What is a Code of Conduct?

Compliance Knowledge Base | Code of Conduct

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

A code of conduct is a set of rules around behaviour for the employees to follow within an organisation. The code acts as a standard that staff need to meet so that they can know what is expected of them to produce a generally more efficient business.

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

There isn't someone breathing down your neck telling you to have a code of conduct, but there are definite benefits of having a concrete set of rules in place. Larger businesses typically have them to create consistency and stability within their bigger groups of employees, but small companies tend to go about their business without a formal code in place.

Having a code of conduct in place creates a good practice for several reason within a business, whatever the size

  • It helps define the company culture quickly
  • It sets standards and expectations for employees to follow when it comes to their behaviour
  • It lets 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
What is a Code of Conduct?

The Need for a Code of Conduct

Employers might want to believe that their staff know what's right and wrong, but by having a code of conduct you can spell out whether specific behaviour or action is acceptable or not, making everyone's lives a bit easier. Having rules to follow gives employees a structure from day one, making the whole process much more black and white if trouble is caused. There should be no ambiguity about a policy because this can lead to rules being bent, contradicting the whole point of the code in the first place.

As well as setting out the rules, 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 violation.

The code sums up what you should and shouldn't be doing at work. This could include detailing the behaviour that must be prevented:

  • Taking shortcuts in your work to get the job done quicker, which could lead to adverse side-effects
  • Treating people disrespectfully due to their race, gender, social class or religion. This is known as workplace discrimination
  • Using business resources for personal use, because if you were to "borrow" money for personal use without authorisation, you are essentially stealing from the company

By having a set of rules for your business to follow, it makes everyone's lives easier in the long term. Not only does it have a positive impact on the workforce, but your brand image is enhanced, bringing in more customers ready to bring you their business.

What Makes a Good Code of Conduct?

A code of conduct reflects an organisation's daily operations, their core values and overall company culture. Writing a code of conduct requires a thorough understanding of the company, its culture and their vision. This all means that every code is unique to the business it represents. It also means there isn't one set code of conduct that every company can implement, but there are certain characteristics that all companies should include.

  • Written for the reader: It's easy to understand and explains any technical/legal jargon.
  • Comprehensive: It covers all areas that impact the daily lives of employees and answers any questions that come up.
  • Supported by leadership: It has the backing of the senior management team, and you can usually tell this by a foreword from the CEO or President.
  • Accessible: It is available to all employees and investors.


The popular fizzy drink company has a code of conduct that reveals a clear, unifying theme: integrity. This theme acts as the foundation for every component of their code, including rules about the use of company assets and information, conflicts of interests, and dealing with external stakeholders and partners.

By embedding one of its core values into its code of conduct, Coca-Cola is able to demonstrate its strong commitment to the business standards it has developed.

The code also outlines necessary definitions, disciplinary action standards and additional resources that may benefit employees, as well as being generally well organized and designed, easy to understand and comprehensive.

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