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Why your business needs a code of ethics

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That’s not easy to achieve, particularly for SMEs competing against larger companies – not least to create a corporate culture that empowers employees to make it all happen.
Corporate culture is the indefinable “something” that companies rely upon to drive sales and good customer relations, the cornerstones of all business success.

But, as we’ve previously written, corporate culture can be planned for and incorporated into business strategy, helping to define what a company stands for and how it is “doing right” for its employees, customers and the wider community.

One effective way to give voice to corporate culture is to develop and set down a code of ethics, providing employees with a context within which they can act honestly and fairly, and removing any ambiguity in their decision-making.

It sounds deceptively simple, but creating a code of ethics can be of far-reaching importance, because it helps managers focus attention on what the company is really about, and what risk factors can impact on decisions made – at any level in the company.

Although primarily a business tool, a code of ethics is also a powerful marketing and PR statement, because it articulates how a company does business, and how individual employees conduct their day-to-day activities.

Most codes start with a clear statement that sets out in the broadest terms what the company expects. For example:

Google

Under the strapline, “Don’t be evil” Google says that it’s about “providing our users unbiased access to information, focusing on their needs and giving them the best products and services that we can. But it’s also about doing the right thing more generally – following the law, acting honorably and treating each other with respect.”

LinkedIn

“Consistent with our core values, LinkedIn employees are expected to act and perform their duties ethically, honestly and with integrity – doing the right thing even when “no one is looking.””

Coca-Cola

Coca-Cola provides one of the clearest statements on why ethical standards are so important:

“We live in an era when public trust and confidence in business are among the lowest
levels in history. We at The Coca-Cola Company are fortunate, however, to work for one
of the most admired businesses in the world – a reputation that has been enhanced and
safeguarded over the years by a rich culture of integrity and ethical conduct. Our business is built on this trust and this reputation.”

The above examples from mega-companies can equally be applied to the smallest of enterprises, because every company’s activities impact on employees, suppliers, customers and the communities within which it operates.

However, a code of conduct should be more than some fine words on a piece of paper. It needs management leadership and input at all levels to determine what issues are of concern to employees – everything from sales techniques to customer relations.

It should fit easily into a company’s approach to corporate social responsibility and, not least, it should be monitored for compliance, with staff training to ensure that ethical behaviours become simply “how we do business.”

As a way to concentrate everybody’s minds on what matters, and to offer a better service than your competitors, creating a code of ethics may be the best thing you’ve never quite got around to doing.

Charlie Laidlaw is a director at David Gray PR and a partner in Laidlaw Westmacott. 

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