Ethics in Business

by Simon Webley

An ethics programme

Developing and then implementing an ethics code within an organisation requires the involvement of many people if it is to be done well. This means that it is not a trivial exercise and needs solid board backing and commitment. This page sets out the practical steps required to develop a code of ethics, and then implement it.

Process overview

  1. The board of directors agrees that a statement of corporate values and a code of ethics are required. Corporate values and ethics are matters of governance. Unless a member of the board is prepared to drive the introduction of a business ethics policy, the chances of it being a useful tool are not high.
  2. The board asks a senior manager to develop the statement of values and code of ethics.
  3. The senior manager consults with board members about core values. If the company does not have established core values, identifying them must be the next step (see the topic on Corporate Values).
  4. Consult with other businesses and experts about best practice.
  5. Find out what other issues need addressing. Merely endorsing a standard code or copying that of another company will not suffice. It is important to find out the topics on which employees require guidance.
  6. Collate existing company policies on ethical issues. There may already be existing policies concerning matters such as bribery, discrimination, the use of company property by individuals or giving and receiving gifts, and these will be useful starting points for constructing the code.
  7. Pick a well-tested model (see Structure of a code of ethics).
  8. Work out an implementation programme (see Implementing a code).
  9. The senior manager produces the first draft of the values statement, corporate code of ethics and the implementation programme and
  10. Circulates it to senior management for comment
  11. Has comparisons made with other company statements and codes
  12. Organises cross company and all level ‘focus’ groups to comment on the draft
  13. Considers standardising against an outside benchmark
  14. Seeks comments from external experts, such as the Institute of Business Ethics.
  15. The final (draft) version goes to the board for approval.
  16. The code receives an initial trial: the draft code needs piloting, perhaps with a sample of employees drawn from all levels and different locations.
  17. The results of the pilot are fed back to the board and approval is sought for a final version to be used during implementation.
  18. When the final version has been approved, a programme of familiarisation and integration is set in motion (see Implementing a code).
  19. A review mechanism must be established. Managers should sign off on the code regularly. A review every three years is normal, with new issues addressed as the need arises. A code ‘master’ needs to be appointed, who should report to a board member or committee.