IT Governance

Corporate Ethics Code or Code of Conduct: What’s Crucial?

Code of ethics and code of conduct outline rules for proper behavior in the workplace—based on the company’s core values. They offer guidance on how employees must behave and handle harassment, safety, and other issues. A code of ethics for a business is often broader than a code of conduct which discusses how employees must act in a specific situation. So, does your organization need a corporate ethics code, a code of conduct, or a combination of both? In this article at, Chad Brooks explains the difference between both concepts and discusses how they improve your company culture.  

Corporate Ethics Code vs. Code of Conduct

Any company, large or small, private or public, will benefit from having a set of documented rules in place. Employees and stakeholders can refer to these regulatory guidelines to ensure they are performing in their position as expected by the company. The code of ethics and code of conduct are two different documents, although many assume they are the same. Take a look at some of the differences:

  • A corporate ethics code is a set of principles based on morals and values by which an enterprise makes decisions about what is right and wrong. On the other hand, a code of conduct is a set of rules and regulations that describe the appropriate behavior in specific situations.
  • Ethics focus on values, while conduct focuses on rules and compliance.
  • The corporate ethics code has a narrower scope than the code of conduct.
  • The code of conduct is accessible to employees, while business ethics are publicly disclosed.

Why Do You Need a Combination of Both?

Many organizations have both codes in separate formats, or they are sometimes combined into one general ethics document containing a list of required and forbidden actions. Combining a corporate ethics code and code of conduct has several benefits.

  • It offers “legal protection against actions that exploit gray areas or other ill-defined practices,” says Brooks.
  • It promotes an environment of respect based on integrity. When people understand the code of conduct and ethics and follow it, it creates an atmosphere of trust and respect among employees.
  • It enables organizations to build public trust and enhance their reputation. The code also helps enterprises demonstrate their values to socially responsible investors.
  • It helps the company communicate its expectations to the staff, suppliers, vendors, and customers. Companies can also use the code to encourage employees’ frequent, honest, and open communication.

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