect the true values and behaviours that the organisation wants to uphold rather than being a public relations exercise.

The content of an organisation's code will be influenced by the objectives of the code as well as the organisation's strategy and culture. Codes should use plain, positive language, should be clear and precise and widely accessible. Their implementation should be actively monitored.

There also needs to be training and support for individuals to enable them to deal with circumstances which may threaten the values the organisation wants to uphold.

One of the unknown factors in developing and implementing a code of conduct depends on how individuals are likely to respond to it. An organisation needs to understand how codes will affect individuals' decision making and behaviour.

The effectiveness of the code will depend on an individual's ability to interpret and apply the code to a variety of situations. Codes of conduct can be characterised as either principles based or rules based. See our dedicated section Principles versus Rules for more information.

Members in business are often called upon to be involved in developing and implementing Codes of Conduct. Indeed, paragraph 300.5 of the ICAEW Code of Ethics states that "a professional accountant in business is expected, therefore, to encourage an ethics-based culture in an employing organisation that emphasises the importance that senior management places on ethical behaviour."

Codes of conduct should be unique and appropriate to each organisation; there is no one-size fits all code of conduct. However, the following guidance on developing and implementing codes of conduct may provide a useful insight into how it might be achieved in your organisation.

International Federation of Accountants (IFAC) has issued international good practice guidance for Defining and Developing an Effective Code of Conduct for Organizations (PDF 243KB/32 pages)

The Institute of Business Ethics (IBE) website has a section on developing and implementing codes of conduct, which includes some examples, and has issued a number of publications in particular:

  • Developing a Code of Business Ethics (2003)
  • Corporate Use of Codes of Ethics (2004)
  • Ethics at Work - a national survey (2005)
  • Making Business Ethics Work (2006)

The Ethics Resource Center has issued practical guidance for creating and effective code of conduct.

Ethikos publishes a bi-monthly publication that examines ethical and compliance issues in business. It also has a list of top 20 questions organisations may want to consider when developing an implementing an organisational code of conduct.