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The Business Code of Ethics: A Decision-making Tool

Ethics is more than a moral issue. A strong code of ethics fosters employee commitment and supports appropriate decision-making, no matter what the context. It’s in an organization’s best interest to establish clear measures.

Ethical violations of any kind tend to have a snowball effect in a work environment. When employees see others breaking the rules without consequences, they might think it’s okay for them to do so as well. An organizational culture in which misconduct is tolerated can lead to increased turnover, decreased productivity, and even damage the organization’s reputation and profitability.

What situations require ethical rules?

An organization should have a comprehensive code of ethics that addresses all the scenarios that may affect it, including the following:

Harassment and discrimination

Harassment and discrimination are perhaps the most significant ethical issues affecting businesses today. It is imperative to protect employees from unfair treatment based on age, gender, race, religion, disability.

Fraud and other forms of financial manipulation

Organizations must maintain good accounting practices and avoid any real or perceived conflicts of interest. No organization wants to be caught up in a financial scandal.

Technology and privacy practices

Developments in artificial intelligence and technological security raise privacy concerns for both clients and employees. While electronic monitoring of employees is intended to ensure efficiency and productivity, it can sometimes border on invasion of privacy. With telework, confidential client information is being circulated outside the organization. How can this new dynamic be managed?

Social media whistle-blowing

Another challenge is knowing where to draw the line between firing or penalizing an employee over online whistle-blowing. Usually, it’s when the employee’s behaviour is considered disloyal to their employer. How does this play out in the real world?

What are the benefits of having and following a clear code of ethics?

Improved organizational image

A code of ethics promotes a positive public image by conveying values of integrity, respect for the environment, inclusion, etc.

Enhanced teamwork and cooperation

Introducing a workplace code of ethics helps to create consistent employee behaviour, which in turn promotes openness and trust. As a result, because employees know where they stand, they often perform better.

Safeguarded organizational assets

A clear code of ethics helps prevent theft or the fraudulent use of the organization’s resources.

Improved market positioning

Currently, environmental, social and governance (ESG) criteria are considered important. Organizations with ethical business practices are better positioned in the marketplace.

What should be included in a code of ethics?

A code of ethics should include a statement of the values shared by all staff members. It should also contain:

  • the rules and behaviours expected of everyone;
  • the mechanisms and measures to ensure compliance;
  • the penalties for non-compliance.

What should be done to ensure the code of ethics is clearly understood and applied?

Involve all parties

While it is helpful to have an ethics advisor help develop the code of ethics, it is also important to ensure that all stakeholders in the organization are represented: managers, executives, employees, etc. It is easier to have standards and values respected when they are chosen instead of being imposed from outside.

Draft a concise, specific code of ethics

Does anyone remember reading the employee handbook when they were hired? Keep the code of ethics concise and to the point in a page or two:

  • What does the code mean to employees?
  • Why is it important?
  • What does it mean for them in terms of procedures?

Be specific and avoid legalese. Tailor the code of ethics to the employees’ duties. Beyond common values, someone working in business development needs more specific or different rules than someone working in an assembly room, for example.

Focus on continuous development

Conduct several communication and awareness campaigns throughout the year, and use different media to present the information: short videos, real-life scenarios, focus groups, etc. Not everyone learns the same way.

Bring the code of ethics to life

  • Set up an integrity committee that employees can turn to and make sure that there is a follow-up.
  • Set up integrity lines where people can report concerns anonymously.
  • Communicate to staff the actions taken in response to misconduct.
  • Review the code regularly and adapt it when new ethical issues arise.

Establishing a clear code of ethics has become increasingly important in recent years. It is a key factor in dealing with major societal issues and ensuring the organization’s long-term viability. Do not hesitate to contact our experts for support in developing your code of ethics.

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