Lesson 4:

Code of Ethics
and
Business Conduct
 Code
of Ethics
 Code of Ethics
• American ethical codes were first
called creeds or credos and those 1980s
were considered “legalistic” and “more
likely to talk about ethics or reputation
of the company”.
• Used to assist members in
understanding the difference between
right or wrong and in applying that
understanding to their decisions.
Code of Ethics

• Codes of ethics are written to

guide behavior.

• Ethics codes or codes of conduct

seldom provide detailed, specific
prohibitions. Rather, they are
broader sets of principles that are
designed to inform specific laws or
government actions.
Code of Ethics

• Sets and outlines the general

expectations and standard’s for
employee behavior and ethical
conduct.
 Codes
of
Conduct
Codes of Conduct

• Designed to anticipate and

prevent certain specific types of
behavior; e.g. conflict of interest,
self-dealing, bribery, and
inappropriate actions. Although
conduct codes can be brief, most
often they are fairly lengthy and
detailed.
Codes of Conduct

• The rational for the detailed

scope of this kind of code is that it
is necessary to both protect the
employee while at the same time
protecting the reputation of the
government.
Codes of Conduct

• Most codes of conduct focus on

the “do not’s” rather than on
affirmative obligations. That is, they
detail specific actions in which
employees are not to engage.
Corporate
Culture
Corporate Culture

• The assumption, beliefs goals,

knowledge and values that shared by
organizational members.
• Such values and beliefs, when
supported by various operating norms
and rituals, can exert a decisive
influence on the overall ability of the
organization to deal with the challenges
that it faces. (Morgan, 1997)
The Notion of
Organizational
Culture
The Notion of Organizational
Culture

• The idea here is the organizatons are

integrated and controlled through
informal non-structural means –
shared values beliefs understandings
and norms.
The Notion of Organizational
Culture

• Culture in this sense contributes to

the avoidance og fragmentation,
conflict, tension and other miseries.
• Culture is the “social glue” that holds
members together in an
organizational-wide consensus. (Siehi
and Martin, 1990)
Creating an
Ethical
Corporate
Culture
Creating an Ethical
Corporate Culture

• Organization exhibiting what we call

a culture of character as those that
possess the following four stylistic
markers:
Creating an Ethical
Corporate Culture

1. They are at ease interacting with

diverse internal and external
stakeholder groups. The ground rules
of these firms make the good of these
stakeholder goups part of the
organization’s own good.
Creating an Ethical
Corporate Culture

2. They are obssesed with fairness. The

ground rules emphasize that the other
person’s interests count as much as
their own.
Creating an Ethical
Corporate Culture

3. Responsibility is individual rather

than collective, with individuals
assuming personel responsibility for
actions of organiztaions. These
organizations’ mandate that
individuals are responsible to
themselves.
Creating an Ethical
Corporate Culture

4. They see their activities in terms of

purpose. This purpose is a way of
operating that members of the
organization highly value. Purpose ties
the organization to the environment.
Creating
Corporate
Codes of
Ethics
 Creating
Corporate Codes
of Ethics
1. Adopt a code of ethics
2. Provide ethics training
3. Hire and promote ethical people
4. Correct unethical behavior
5. Take proactive stategy
6. Conduct a social audit
7. Protect whistle-blowers
 Creating
Corporate Codes
of Ethics
8. Empower the guardians of integrity
9. Assure commitment from the top
10. Communicate the standards of
conduct widely throughout the
organization and the industry
11. Designate an ethics officer with
clear responsibility for enforcing
ethical standards
 Creating
Corporate Codes
of Ethics
12. Establish a process for reporting
violations of ethical standards and
actively investigate all reported
violations
13. Assure due diligence by the
organization’s board of directors
14. Above all, lead by example