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Code of Business Conduct Development and Reviews

A code of ethics or code of business conduct sets the tone for integrity in a company. It is a complex contract between a company and its stakeholders.

While most companies have some form of code of conduct, it is likely to be a basic set of rules that the company’s lawyers has drafted, and consists of a set of do’s and don’ts. A code of conduct should not take the place of the compliance department nor be a compliance programme. A good code sets the tone dictated by the senior leadership of the company as to how the company should react and deal with certain unclear ethical or integrity issues. Ethics and integrity are rarely black and white issues, but often take the form of many shades of grey. Whether your company is acting in the lighter or the darker side of the spectrum is often a reflection of your CEO’s attitudes, the company’s values and culture. The code is designed to capture that answer and form a guide for all stakeholders.

This service is useful if:

you have a code of conduct which is really just a summary of the law in certain areas and is simply to be read by lawyers whenever an issue arises
you have a code that was drafted by the legal team and does not contain company values, integrity guidance, or behaviours which the company's employees will under no circumstances engage in
you have a code that is lifeless and boring; that no one reads it as they can’t even find it
your code is regarded as the compliance programme – something it is uniquely unsuitable for
you want to integrate compliance into the business and have consistent messaging on compliance values and vision.

Benefits:

Gives real guidance to your stakeholders on how you will deal with issues
Removes confusion or useless examples
Adds colour, design, values, compliance standards and expectations, and gives real guidance on how to navigate the company’s position
Sets the tone for all employees and can be used to judge whether new employees fit the standard
Reflects the integrity stance for the company and removes confusion when stakeholders are faced with too much ambiguity and need guidance.

Case studies

A client in the energy trading business was faced with a continual dilemma on how to manage certain ethical situations: What do you do if there is a major lack of oil supply and you have the only significant stockpile? Do you ride up the price at the expense of the industry and the economy, just to secure a record price? These were live issues that, through integrity discussions and employee involvement, the company was able to set a standard of behaviour and activities that were acceptable and consistent with its values. This was integrated into a new code of conduct and set the tone for the relaunch of the company’s compliance department.

Another client, a company in the healthcare industry, was being asked to comply with its vendor’s (known as principal’s) code of conduct when distributing their products. When the company grew, and began distributing multiple products from different principals, working to the original vendor's code of conduct was no longer viable. Our advisory worked with the company to develop its own code of conduct that was benchmarked against all its principal’s codes. This was then used to show that their own code was consistent with the requirements of the principals' codes, often exceeding them.