Compliance and risk mitigation are some of the reasons an organization should adopt a code of ethics.
As previously discussed, there are a multitude of good reasons to adopt a code of ethics to guide the behavior of employees and organizational leadership.
Once an organization decides to adopt a code of ethics, they are faced with the question of what should go in such a code.
Specifically, what is included in a code may depend on a variety of factors including, but not limited to, the organization’s mission and purpose, the statutes and regulations that apply to your organization, and the history of employee wrongdoing, i.e., what has happened in the past that fails to live up to the organization’s expectations.
The following are some suggestions that an entity may wish to include in its code of ethics.
Conflicts of Interest
This can range from provisions governing the giving and receiving of gifts, to prohibitions on nepotism, to the disclosure of employee financial interests.
Part and parcel of the general conflict of interest concept is the duty of loyalty imposed on employees.
Here a duty of loyalty provision could prohibit employees from acting contrary to their employer’s interests while employed.
This could mean not setting up a business while you are employed with your organization that would compete with your employer.
Confidentiality
Provisions of this kind can address protecting client or vendor information. For healthcare organizations, HIPAA regulations will specify the duties of confidentiality.
Other requirements may focus on protecting the privacy interests of employees.
Given recent trends by the National Labor Relations Board scrutinizing employer policies, any confidentiality provisions need to be carefully drafted.
General Labor and Employment Practices
Some standard employment provisions would cover topics like illegal discrimination and harassment, drug and alcohol policies, computer and technology use, the organization’s commitment to diversity, equity, and inclusion, and post-employment considerations.
A code of ethics could also articulate acceptable standards of conduct such as refraining from being rude or discourteous to co-workers, customers, or vendors.
Relationships with Third Parties
The organization’s code may discuss the procedure and rules associated with business development and procurement.
Reporting Mechanisms and Employee Protection
Most codes will provide how an employee can report a suspected code violation.
These sections may include the investigation process as well as a commitment against retaliation for those who report ethical violations.
In some cases, these provisions may also specify the penalties associated with code violations.
Whether to adopt a code of ethics and what goes in it should not be a one-off decision.
Creating a code requires stakeholder buy-in, a strategic and carefully thought-out approach, and a true commitment to ensuring the organization adheres to and lives up to the values of the final product.