Codes of Ethics

A code of ethics is a formal statement of conduct or a set of rules, standards, or guidelines for appropriate member behavior that has been adopted by an organization or professional association. Ethical codes, such as General Motor's Winning with Integrity and Microsoft's Standards of Business Conduct, have been popular in organizations since at least the 1970s. Codes of ethics were originally created by many organizations and professional associations in the 1950s and 1960s partly in response to specific ethical wrongdoings. Some were even mandated by the courts as part of larger legal settlements. Codes are associated with professions, such as law, marketing, accounting, and counseling. Some professional codes, including the Hippocratic Oath in medicine, have ancient origins.

Ethical codes take a variety of forms. Some are specific legalistic documents with a mechanism for enforcement and signature pages requiring that the employee explicitly agree to abide by the code. Others are very general statements of values or principles that the organization or association aspires to with no specific enforcement provisions. Some codes include vignettes or cases to illustrate ethical conduct and assist in training. Statements of core values or mission statements sometimes serve as the organization's formal declaration of ethics. Codes are typically distributed to members of the organization, may be posted on websites, and in some cases, are prominently displayed throughout the organization.

Codes serve a variety of functions, including protecting the organization from legal liability, constraining and focusing employee behavior, elevating the levels of conduct and limiting unethical behavior, assessing and judging member behavior as a defense against criticism, and enhancing the image and reputation of an organization or professional group. In the latter sense, ethical codes themselves may serve as an issue management, image restoration, or public relations function. Codes also help communicate value positions and ethical standards to stakeholders and facilitate discussions regarding appropriate organizational or professional ethics and values. In this way, codes are often the most important and explicit means whereby organizational and professional values are communicated. It is relatively common, for example, for all new employees to receive copies of ethical codes. Codes and ethics programs are related to improved ethical climate and are particularly important during times of uncertainty, transition, and even crisis.

Ethical codes and guidelines function in part by explicitly clarifying issues of responsibility and accountability. Many corporate codes are designed to clarify issues of conflict of interest, loyalty, and obligations. Increasingly, corporate codes discuss issues of corporate social responsibility and identify larger obligations to society, the environment, communities, and other stakeholders. Some organizations have established ethics officers or committees responsible for both promoting the code and enforcing its standards. Richard L. Johannesen (2002) suggested that codes serve an argumentative function, “to stimulate public and professional scrutiny of major ethical issues” (p. 201). Codes, for example, discuss the value of a good or ethical reputation and encourage members to interact in a professional and responsible manner with external stakeholders. Ethical codes and value statements, however, should not be seen as panaceas for ethical communication in organizations or among professionals.

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