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 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 in response to specific ethical wrongdoings. Some were even mandated by the courts as part of larger legal settlements. Other professional codes of conduct, such as the Hippocratic Oath in medicine, have ancient origins. Codes have become very common, with essentially all major organizations and professional associations having some formal statement regarding ethics and values.

Ethical codes take a variety of forms. Some are very 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. Statements of core values or mission statements sometimes serve as the organization's formal declaration of ethics. Many organizations will have both general mission statements and specific codes of ethics. Codes are typically distributed to members of the organization, may be posted on Web sites, and in some cases, are prominently displayed throughout the organization. Codes are often formally adopted by the organization's board of directors or the professional association's legislative or executive body.

Codes also serve a variety of functions, including protecting the organization from legal liability, constraining and focusing employee behavior, limiting unethical conduct, assessing and judging member behavior, and enhancing the image and reputation of an organization or professional group. In the latter sense, ethical codes themselves may serve an issue management, image restoration, or public relations function. In addition, 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. Some organizations train new employees in the ethics code and use codes to socialize members into the organization's culture. 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 also designed to clarify issues of conflict of interest, loyalty, and obligations. Some provide checklists of questions to answer in making ethical decisions. Many of the more legalistic corporate codes require that employees sign a legally binding affidavit indicating that they have read and agree to abide by the code. Some organizations have established [Page 139]ethics officers or committees responsible for both promoting the code and enforcing its standards. Many organizations also use their codes or ethical guidelines to foster broader conversations about ethics and values. Richard L. Johannesen (2002) suggested that codes serve an argumentative function, “to stimulate public and professional scrutiny of major ethical issues” (p. 201). Many 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. Enron had an extensive ethics code that included explicit provisions about ethical communication. The code was posted on the company Web site and often quoted by senior executives. The Enron code obviously failed to prevent fundamental ethical misconduct.

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