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What does Code of Conduct Mean?

Compliance Knowledge Base | Code of Conduct

Posted by: India Wentworth Published: Fri, 31 Aug 2018 Last Reviewed: Fri, 31 Aug 2018
What does Code of Conduct Mean?

Code of conduct means having a set of rules within a business dealing with the topic of staff behaviour. The code sets a standard that employees need to meet so that they can know what is expected of them to produce an efficiently working business.

Often mixed up with a code of ethics, the code of conduct refers specifically to behaviour, whilst a code of ethics provides guidance on the decision-making skills that your employees need when they are working.

What are the Benefits of Having a Code of Conduct in Business?

There is no law telling you that you have to have a code of conduct, and although the majority of larger businesses have a code of conduct to guide their employees, smaller companies tend to go about their daily business without a formal code.

However, having a code of conduct in place is good practice for several reasons within a business, whatever the size! A code of conduct can:

  • Define the company culture
  • Set standards and expectations for employees to follow when it comes to their behaviour
  • Let customers and partners know your values, and from there they can work out if they want to work with you – creating a level of transparency for a healthy business relationship

Having a code of conduct can make it clear what behaviours and actions are acceptable within the business. These rules give employees a structure from day one of being part of the business, making the whole process much clearer if problems do come up. There should be no ambiguity when it comes to a code of conduct, because as soon as lines are blurred, rules can be broken.

A code of conduct also explains what employees need to do if they ever need to report a violation of company policy, as well as showing staff what the consequences are of using false information in an attempt to conceal the violation.

The code sums up what you should and shouldn't be doing at work. For example, forbidding employees from:

  • Taking shortcuts to get the job done quicker, causing adverse side-effects as a result
  • Discriminating people within the business. This could be due to their race, gender, social class or religion, known as workplace discrimination
  • Using business resources for personal use

By having a set of rules for your workforce to follow, it makes everyone's lives easier by knowing what is expected of them. Not only does it have a positive impact on the employees, but your brand image is enhanced, a factor that will attract more customers that can bring you their business.

What does Code of Conduct Mean?

What Makes a Good Code of Conduct?

Every code of conduct is unique to the business it represents. This is because it reflects the daily operations of the company, the core values and the overall company culture. The need for it to work closely with the business means that there isn't one set code of conduct that every company can implement. However, there are certain characteristics that all companies should include:

  • Written for the reader: It's easy to understand and includes an explanation of any technical/legal jargon.
  • Comprehensive: It covers all areas that impact the daily lives of employees and answers any questions that they may have.
  • Supported by leadership: It has the backing of the senior management team (you can usually show this by the inclusion of a foreword from the CEO or President).
  • Accessible: It is available to all employees and investors.

Starbucks

The Starbucks Standards of Business Conduct outlines the principles and values that Starbucks aims to uphold as a company. The document details the organisational expectations in the working environment, their business practices, as well as indicating where employees can go to when they need assistance or more information.

Their code of conduct also excels in answering the questions that employees have when facing uncertainty. These answers help readers understand how they should act in certain situations and why that behaviour reflects the standards that Starbucks set.

Additionally, Starbucks includes a unique ethical decision-making framework when employees are faced with ethical dilemmas in the workplace.

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