Why is a code of conduct important?

Compliance Knowledge Base | Code of Conduct Training

Posted by: India Wentworth Published: Fri, 31 Aug 2018 Last Reviewed: Fri, 31 Aug 2018
Why is a code of conduct important?

Whatever your business type or size, all organisations should have a code of conduct. It serves not only as a set of internal guidelines for the employees to follow, but also as an external statement of corporate values and commitments.

A well-written code of conduct clarifies an organisation's values and principles, linking them with standards of professional conduct when it comes to the behaviour of the employees. As a result, codes of conduct set the benchmarks for companies to live up to.

Additionally, a code can support employees in general decision making by giving them a structure to follow when it comes to company behaviour, allowing them to be prepared to handle ethical dilemmas in the workplace. It can also serve as a valuable reference for potential customers and clients by letting them know your values as a business, and as a result a healthy business relationship can flourish.

As you can see, a code of conduct can benefit not only the employees within the business, but also improve your brand image, in both cases highlighting the benefit it has on the company and stressing the importance as a result.

Why is a code of conduct important?

What is a Code of Conduct?

A code of conduct is a set of rules within a business tackling the issue of staff behaviour. The code sets the standards that employees need to meet within the working environment, producing an efficient working business as a result.

The majority of larger businesses have a code of conduct already, but smaller companies tend to go about their business without a formal code in place. However, whatever size of company, a code of conduct should be a must-have.

Having a code of conduct can give employees a structure to follow from the moment they join the company, reducing the chances of problems coming up, but also making the process of dealing with issues a lot easier should the worst occur. There should be no ambiguity when it comes to a code of conduct, because as soon as lines are blurred, rules can be broken.

As well as setting rules to follow, the code of conduct can let employees know what they need to do if they ever need to report a violation of company policy and lets them know the consequences of using false information.

Employees have a greater understanding of the business rules by having a code of conduct to follow, making life a bit easier for all parties involved. It improves the working situation for staff and promotes your business values too, attracting customers in the process.

Contents of a Code of Conduct

Every code of conduct has to reflect the business it represents. This is because it reflects the daily operations of the company, their core values and the general company culture. This need for it to be tailored to the business means that there isn't one set code of conduct that every company can use. 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 including a foreword from the CEO or President.
  • Accessible: It is available to all employees and investors.

The code sums up what you should and shouldn't be doing at work. This could include explaining to employees that they shouldn't:

  • Take shortcuts to get the job done quicker, as they could cause adverse side-effects as a result
  • Discriminate against people within the business. This could be due to their race, gender, social class or religion and is known as workplace discrimination
  • Use business resources for personal use


Pepsi's global code of conduct is an extensive document that covers a variety of topics including the responsibilities of the individual employees, the level of expected respect in the workplace and responsibilities of the company to its shareholders. As a massively successful company, Pepsi has ensured that its code of conduct is easy to understand and clear in the expectations they have of their employees.

As with any strong code of conduct, Pepsi's code has rooted its expectations in the core values of the organization. They also explain how the code is administered by including information on investigations relating to misconduct and disciplinary actions the company may take. Their code of conduct also encourages employees to report bribery, violence or other misconduct by contacting the company's hotline, creating a transparent environment as a process.

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