Code of Ethics and Code of Conduct - What's the Difference?

Code of Ethics and Code of Conduct - What's the Difference?

Code of Ethics" and "Code of Conduct" are often mistakenly used interchangeably.

They are, in fact, two unique documents. Codes of ethics, which govern decision-making, and codes of conduct, which govern actions, represent two common ways that companies self-regulate. They are often associated with large companies, and provide direction to employees and establish a public image of good behavior, both of which benefits businesses of any size.

However, any company large or small, public or private, will benefit from having a set of documented rules in place where employees and other stakeholders can reference to ensure they are performing in their positions as expected by the company.

Code of Ethics:
Sometimes referred to as a value statement, it behaves like the "Company's Constitution" with general principles to guide employee behaviour. The document outlines a set of principles that affect decision-making. For example if an organization is committed to protecting the environment and "being green", the code of ethics will state that there is an expectation for any employee faced with a problem, to choose the most "green" solution. It works on the bases of "treat others as you would like to be treated." When faced with ethical dilemmas or debatable situations, what's articulated in the code of ethics can help guide decision making.

Code of Conduct:
Provides the meat and potatoes to the code of ethics. A code of conduct applies the code of ethics to a host of relevant situations. A particular rule in the code of ethics might state that all employees will obey the law, a code of conduct might list several specific laws relevant to different areas of organizational operations, or industry, that employees need to obey.

The code of conduct outlines specific behaviours that are required or prohibited as a condition of ongoing employment. It might forbid sexual harassment, racial intimidation or viewing inappropriate or unauthorized content on company computers. Codes, along with other measures, have helped some companies dig themselves out of scandals, and have helped many companies build a healthier work climate and reputation.

An example of an ethical dilemma that employees regularly come face to face with is gift giving and accepting. This can sometimes be a bit of a tricky situation to navigate because in some cultures small gifts are tokens of respect and gratitude. Acceptance of large gifts may produce the appearance of an improper relationship between the company and the recipient, and vice versa. Work with management while consulting the code to come to a generally accepted resolution.

Both a code of ethics and a code of conduct are similar as they are used in an attempt to encourage specific forms of behaviour by employees. Ethics guidelines attempt to provide guidance about values and choices to influence decision making. Conduct regulations assert that some specific actions are appropriate, others inappropriate. In both cases, the organization's desire is to obtain a healthy range of acceptable behaviors from employees.

With similarities, comes differences. Both are used in an attempt to regulate behavior in very different ways. Ethical standards generally are wide-ranging and non-specific, designed to provide a set of values or decision-making approaches that enable employees to make independent judgments about the most appropriate course of action. Conduct standards generally require little judgment; you obey or incur a penalty, and the code provides a fairly clear set of expectations about which actions are required, acceptable or prohibited.

Working Together:
Bigger organizations sometimes have both codes in separate formats, or they are sometimes combined into one general Ethics document that blends principles for the right action with a list of actions that are required or forbidden.

For The Smaller Business:
Many smaller businesses can survive without a formal code of ethics or code of conduct. For example if a business has 1-10 employees, generally everyone is talking with each other and interacting with each other every day. So communicating appropriate behaviour is much easier. However, as smaller businesses grow their employee numbers, ethical hazards and risks can increase, so having these documents can help shape cultural expectations about behaviour, and they also serve as a solid marketing tool for potential business partners or clients.

Either way, it's critical that these documents are treated consistently in every instance of wrongdoing. The code needs to apply to every employee from the ground up, and no matter how small the violation, appropriate discipline needs to take place. For example, if your code stipulates that theft of company property is prohibited, and an employee takes home one pack of post-it-notes from the supply inventory, that's theft, and should be treated as such.

We believe that a great code and a strong company culture is the heart of a successful organization. These documents help employees understand how they can feel good about being contributing members to the company's future success. An organization's culture differs from industry to industry, and there's no one-size-fits-all solution for building and adopting a strong organizational culture. Tools to help manage the expectations of employees, and gather information on actions that challenge the code will help to build and strengthen the internal culture. Contact us to learn more about how we can customize an ethics reporting solution that can speak to your organizational code and culture. 

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