A code of conduct is an essential part of compliance best practice. Most companies have one. What exactly does it entail, and are you obliged to read and sign it?
Various organisations use a code of conduct – regulators like the Financial Conduct Authority, the civil service, industry bodies, individual companies and other organisations, and even schools.
New joiners need to acknowledge their understanding of and commitment to the code of conduct. But what exactly does that mean, and how might it affect your employment relationship?
Decoding the code of conduct culture
Per the Cambridge Dictionary, a code of conduct is "a set of rules that members of an organisation or people with a particular job or position must follow".
It outlines expected behaviours and responsibilities, links them to the organisation’s core values and standards of professional conduct and ensures transparent working practices. It can cover anything from diversity and inclusion guidelines and compliance and legal duties to gifts and entertainment rules and social media expectations.
A code of conduct:
Sets clear expectations
Helps ensure legal compliance
Builds workplace culture
Protects the organisation
Guides decision-making
What’s the difference between a code of conduct and corporate culture?A code of conduct culture is a structured, compliance-driven environment based on explicit, written rules. |
Alongside a code of conduct, an organisation may publish a shorter, related document called a code of ethics.
While a code of conduct is an enforceable set of specific rules and obligations that clearly define unacceptable actions or behaviours, a code of ethics is a set of guiding principles that define an organisation’s moral position.
For example, a code of ethics might include statements such as, “he organisation is strongly opposed to bribery at any level of the supply chain.”
Meanwhile, a code of conduct could require all staff and contractors to participate in anti-bribery training, commit to the organisation's anti-bribery policy, and ensure ongoing, appropriate due diligence when dealing with any level of the supply chain.
Because a code of conduct is more explicit about expectations and obligations, it’s easier to enforce than a code of ethics. However, a code of conduct may incorporate all or part of the organisation’s code of ethics to contextualise its rules.
Given a code of conduct sets values and principles, it’s often as unique as the organisation itself. Nonetheless, certain components are generally regarded as universal.
A code of conduct should always specify who is covered by its provisions, and provide details or links to relevant reporting, complaints and disciplinary procedures.
Each section addresses a particular setting or behaviour. For example, it may have separate components for:Depending on the organisation, there may be more than one code of conduct covering different aspects. For example, you may have an employee code of conduct, alongside ones for suppliers, senior management and associates./connected third parties.
A code of conduct is widely considered an organic document that adapts over time, incorporating mechanisms for feedback and amendments. With that in mind, employees should reread it periodically.
When determining how to adhere to a code of conduct, start by establishing whether it applies to you. If it does, you most likely committed to it when you initially signed your employment contract, meaning you’re bound by its terms. To adhere, ensure you:
The code should be easily understood and accessible. The onus falls on the organisation to provide adequate training if needed.
Organisations should regularly monitor and audit code of conduct implementation. Feedback from employees helps refine them.
To enhance transparency, share audit results with stakeholders (respecting contributor privacy) and highlight metrics such as suspected breaches, reporting mechanisms, whether concerns were substantiated, and the company’s response.
Regular code reviews are also important to ensure changes in the law or the organisation’s policies or norms are incorporated.
A code of conduct is a powerful tool to help an organisation develop a strong compliance culture. It gives clear instructions on what they do and don’t permit. It also feeds into the company’s policies and procedures and highlights appropriate reporting channels.
Take codes of conduct seriously – read and ensure you understand them, and adhere to their provisions. Indeed, a company can face regulatory fines if a breach also violates external laws or industry regulations. To help prevent penalties, alongside encouraging employees to adhere to the code of conduct, organisations should:
They should also invest in training. For information about Skillcast and the services we offer, get in touch.
There isn’t a general legal requirement for every organisation to have a code of conduct. However, it can help set clear behavioural expectations, support compliance and demonstrate your approach to ethical conduct.
It may result in disciplinary action, depending on the nature and seriousness of the misconduct and the company’s policies and procedures. Serious breaches may impact an individual's employment or contractual relationship.
A code of conduct can apply to employees, directors, contractors, suppliers and other third parties, depending on how the business defines its scope. It should clearly state who is covered by its requirements.
A code of conduct translates an organisation's values into clear expectations for workplace behaviour. When it’s communicated, understood and consistently enforced, it can help employees make appropriate decisions and raise concerns about misconduct.
A code of conduct sets out broad standards and expectations for behaviour, while individual policies provide more detailed rules and procedures for specific areas such as conflicts of interest, data protection or anti-bribery.
There are numerous, including:
The Wolf of Wall Street – Jordan Belfort’s rise to riches through a financial scam. Covers unethical behaviour, such as financial misconduct, dishonesty and conflicts of interest.
The Loudest Voice in the Room – The rise and fall of Fox News CEO Roger Ailes. Covers workplace behaviour, sexual harassment and abuse of power.
Rogue Trader – Nick Leeson bankrupting Barings Bank in 1995 through fraud. Covers dishonesty, concealment, financial controls and individual accountability.
The Informant – Lysine price-fixing conspiracy in the mid-1990s. Covers competition law, conflicts of interest and the importance of reporting misconduct.
The Whistleblower – Kathryn Bolkovac's experience in post-war Bosnia as a UN peacekeeper with DynCorp. Covers ethical culture, safeguarding and the consequences of failing to protect people who raise concerns.
Philadelphia – AIDS discrimination lawsuits involving attorneys Geoffrey Bowers and Clarence B. Cain. Covers equality, discrimination and treating colleagues fairly.
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