Your Organization needs a Code of Conduct—Here’s Why

A code of conduct is an important tool in HR management. In fact, 86 percent of Fortune Global 200 companies utilize a code of conduct.  But what is a code of conduct and why should your company create one if it doesn’t exist already?

Businesswoman presenting ideas on a whiteboard to colleagues during a team meeting, illustrating strategic planning and teamwork.

Code of Conduct: A Road Map to Success

To put it simply, a code of conduct (sometimes referred to as a code of ethics) tells your employees how they are expected to behave. It articulates an organization’s mission, as well as its values and principles.

Your code of conduct should clearly outline what you believe as an organization and how each employee should treat each other. It should also detail how employees should interact with others, since they act as a representative of your business.

Aside from meeting legal requirements, establishing a code of conduct also helps to create a company culture and improve an organization’s reputation.

There are several reasons that your business should have a code of conduct, including:

What’s Included in a Code of Conduct

Deciding what to include in a code of conduct may vary depending on your business or industry, but there it’s important to address several common areas.  Some of the most common elements are:

Integrity—Integrity is how you expect your employees to react in any ethical situations, especially when it involves a customer.

Teamwork—Including teamwork will let your employees know how they are expected to act and interact within a group.

Respect—Everyone who interacts with your business deserves to be treated with respect.

Innovation—You always want to be improving your product and/or customer experience to grow your business.

Client focus—Ensure your employees know how you expect your customers to be treated.

You should also include items such as a letter from leadership and a table of contents at the beginning of the code of conduct. All of these are meant to give all employees, from the CEO to the new hire, a greater understanding of company values and expectations.

It’s important to be clear and concise when drafting your code of conduct. You want to make sure there’s no confusion.

Updating Your Code of Conduct

Many companies take a “set it and forget it” approach to their Codes of Conduct. However, with consistent annual updates, a Code of Conduct can help maintain a culture of high ethics and integrity in your company. Always remember to update your code of conduct as things change over time. It should grow along with your company.

Before you begin to update your code of conduct, consider:

  • When it was last updated
  • Changes to company policies and/or federal and state laws
  • Whether the guidelines are still current

You might also want to compare your code of conduct to other companies working in your industry. See what they have and then decided if you need an update.

Once you do start revising your code of conduct, make sure you have a committee reviewing it and seek feedback from stakeholders.

Want to know more? Check out KnowledgeCity’s courses on Creating a Code of Conduct and Business Ethics and learn how you can incorporate your company’s values and vision into a strong code of conduct for ethical decision making.

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