Create and evaluate a Code of Conduct
A corporate Code of Conduct, sometimes also refered to as Code of Ethics, helps a company to show to all involved parties, internal and external, the standards that govern its conduct, thereby conveying its commitment to responsible practice wherever it operates.
As you know, there have been many recent legal and paralegal initiatives to promote or require good conduct by corporations. Because there are now so many of these guidelines, it is not simple to get an overview, so that you're able to quickly assess if your firm's Code of Conduct is 'worldclass'. A useful article in the HBR of Dec 2005 by Professors Lynn Paine, Rohit Deshpandé, Joshua D. Margolis, and Kim Eric Bettcher may help: it provides a useful overview of all (?) things that should be considered in any Corporate Code of Conduct.
The authors suggest 8 governing ethical principles which taken together they call: The Global Business Standards Codex (GBS Codex). These 8 principles to create or evaluate a Code of Conduct and their most important aspects are:
- The Fiduciary Principle (Diligence, Loyalty).
- The Property Principle (Protection, Theft).
- The Reliability Principle (Contracts Premises, Commitments).
- The Transparency Principle (Thruthfulness, Deception, Disclosure, Candor, Objectivity).
- The Dignity Principle (Respect for the Individual, Health and Safety, Privacy and Confidentiality, Use of Force, Associatiation & Expression, Learning & Development, Employment Security).
- The Fairness Principle (Fair Dealing, Fair Treatment, Fair Competition, Fair Process).
- The Citizenship Principle (Law & Regulation, Public Goods, Cooperation with Authorities, Political Noninvolvement, Civic Contribution, .
- The Responsiveness Principle (Addressing Concerns, Public Involvement).
The article itself is already a summary of regulations and best practices. So if you want to assess or create a Corporate Code of Conduct, you are advised to read the article completely.
2 Comments:
Thanks for these valuable thoughts about the Harvard Codex. I agree with you that, in a compliance climate that has few universal standards, the Codex is a particularly useful benchmarks for organizations as they re-consider the parameters of their codes.
I have a brief synopsis about the Codex on my blog, EthicNet.com, at:
http://ethicnet.typepad.com/ethicnet/2006/09/standards_harva.html
I also agree (to a point), regarding your interchangeable use of the terms “code of conduct” and “code of ethics”. Yes, these terms are synonymous to many, but there is a clear trend toward the increasing segregation of “compliance” (rules…what employees must do…a code of conduct) from “ethics” (values…what employees should do…a code of ethics).
This trend is manifesting in companies establishing distinct compliance and ethics functions that, among other activities, are promulgating separate codes.
On the other hand, there are those organizations (many) that are unifying their compliance rules and ethics values into a single code of conduct, acknowledging a key principle of effective compliance and ethics programs…namely, a uniform standard of conduct for all employees.
Thanks for the great summary of the Global Business Standards Codex. The only thing I would add is probably somewhat obvious: many of the company values grouped under these standards need to be customized to the particular business/industry. For example, an international service company has a concern with money laundering and bribery of government officials, whereas a company with no international operations may not face these issues. Thus, I think the way that the professors made the standards somewhat generic is helpful for comparing one's COBE to what is considered a world-class COBE. But I would also suggest that any company looking to drafta or revise its COBE get an idea of what other companies in its line of business include in their COBE.
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