Code of conduct

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A code of conduct is a set of rules outlining the norms, rules, and responsibilities or proper practices of an individual party or an organization.

Companies' codes of conduct[edit]

A company code of conduct is a set of rules which is commonly written for employees of a company, which protects the business and informs the employees of the company's expectations. It is appropriate for even the smallest of companies to create a document containing important information on expectations for employees.[1] The document does not need to be complex or have elaborate policies.

Failure of an employee to follow a company's code of conduct can have negative consequences. In Morgan Stanley v. Skowron, 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's faithless servant doctrine, the court held that a hedge fund's employee engaging in insider trading in violation of his company's code of conduct, which also required him to report his misconduct, must repay his employer the full $31 million his employer paid him as compensation during his period of faithlessness.[2][3][4][5]

In practice[edit]

A code of conduct can be an important part in establishing an inclusive culture, but it is not a comprehensive solution on its own. An ethical culture is created by the organization's leaders who manifest their ethics in their attitudes and behavior.[6] Studies of codes of conduct in the private sector show that their effective implementation must be part of a learning process that requires training, consistent enforcement, and continuous measurement/improvement.[7] Simply requiring members to read the code is not enough to ensure that they understand it and will remember its contents.[8] The proof of effectiveness is when employees/members feel comfortable enough to voice concerns and believe that the organization will respond with appropriate action.[9]

Accountants' code of conduct[edit]

In its 2007 International Good Practice Guidance, "Defining and Developing an Effective Code of Conduct for Organizations", provided the following working definition: "Principles, values, standards, or rules of behavior that guide the decisions, procedures, and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations."


See also[edit]


  1. ^ "Building a compliance department". Thomson Reuters. Retrieved 20 January 2022.
  2. ^ Glynn, Timothy P.; Arnow-Richman, Rachel S.; Sullivan, Charles A. (2019). Employment Law: Private Ordering and Its Limitations. Wolters Kluwer Law & Business. ISBN 978-1543801064 – via Google Books.
  3. ^ Jerin Matthew (December 20, 2013). "'Faithless' Ex-Morgan Stanley Fund Manager Ordered to Repay $31m to Former Employer". International Business Times UK.
  4. ^ Henning, Peter J. (December 23, 2013). "The Huge Costs of Being a 'Faithless Servant'". New York Times DealBook.
  5. ^ "Morgan Stanley seeks $10.2 million from convicted former trader". GreenwichTime. January 15, 2013.
  6. ^ McMillan, Michael (2012-02-20). "Codes of Ethics: If You Adopt One, Will They Behave?". Enterprising Investor: Practical analysis for investment professionals. Retrieved 10 February 2016.
  7. ^ Doig, Alan; Wilson, John (1998). "Business Ethics: A European Review Volume 7, Issue 3, July 1998". Business Ethics: A European Review. 7 (3): 140–149. doi:10.1111/1467-8608.00100.
  8. ^ ACC. "Top Ten Tips for Developing an Effective Code of Conduct". Association of Corporate Counsel. Archived from the original on 7 September 2018. Retrieved 10 February 2016.
  9. ^ Barman, Tanya; White, Samantha (June 2014). "Implementing an effective corporate ethics policy". Chartered Global Management Accountant (CGMA) Magazine. Retrieved 10 February 2016.
  10. ^ Bank codes of conduct
  11. ^ "Coca-Cola Code of Conduct" (PDF). Coca-Cola Company. Archived from the original (PDF) on 2013-10-19. Retrieved 2014-04-29.
  12. ^ Paul de Guchteneire. "Code of conduct social science research UNESCO" (PDF).
  13. ^ "Madrid Declaration on Ethical Standards for Psychiatric Practice". World Psychiatric Association. Archived from the original on 2016-03-04. Retrieved 2013-02-28.
  14. ^ Bquadrats – Josi Swerts. "EFPA Ethics – Board of Ethics".
  15. ^ "Ethical Principles of Psychologists and Code of Conduct".
  16. ^ a b "SRA Code of Conduct 2011". SRA Handbook. Solicitors Regulation Authority. Retrieved 25 October 2017.

External links[edit]

Media related to Codes of conduct at Wikimedia Commons Quotations related to Codes of conduct at Wikiquote