Tuesday, September 12, 2006

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:
  1. The Fiduciary Principle (Diligence, Loyalty).
  2. The Property Principle (Protection, Theft).
  3. The Reliability Principle (Contracts Premises, Commitments).
  4. The Transparency Principle (Thruthfulness, Deception, Disclosure, Candor, Objectivity).
  5. The Dignity Principle (Respect for the Individual, Health and Safety, Privacy and Confidentiality, Use of Force, Associatiation & Expression, Learning & Development, Employment Security).
  6. The Fairness Principle (Fair Dealing, Fair Treatment, Fair Competition, Fair Process).
  7. The Citizenship Principle (Law & Regulation, Public Goods, Cooperation with Authorities, Political Noninvolvement, Civic Contribution, .
  8. 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.

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