A code of conduct tells a story about the company’s level of commitment to ethical business practices and ability and willingness to be held accountable – or it does not.

Like it or not, your company’s code of conduct ‘talks’ about your company — it tells a story about what the company believes it and cares about, what it is truly committed to and the way it can be expected to act.  For this reason, a company should pay close attention to the story it is telling through its code. The best of codes serves as strategic communication that effectively conveys a company’s commitment to act responsibly and accept accountability for doing so.

Now, a company’s stakeholders are turning to the company’s code of conduct to learn about leadership’s attitude about ethics and compliance. How does leadership view ethics and compliance? Are the leaders committed to responsible business practices? In what ways do they support this commitment? These questions – and more – might be understood through a code of conduct – in what it ‘says’ through what it does and does not address and the way it addresses its content.

What stories are these codes telling? Lackluster codes speak volumes — largely about what the company appears to not care about.  Such codes communicate the bare minimum about ethics and compliance responsibilities – and their readers are right to expect as much from the company.

Conversely, great codes tell a story about a company strongly committed to responsible conduct, its leadership’s reinforcement of key messages, the relation of ethics and compliance to the company’s culture and success, the systems it maintains to help ensure ethical conduct and the steps it plans to take to demonstrate accountability for its actions.
Key elements of a code of conduct that “talk” to readers include the following:

• Accessibility
• Contents
• Style

If you want a quick ‘tell’ as to a company’s attitude toward ethics and compliance, review the code’s table of contents. A contents page serves as a quick ‘giveaway’ to a company’s commitment to ethics and compliance. (If the code does not have a contents page, that may say something else — such as that it is not terribly interested in helping employees locate needed information).  A contents page that displays a very limited number of topics suggest that the company’s leadership believes that only a limited set of business activities have ethics implications.  Better codes’ content pages tend to list a broad array of business activities, reflecting leadership’s understanding that ethics figures into all of them.

Other content that the code may or may not contain can shed further light on the company’s commitment. Many codes still stop at the basic U.S. Sarbanes-Oxley or stock exchange content requirements. The best codes go much further.  They provide information about the company’s ethics and compliance systems that support preventing, detecting, mitigating and correcting problems. Content may include the ethics and compliance program structure, overall responsibilities for employees, managers and even executives, investigative and disciplinary procedures, and even approaches the company uses to correct problems and make restitution for improper conduct. This information is important because it underscores the company’s commitment to promote responsible conduct and address misconduct, and it lets employees know that the company will support their own efforts to seek advice or report suspected misconduct.

This article is available in full at Corporate Compliance Insights.