Formulating a Code of ethics
Formulating a Code of ethics

The following Risk & Compliance guidance note provides comprehensive and up to date legal information covering:

  • Formulating a Code of ethics
  • Ethics and business ethics
  • Why is ethical behaviour important for businesses?
  • Ethics and in-house lawyers
  • What is a code of ethics and why is it important?
  • The content of a code of ethics

Ethics and business ethics

Ethics are the moral principles guiding our behaviour and judgments, helping us to determine what's right and wrong.

Ethics and the law, although related, are not the same thing. The law sets out the minimum compulsory standard of behaviour, while ethics goes beyond this and implies a higher standard of conduct.

Business ethics concern the application of ethical values to business activities and functions. This applies both to the conduct of individuals and that of organisations as complete entities. Business ethics has emerged in the wake of the social responsibility movement connected to a growing public interest and awareness of consumerism and the environment. Business ethics and corporate responsibility have been embraced by a number of large corporations in an attempt to improve their image and this has set the tone for business as a whole.

Any organisation can aim or choose to carry out its business in an ethical manner. This involves making choices that are ethically the right thing to do, rather than focussing on short-term profit generation.

Whether or not an organisation is considered ethical will involve a combination of factors, eg:

  1. the type of products or services

  2. priorities, goals and values

  3. reputation

  4. treatment of staff and customers

  5. corporate social responsibility (CSR)

There's also a difference between doing ethical things and doing things ethically. The latter is