What is a code of ethics?

A code of ethics is a set of guiding principles businesses use to define their

moral character, make important business decisions and establish clear moral
expectations for those within their company. Ethical codes promote a
company's values and inform the choices of its members. A chief executive
can assess their decisions against the code of ethics to determine if their
actions support the overall mission of the company. Some industries, like
healthcare, law and finance, have legal rules along with ethical guidelines, so
companies within these industries incorporate legal compliance into their
codes of ethics.

Here are some examples of items you might see in a company's code of
ethics:

 Kindness: A company's code of ethics might remind employees to treat

one another with respect and kindness, remembering their commitment
to teamwork and mutual support.
 Integrity: The code of ethics could also include an article about its
followers' moral character, saying those within the company should
practice integrity in their actions and decisions.
 Equality: Companies with a commitment to equality might promote
fairness in their work environments and aim to create welcoming spaces
for everyone within their organization.

What is a code of conduct?

A code of conduct is a set of enforceable rules companies use to
communicate expectations and requirements for those within the company.
The code of conduct clearly defines which actions or behaviors are
unacceptable within their business. Most codes of conduct include policies
related to dress codes, employee interactions and company property.
Sometimes, companies include their code of conduct in the employee
handbook or training resources offered to employees at the start of their
employment. Some codes also define the consequences of code violations.
Here are some examples of items you might see in a company's code of
conduct:

 Dressing professionally: The code of conduct might specify attire

expectations and restrict certain choices in a dress code policy.
  Limited technology use: Many codes of conduct include rules about
technology, informing employees when it's acceptable to use their cell
phones or restricting internet access to things like social media sites
while on company computers or company time.
 Attendance: The code of conduct might explain consequences for
repeat tardiness or for absences without notice.

Code of ethics vs. code of conduct

Here are several key areas where codes of ethics and codes of conduct can
vary:

Enforceability

One area where the two codes vary is in their enforceability. Because codes
of conduct often explicitly list rules and policies, it's typically easier to measure
compliance. If an employee violates one of the company's conduct rules, they
could face disciplinary action or risk termination. It's easier to enforce a code
of conduct because the codes often specify policies along with corresponding
consequences for code abuses.

Conversely, the code of ethics focuses more on values and moral principles

than on specific actions. This makes it more challenging to identify code
violations and enforce compliance. For example, a company's code of conduct
might specify expectations for employees to represent the company well in
front of customers. If an employee violates this policy, their supervisor can
refer to the code of conduct. With a code of ethics, a company might describe
its commitment to sustainability. An employee might make a decision that
didn't support sustainability, but because the code is less explicit, values are
harder to enforce.

Applicability

Codes of conduct typically outline actual rules that have obvious applications.
For example, a code of conduct might prohibit cellphone use, sharing of
sensitive information or certain attire, like leggings. These rules directly apply
to everyday actions and leave little room for interpretation. In contrast, the
items on a company's code of ethics may seem vague and idealistic. The
code of ethics might encourage employees to act with intention and equality.
While the company can use its code of ethics to support its values and ideals,
the code itself might not apply to every business decision or action. For
example, the company might make an overarching commitment to
sustainability while still making smaller, cost-effective decisions that don't fully
support that goal. Businesses can apply their code of ethics in theory, but they
apply their code of conduct in practice.

Impact

The two codes can also differ in the impact they have on a company's
culture and values. By following the code of ethics and promoting their
company's values, employees can contribute to a culture that's in line with the
organization's vision. Their actions can support the long-term vitality of the
organization and consistently improve its ability to meet its goals. Codes of
ethics can have a longer-term impact on a company and its culture.

The code of conduct has an immediate impact on a company. Because most

codes of conduct comprise enforceable rules, their effect on individual
employees can be more direct. While both codes can influence employees'
daily actions and decisions, conduct codes often have a larger effect on the
individual, and ethical codes often have a larger effect on the culture.

Publicity

Usually, a company discloses the code of ethics to the public. Because the
code of ethics contains values that the company finds important, executives
may share this with their audience to attract business or to be transparent.
The code of ethics also drives decision-making, so a public code can help the
company show others that its decisions align with its core values.

Conversely, companies may reserve the code of conduct for employees only.
Typically, an employee learns about the code of conduct during onboarding.
Since a code of conduct refers to compliance, rule-following and employee
behavior, it's unnecessary for a company to share this code publicly.