2. Ethics
• Ethics, also called moral philosophy, the discipline concerned with
what is morally good and bad and morally right and wrong. The term
is also applied to any system or theory of moral values or principles.
Ethics is relevant to you in your everyday life as at some point in
your professional or personal life you will have to deal with an
ethical question or problem.
2
3. Code of Ethics
• A code of ethics is a guide of principles
designed to help professionals conduct
business honestly and with integrity. A code
of ethics document may outline the mission
and values of the business or organization,
how professionals are supposed to approach
problems, the ethical principles based on the
organization's core values, and the standards
to which the professional is held.
• A code of ethics, also referred to as an "ethical
code”.
3
4. Why is a code of ethics important?
• A professional code of ethics is designed to ensure employees are
behaving in a manner that is socially acceptable and respectful of one
another. It establishes the rules for behaviour and sends a message to
every employee that universal compliance is expected. It also
provides the groundwork for a pre-emptive warning if employees
break the code. A code of ethics can be valuable not just internally as
a professional guide but also externally as a statement of a company’s
values and commitments.
4
5. Types of code of ethics
• A code of ethics can take a variety of forms, but the general goal
is to ensure that a business and its employees are following state
and federal laws, conducting themselves with an ideal that can be
exemplary, and ensuring that the business being conducted is
beneficial for all stakeholders. The following are three types of
codes of ethics found in business.
• Compliance-Based Code of Ethics
• Value-Based Code of Ethics
• Code of Ethics Among Professionals
5
6. Compliance-Based Code of
Ethics
• For all businesses, laws regulate issues such
as hiring and safety standards. Compliance-
based codes of ethics not only set guidelines
for conduct but also determine penalties for
violations.
• In some industries, including banking, specific
laws govern business conduct. These industries
formulate compliance-based codes of ethics to
enforce laws and regulations. Employees usually
undergo formal training to learn the rules of
conduct. 6
7. • This type of code of ethics is based on clear-cut rules and well-defined
consequences rather than individual monitoring of personal behaviour.
Despite strict adherence to the law, some compliance-based codes of
conduct do not thus promote a climate of moral responsibility within
the company.
7
8. Value-Based Code of Ethics
• A value-based code of ethics addresses a company's core
value system. It may outline standards of responsible
conduct as they relate to the larger public good and the
environment. Value-based ethical codes may require a
greater degree of self-regulation than compliance-based
codes.
8
9. • Some codes of conduct contain language that addresses both compliance and
values. For example, a grocery store chain might create a code of conduct that
espouses the company's commitment to health and safety regulations above
financial gain. That grocery chain might also include a statement about refusing to
contract with suppliers that feed hormones to livestock or raise animals in
inhumane living conditions.
9
10. Code of Ethics Among Professionals
• Financial advisers registered with the Securities and Exchange
Commission (SEC), or a state regulator are bound by a code of ethics
known as fiduciary duty. This is a legal requirement and also a code
of loyalty that requires them to act in the best interest of their clients.
10
11. How to develop a code of ethics
• Here are the steps you can follow to create your own professional code of ethics
for your company:
Set your priorities
Ask employees for input
Put someone in charge
Have someone to turn to for help
11
12. Set your priorities
• The first step to creating a code of ethics is deciding the values that are
important to your company. Putting these rules in place early on will
help your company grow the way you want it to. For example, as your
organization develops and expands, you will be hiring new employees,
and you want them to understand the values of your organization
before you bring them into the workplace.
• One way you can identify your company’s values is to consider what
your limits are when trying to acquire clients or meet your revenue
goals. It is also important to think about your company’s work
environment as well as smaller factors like attendance and dress code.
12
13. Ask employees for input
• Request your employees participate in crafting your code of ethics.
Employees need to understand why it is important to put the code of
ethics into writing and why it contains the tenets it does. If you ask
them for input when you are creating the code of ethics, they will be
far more likely to support the idea, and the code may encompass a
more well-rounded selection of principles.
13
14. Put someone in charge
• Even if you have the support of senior management and employees
alike, someone still needs to be put in charge of applying your code of
ethics. Often known as an ethical or compliance officer, this person
needs to have a strong commitment to the success of your
organization, be reliable and have strong interpersonal skills. Usually,
this role will fall to someone in your HR department who may also be
responsible for monitoring and reporting misconduct.
• The employee you put in charge of maintaining your company’s code
of ethics should also be responsible for updating it. The code should
be a dynamic part of your business that changes as your company
grows and develops. Each year, you should ask yourself if it continues
to represent your business and who you want to be.
14
15. Have someone to turn to for help
• If you are part of a smaller company in a low-risk, low-liability field,
you can typically draft a code of ethics yourself. However, if you have
more than 20 employees, you may want to consider consulting with a
human resources specialist or an ethicist. It can be beneficial to ask for
help to make sure you have covered every necessary principle in your
code of ethics.
15
16. What is the purpose of a professional code of
ethics?
• Having our business ethics in writing doesn’t mean that we don’t trust
our employees. We strive to hire ethical people who have their own
personal standards, so we expect that a written code won’t be
necessary most of the time.
• But it can still be helpful. You may find yourself in a situation where
you’re not sure how you should act. Life is full of grey areas where
right and wrong aren’t so apparent. Some professional ethics also
correspond to laws that you absolutely must know to do your job
properly, so we will mention them in our code of ethics.
16
17. Difference between the code of ethics and
code of conduct
• A code of ethics is broad, giving employees or members a general idea
of what types of behavior and decisions are acceptable and encouraged
at a business or organization. A code of conduct is more focused. It
defines how employees or members should act in specific situations.
17
18. Example for Code of Ethics
Teachers and Education
• Teachers and other education
professionals are role models to their
students. Their code of ethics not only
protects their students against
mistreatment, but it also protects their
sense of fairness itself.
18
19. Some code of ethics examples in
education include:
• Consideration - Teachers should put
the needs of their students first.
• Growth - Educators need to pursue
professional growth.
• Communication - Teachers work with
parents as a support team for each
student.
19
20. The Business World
• Corporations and have codes of ethics to
help workers decide if certain behaviors
are appropriate and acceptable when
dealing with clients and outside
agencies. Many organizations require
employees to attend yearly training on
ethics and, in some cases, to sign
statements promising to adhere to all
ethical guidelines laid out by the
company.
20
21. Examples of ethics in the business world include:
• Integrity - Employees should maintain honesty
and clear communication in the workplace.
• Teamwork - Members of a professional
organization should work together to get the job
done.
• Objectivity - Employers should not make career
decisions based on whom they like best or with
whom they have personal relationships.
21
