How to Create a Code of Conduct That Truly Represents Your Company

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May 18, 2024 at 7:40AM UTC
A code of conduct, in general, refers to is a set of rules or guidelines that outline the expected norms and responsibilities of a person or company. It's important for companies to have a code of conduct in order to set expectations for the company culture.

What is a code of conduct in the workplace?

A code of conduct in the workplace refers to the same set of rules or guidelines that, instead of applying to an individual with morals, beliefs and values, applies to a company as a whole. The code of conduct for a whole workplace essentially sets the company culture in stone.

With a code of conduct, a company can come together on common ground about what is and is not acceptable in the workplace. Without a code of conduct, however, employees might not know what behaviors are and are not tolerated.

Externally, a code of conduct also serves several important purposes, according to the Ethics & Compliance Initiative:
  • Compliance: "Legislation (i.e., the Sarbanes-Oxley Act of 2002) requires individuals serving on boards and organizational leaders of public companies to implement codes or clearly explain why they have not."
  • Marketing: "A code serves as a public statement of what the company stands for and its commitment to high standards and right conduct."
  • Risk Mitigation: "Organizations with codes of ethics, and who follow other defined steps in the U.S. Sentencing Commission’s Federal Sentencing Guidelines, can reduce the financial risks associated with government fines for ethical misconduct by demonstrating they have made a 'good faith effort' to prevent illegal acts."

It's important to note, however, that a code of conduct and a code of ethics is different. Basically, a code of conduct is somewhat like a subset of the code of ethics, and gives those ethics real-life application (beyond philosophical situations).

"The code of conduct will give the code of ethics application in a variety of situations," according to Biz Fluent. "For example, there is a rule in the code of ethics that states that employees are supposed to obey the law at all times. This is a very general rule, and you need to know how it can be applied to a variety of situations. The code of conduct, then, will list which specific laws are meant to be obeyed in the organization’s operations and the industry in general. The employees will then know which laws are most important to their careers and will be better placed to obey these laws."

What should be included in a code of conduct?

A code of conduct should have several different facets included. The most common sections that most codes of conduct include are the following:
  • Values
  • Ethical Principles 
  • Accountability
  • Standard of Conduct (such as complying with the job description, committing to the organization and properly using the company facilities and properties like the computers and the given company email, etc.)
  • Standard of Practice (i.e. current policies and anything outlined in the business operational manual)
  • Disciplinary Actions (i.e. handling complaints and delineating penalties for code violations).

Developing, integrating and disseminating the code of conduct

Developing, integrating and disseminating the code of conduct takes work. Each company should come up with their own unique code of conduct that defines and represents the company and its values, expectations of employees and intentions.
After that, a company's code of conduct is published and given to employees,  to existing and potential stakeholders and to members of the board of directors, partners, vendors, potential employees, suppliers, customers and the general public). This helps to convey to all of the parties what the company is all about. In fact, the company might even decide to publish its code of conduct on its website and print it on annual reports to shareholders.

Examples of effective codes of conduct

Here are five examples of effective codes of conduct.

1. Apple

"Apple is committed to ensuring that working conditions in Apple’s supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible. Apple’s suppliers ("Suppliers") commit, in all of their activities, to operate in full compliance with the laws, rules, and regulations of the countries in which they operate. This Supplier Code of Conduct ("Code") goes further, drawing upon internationally recognized standards, in order to advance social and environmental responsibility.
Apple points out that all supplies must commit, as well.

"Apple requires that Suppliers implement this Code using the management systems described below. Apple may visit (and/or have external monitors visit) Supplier facilities, with or without notice, to assess compliance with this Code and to audit Supplier’s wage, hour, payroll, and other worker records and practices. Violations of this Code may result in immediate termination as an Apple Supplier and in legal action.
Apple also asks all suppliers to implement the same code.

"The Apple Supplier Code of Conduct is modeled on and contains language from the Electronic Industry Code of Conduct. Recognized standards such as the Universal Declaration of Human Rights (UDHR), and standards issued by organizations such as the International Labour Organization (ILO), Social Accountability International (SAI), and the Ethical Trading Initiative (ETI) were used as references in preparing this Code and may be useful sources of additional information. A complete list of references is provided at the end of this Code. As an extension of the Code, Apple maintains a series of detailed Standards that clarify our expectations for compliance."

2. Microsoft

"Suppliers and their employees, personnel, agents, and subcontractors (collectively referred to as “Suppliers”) must adhere to this Supplier Code of Conduct while conducting business with or on behalf of Microsoft. Suppliers must require their next-tier suppliers to acknowledge and implement the SCoC in their operations and across their supply chains. Suppliers must promptly inform their Microsoft contact, a member of Microsoft management, or the contacts provided at the end of this document when any situation develops that causes the Supplier to operate in violation of this Code of Conduct.
Microsoft's code of conduct is for employees, personnel, agents and subcontractors.

"All Microsoft Suppliers must conduct their employment practices in full compliance with all applicable laws and regulations and in compliance with Microsoft requirements, which may exceed local legal requirements. In all cases in which Microsoft requirements are more stringent than local legal requirements, Suppliers are required to meet the more stringent Microsoft requirements.
Microsoft expects that all of these parties self-monitor to meet these requirements.

"While Microsoft Suppliers are expected to self-monitor and demonstrate their compliance with the SCoC, Microsoft may audit Suppliers or inspect Suppliers’ facilities to confirm compliance. Suppliers that behave in a manner that is unlawful or inconsistent with the SCoC, or any Microsoft policy, risk termination of their business relationship with Microsoft. Complying with the SCoC and completing the SCoC training offered by Microsoft are required in addition to meeting any other obligations contained in any agreement a Supplier may have with Microsoft."

3. Nike

"Every supplier factory that makes products for NIKE, Inc. must meet a rigorous set of compliance requirements. Nike’s Code of Conduct lays out the minimum standards we expect each factory or facility to meet. Our Code includes standards related to hiring practices, wages, freedom of association and health and safety.
Nike thats that these are the minimum standards.

 "Nike’s Code of Conduct is an integral component to our sourcing strategy and how we determine the suppliers Nike will continue to engage and grow our business to create a lean, green and equitable supply chain.
Nike also regularly assesses and reviews its code of conduct.

 "We regularly review supplier factories to assess their ability to meet our high standards. These assessments take the form of audit visits, both announced and unannounced, by internal and external parties, who measure against the Code Leadership Standards and our Code of Conduct."

4. Adidas

"This Code of Conduct expresses our company values alongside other information, guidance and additional resources in order to allow understand how ethical and compliant decisionmaking is essential at adidas. It is applicable for all employees, managers, officers and Executive Board members of the company and its affiliates who are obligated to live up to the high expectations that we set ourselves in the Code of Conduct. They must also certify their compliance with our Code, and disclose any potential conflict of interest or any other possible exception to compliance with the Code. Applicable as of October 1, 2014."
Adidas adds that this is only one resource that expresses its values. It also asks that its affiliates comply with the code.

5. Verizon

"We have work because our customers value our high-quality communications services. We deliver superior customer experiences through our products and our actions. Everything we do we build on a strong network, systems and process foundation. The quality and reliability of the products we deliver are paramount. Customers pay us to provide them with services that they can rely on.
"We focus outward on the customer, not inward. We make it easy for customers to do business with us, by listening, anticipating and responding to their needs. We know our products and can explain them to customers. We focus on fundamental execution. We are accountable and we follow through with a sense of urgency. We know that having the highest ethical standards is a competitive advantage.
Verizon vows to put the customer first.
"We know teamwork enables us to serve our customers better and faster. We embrace diversity and personal development not only because it’s the right thing to do, but also because it’s smart business. We are driven not by ego but by accomplishments. We keep our commitments to each other and our customers. Our word is our contract. We respect and trust one another, communicating openly, candidly and directly since any other way is unfair and a waste of time. We voice our opinion and exercise constructive dissent, and then rally around the agreed-upon action with our full support. Any one of us can deliver a view or idea to anyone else, and listen to and value another’s view regardless of title or level. Ideas live and die on their merits rather than where they were invented.
"We believe integrity is at the core of who we are. It establishes the trust that is critical to the relationships we have. We are committed to do the right thing and follow sound business practices in dealing with our customers, suppliers, owners and competitors. Our competitors are not enemies; they are challengers who drive us to improve. We are good corporate citizens and share our success with the community to make the world in which we work better than it was yesterday.
Verizon also vows to share its success with the community.

"We know that bigness is not our strength, best is our strength. Bureaucracy is an enemy. We fight every day to stay “small” and keep bureaucracy out. We are more agile than companies a fraction of our size, because we act fast and take risks every day. We see crisis and change as opportunities, not threats. We run to a crisis, not away. Change energizes us. We work hard, take action and take personal accountability for getting things done. Our actions produce measurable results.
"Everything we do is built on the strong foundation of our corporate values. We work 24x7 because our customers depend on us 24x7. We know our best was good for today. Tomorrow we’ll do better."

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