Why is a code of conduct important for your business?

Code of conduct refers to the guide that outlines a business’s vision, rules, values and ethical principles. It is essential to have a code of conduct within an organisation and to require employees to familiarise themselves with it. This is because a code of conduct clearly and explicitly highlights what is expected of employees in regard to their behaviour inside and outside of the company. It acts as a benchmark for employee performance and actions.

The code of conduct should be written in a simple manner so it is comprehensible to every individual and it is easy to read. It needs to be part of the employees’ handbook as it covers every department within a business and it establishes a mutual understanding of what the company’s mission is.

What is included in a code of conduct?

It can cover intellectual behaviour, interactions between colleagues as well as interactions between employees and competitors, workplace misconduct and disciplinary action. It can also cover the dress code to ensure that employees do not dress differently: for example, whether to wear casual or formal attire. The code of conduct can also include the expected attendance of employees and use of equipment and technology as well as confidentiality requirements. It should highlight how the company handles bullying and harassment along with discrimination. These make up only a small part of what is included.

Why is a code of conduct important?

Every company is different. It has its own beliefs, values and culture. Every employee is different, they come from different work backgrounds, companies and have developed their own set of behaviours. A code of conduct helps keep all individuals within an organisation to the same standard. The rules within it are to be followed by everyone within the business regardless of their differences.

By outlining what is unethical and what misconduct is, employees are less likely to breach the code of conduct. They know what counts as inappropriate behaviour and avoid it, reducing workplace conflict as a result. This assists employees with their careers as it keeps their history clear of problems and helps them advance within the company and externally. Employees learn to avoid behaviours such as breach of confidentiality and disrespect of co-workers as they know it goes against the company’s values.

The code of conduct highlights the structure of the business and the roles and responsibilities of each member. This assists employees in knowing how to avoid issues with their team. When they familiarise themselves with the code of conduct they can better communicate with their colleagues as there is expected behaviour from both parties. This also builds loyalty towards the organisation as a lack of issues with co-workers leads to a healthier work environment. It also benefits the company in terms of productivity.

A good code of conduct helps protect the business from a reputational point of view as well. As it sets out the standards for interaction between employees and clients, stakeholders and competitors, society forms a positive opinion of the company. Respectful and ethical behaviour of employees reflects on the company and encourages it to be seen as ethical and respectful as well. It avoids negative publicity and improves the reputation of the business.

Consequences of poor code of conduct

For a code of conduct to be effective, it needs to be written correctly. If the code of conduct is lacking in one area, it could cause scandals and problems. Vague language could lead to the wrong interpretation of a rule or right and create a negative perception of the organisation. It could make the employees feel needlessly restricted in what they can and cannot do or say and make them feel trapped.

 It is crucial to remember that even though a code of conduct exists it does not mean that every employee will follow it. This is why disciplinary action should be outlined in the case of a code of conduct violation or misconduct. It will act as an example that anyone who behaves in an inappropriate manner and goes against the company’s values will receive a warning or corrective action. If the code of conduct is not enforced by the company it suggests to employees that they can do whatever they want without consequences for unethical or disrespectful individuals. 

 If the code does not explicitly state that the rules and principles apply to every individual it can cause lower-level employees to feel unfairly treated. It can make them feel targeted if they have to follow a set of standards higher management chooses to ignore or breach. This creates a feeling of inequality that can cause misunderstandings and low productivity and profits and it creates conflict within the organisation. The code of conduct needs to be written in a way that is inclusive of everyone no matter their standing and the wording of it plays a critical role in avoiding confusion. 

Why is it important to update the code of conduct?

 The code of conduct should be reviewed as often as the business thinks is necessary. During those reviews, it is important to check whether updates are necessary. Society changes constantly and the code of conduct should be changed to reflect those changes and make every employee feel included and heard. It should highlight how the company is moral and progressive and pays attention to ongoing issues. If the company sees that there is a new issue that the code of conduct does not cover then it should be updated to include the issue and similar problems that may occur in the future. 

The code of conduct should be updated to include new rights of employees within a business and new plans for disciplinary action. The company should constantly look at its management and adapt it to the new expectations of society. If it deems that its corrective procedures are not morally acceptable by the employees or the community, then that is a good indication that the code of conduct needs to be amended.

It is also crucial to receive feedback on the code of conduct from employees. Not only in terms of ethical principles but things like vague statements and readability. It could be that language used by previous CEOs, directors or senior management is not easily understandable by new employees. By receiving suggestions for improvement from employees the company makes them feel included and valued and creates a better work environment for everyone.

Overall it is important to remember that a code of conduct needs to be reviewed for the company to maintain a good relationship with its external and internal stakeholders and uphold clear and ethical values.