Here’s why your company should have a Code of Ethics

What is a Code of Ethics?

The approach of companies towards their ethical and social duties has been considerably strengthened over the past decades. Ethical values can be regarded as the fundamental principles according to which companies and employees interact with each other and externally with customers and activity partners.

A code of ethics is a written, distinct and formal document that clarifies the goals the company pursues, the standards and values it upholds and what it could be held responsible for. A code of ethics demonstrates a company’s awareness of ethical issues and indicates how it will deal with these issues. Its purpose is to convey, internally and externally, the spirit that drives the company, its vision and its mission.

Why is it relevant to implement a Code of Ethics?

The implementation of a code of ethics has a significant impact on any organisation, as it directly affects the financial performance and well-being of employees. Several studies confirm that the inclusion of this instrument contributes to the achievement of many benefits, especially when these rules are deeply shared and internalised by all employees.

The successful implementation of a code depends on these elements, but it produces results that are worth the time and effort. It will result in:

1. Improved transparency and fair business management;
   
   
2. Greater organisational clarity and balance of powers and responsibilities;
   
   
3. A better risk culture;
   
   
4. A higher perception of organisational support;
   
   
5. Better awareness and competence in managing and resolving organisational problems and constraints;
   
   
6. A greater focus on the organisational climate in terms of perceptions of safety (physical and psychological) and diversity;
   
   
7. A substantial contribution to strategic market positioning, in terms of identity and reputation;
   
   
8. Greater commitment, reliability in communications and conflict management;
   
   
9. Improved individual, group and organisational satisfaction which will translate into more efficient and profitable performance.
   
   

What should it contain?

All this is possible because each code of ethics is based on key principles typical of sustainability and therefore focuses on the protection and enhancement of human resources, respect and protection of the planet and profit. For this reason, it will always contain values related to integrity, honesty, transparency, responsibility, diversity and all ethical practices to support full social, economic and environmental sustainability.

Lastly, the code of ethics will provide for voluntary adherence, as well as disciplinary sanctions, hoping that its basic principles will also be shared at a personal level, which will make it more successful. There is no real obligation to create and promote a corporate code of ethics. However, the advantages of having a document of this kind are many. Therefore, it is recommended for all companies, even the smallest ones, to have a code of ethics.