CHAPTER II

Code of Ethics and Code of Conduct

Code of Ethics Definition

The code of ethics is a moral standard that the company expects employees to follow.
At a minimum, ethics guidelines are established by the laws and industry regulations. A
business can exceed minimum ethics guidelines to ensure that employees feel safe, avoid
situations where they feel harassment or discrimination. Conflicts of interest are also
addressed in a code of ethics. A well-written code of ethics that’s adhered to builds trust
among employees and establishes credibility with partner companies and consumers.
“Code of ethics” as such standards as are reasonably necessary to promote:
1. Honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships.
2. Full, fair, accurate, timely, and understandable disclosure in the periodic reports
required to be filed by the issuer.
3. Compliance with applicable government rules and regulations.

Definition of Code of Conduct

A Code of Conduct applies the Code of Ethics to a host of relevant situations. A
particular rule in the Code of Ethics might state that all employees will obey the law, a Code
of Conduct might list several specific laws relevant to different areas of organizational
operations, or industry, that employees need to obey.
The Code of Conduct outlines specific behaviors that are required or prohibited as a
condition of ongoing employment. It might forbid sexual harassment, racial intimidation or
viewing inappropriate or unauthorized content on company computers. Codes, along with
other measures, have helped some companies dig themselves out of scandals, and have
helped many companies build a healthier work climate and reputation.
Another code of conduct example might require everyone to protect consumer data.
This is a law and sets a general guideline for all employees. However, the accounting
department might follow a higher set of privacy protocol set forth in the code of conduct. A
call center might require that all personal items be left in a locker to prevent accidentally
capturing or removing consumer personal information.
A great Code and a strong company culture is the heart of a successful organization.
This code helps the organizations to build a culture of integrity, transparency, and
accountability. Each entity implements local employee codes of conduct. These codes are
intended for all employees to help them develop their activities while respecting the Group’s
ethical principles.

Difference of Code of Ethics and Code of Conduct

It is easy to see why a code of ethics and a code of conduct may be confused or used
interchangeably. Both have goals of setting a standard of behaviors from employees. Both
Code of Ethics and Code of Conduct are similar as they are used in an attempt to encourage
specific forms of behavior by employees. Ethics guidelines attempt to provide guidance about
values and choices to influence decision making. Conduct regulations assert that some
specific actions are appropriate, others inappropriate. In both cases, the organization’s desire
is to obtain a narrow range of acceptable behaviors from employees.
The primary difference is that a code of conduct is less morally driven than a code of
ethics. For example, the code of conduct might require all employees to wear a specific color
or a company shirt when in the office. This is not an ethical issue, but it is a conduct issue
designed to create cohesiveness among employees.

Code of Ethics Code of Conduct

Ethics rules help people make decisions Conduct rules require specific behaviors
A moral standard that the company expects Code of Conduct states how the company expects
employees to follow employees to behave
Every code of ethics scenario should have a Code of conduct may not always be ethically
corresponding set of rules driven
Ethics are higher level concepts Code of conducts gets down to specific action
expectations
Code of ethics might state that all employees A code of conduct explains for example, the
must obey all safety protocols distance from an oxygen tank that employees are
allowed to smoke.
Ethical standards generally are wide-ranging and Conduct standards generally require little
non-specific, designed to provide a set of values judgment; you obey or incur a penalty, and the
or decision-making approaches that enable code provides a fairly clear set of expectations
employees to make independent judgments about about which actions are required, acceptable or
the most appropriate course of action prohibited.

Key principles of code of Conduct

These codes are intended for all employees to help them develop their activities while
respecting the Group’s ethical principles.
1. Respect for laws and regulations
The group upholds the highest standards in how it runs its activities, notably by
respecting human rights, labor laws and the environment.

2. Respect for people

Safety and health in the workplace. Prevention of discriminatory actions and Respect
for third parties.

Safety and health in the workplace

Safety of employees is one of the priorities, and safety will never be compromised for
the sake of efficiency. Each employee has the right to work in safe and healthy
conditions, and has a duty to ensure this by behaving responsibly in the workplace;
Safety policy extends to all employees, subcontractors and service providers. Each
employee must exercise their professional activities by abiding with the safety,
 hygiene and health rules applicable in his or her workplace, and by participating in
appropriate training sessions that might be planned in these areas.

Prevention of discriminatory actions

The Group is determined to offer personnel equal opportunities for recognition and
career advancement, regardless of their ethnic origins, gender, beliefs, sexual
orientation or physical condition and will not tolerate any form of discrimination, or
harassment.

Respect for third parties

It is forbidden for any employee to discuss or agree with a competitor an arrangement
which prevents, restricts or distort fair competition. Agreements, for example, to fix
prices, exchange price information, share markets or limit production are strictly
prohibited.

3. Respect for the environment

Respect for the environment and the preservation of natural resources in its operations
and those of its customers is a major priority.

4. Respect for competition law regulations

Competition law is applicable to every aspect of a company’s commercial activity:
negotiations with customers and suppliers, contacts with competitors, marketing and
sales promotion.

5. Respect for rules on insider trading

Any employee holding sensitive information could influence the smooth operation of
an agency if it is made public. The employee must keep this information confidential
and must not undertake, or recommend that a third party undertake or have
undertaken, any operations. The employee concerned must abide by the measures in
the memorandum on the prevention of insider trading issued by the agency.

6. Prevention of conflicts of interest

Each employee must commit avoiding any situation that involves a conflict between
their personal interests and those of their organization.
For example, a case where an employee may work simultaneously for a customer,
supplier or competitor or holds a major interest in these latter, either directly or
indirectly. Any employee who could potentially be in a conflict of interest is
encouraged to inform his or her immediate supervisor of this situation.

Respect for rules on corruption

It is prohibited to pay for, offer or grant unwarranted advantages, in any form
whatsoever, directly or through an intermediary, to a private party or a representative
of the public authorities in any country, with the purpose of obtaining favorable
treatment or influencing the outcome of a negotiation in which an organization is
involved.

7. Protection of Activities
Each employee must properly protect and keep confidential any strategic, financial,
technical or commercial data or documents that are not public and whose disclosure to
third parties could be harmful to the interests of the organizations.
  Protection of information
Likewise, professional and private information concerning a named person is
confidential and must be subject to all the precautions needed to prevent
inaccurate or inappropriate modification or disclosure. This duty on
confidentiality continues even after the departure of an employee.
 Protection of property and resources
Each employee must properly protect and keep confidential Group property and
resources such as intellectual property (patents, trademarks, and copyrights),
installations, equipment and financial resources or cash. These resources and
property must be used in accordance with their professional purpose and in the
established framework.
 They may not be used for personal ends except if explicit authorization has
been granted by a duly authorized individual in the framework of established
procedures.
 Lastly, it is the responsibility of each employee to protect the property and
resources of the Group against any damage, inappropriate alteration, fraud, loss
or theft.

8. Transparency and integrity of information

Each employee who takes part in the production, analysis, filling or communication of
this information must carry out these operations honestly and transparently.

1. Internal control and audit

Internal control systems set up within the Group (respect for laws, regulations,
policies or procedures, asset protection and reliable financial information) help
control its activities, operational efficiency and the efficient use of its resources.

2. Implementation of the Code of Conduct

If there is any doubt about the interpretation or application, in a given situation, of
the rules presented in this document.

Each employee has the right to inform his or her immediate supervisor, or his or
her unit’s Human Resources Department, Legal Department or Corporate
Governance Officer, the Group Personnel Department or the Group Ethics Officer
about it.

In addition, an employee who has, in good faith, pointed out a breach in the rules
pointed out in this document will not be subject to any disciplinary measures.

Professional ethics
Professional ethics encompass the personal and corporate standards of behavior expected by
professionals.

The word professionalism originally applied to vows of a religious order. By at least the year
1675, the term had seen secular application and was applied to the three learned professions:
1. Divinity
2. Law
3. Medicine
The term professionalism was also used for the military profession around this same time.
Professionals and those working in acknowledged professions exercise specialist knowledge
and skill. How the use of this knowledge should be governed when providing a service to the
public can be considered a moral issue and is termed professional ethics.

Professional Codes of Ethics

General rule is to ethically act in accordance with approved standards of conduct and
responsibility or according to the respective ethical code of behavior.

Importance of Professional Codes of Ethics

 Many ethical dilemmas in criminal justice
 Complicated relationships in the field
 Requirement of professionalism

Areas of Ethical Concern for Decision Making

The three areas below are not “static”. They, at times overlap, at times are manually
exclusive, and numerous varieties in between.

Making Ethical Decisions: Process

Ethical decision-making refers to the process of evaluating and choosing among
alternatives in a manner consistent with ethical principles. In making ethical decisions, it is
necessary to perceive and eliminate unethical options and select the best ethical alternative.

The process of making ethical decisions requires:

1. Commitment: The desire to do the right thing regardless of the cost
2. Consciousness: The awareness to act consistently and apply moral convictions to
daily behavior.
3. Competency: The ability to collect and evaluate information, develop alternatives,
and foresee potential consequences and risks.

Good decisions are both ethical and effective:

Ethical decisions – generate and sustain trust; demonstrate respect, responsibility,
fairness and caring; and are consistent with good citizenship. These behaviors provide a
foundation for making better decisions by setting the ground rules for our behavior.

Effective decisions – are effectively if they accomplish what we want accomplished

and if they advance our purposes. A choice that produces unintended and undesirable results
is ineffective. The key to making effective decisions is to think about choices in terms of their
ability to accomplish our most important goals. This means we have to understand the
difference between immediate and short-term goals and longer-range goals.

Making ethical Decisions: Model

The “Character-Based Decision-Making model” model, developed by the Josephson
Institution of ethics, can be applied to many common problems and can also be used by most
individuals facing ethical dilemmas.
It involves three steps:
1. All decisions must take into account and reflect a concern for the interest and well
being of all affected individuals (‘stakeholders”).
 The underlying principle here is the Golden Rule – help when you can, avoid harm
when you can.

2. Ethical values and principles always take precedence over no-ethical ones.
Ethical values are morally superior to non-ethical ones. When faced with a clear
choice between such values, the ethical person should always choose to follow ethical
principles.

3. Perceiving the difference between ethical and non-ethical values can be difficult. This
situation often occurs when people perceive a clash between what they want or
“need” and ethical principles that might deny these desires. If some rationalization
begins to occur, this situation is probably present.

It is ethically proper to violate an ethical principle only when it is clearly necessary to

advance another true ethical principle, which, according to the decision-makers
conscience, will produce the greatest balance of good in the long run.

7 steps to help you make ethical distinctions between competing options when you are
faced with a difficult choice (According to Joseph Institute of Ethics)
1. Stop and think: This provides several benefits. It prevents rash decisions, prepares us
for more thoughtful discernment, and can allow us to mobilize our discipline.
2. Clarify goals: Before you choose, clarify your short-term and long-term aims.
Determine which of your many wants and “don’t wants” affected by the decision are
the most important. The big danger is that decisions that fulfill immediate wants and
needs can prevent the achievement of our more important life goals.
3. Determine: Be sure you have adequate information to support an intelligent choice.
To determine the facts, first resolve what you know, then what you need to know. Be
prepared for additional information and to verify assumptions and other uncertain
information. In addition:
a. Consider the reliability and credibility of the people providing the facts.
b. Consider the basis of the supposed facts. If the person giving you the
information says he or she personally heard or saw something, evaluate that
person in terms of honesty, accuracy, and memory.
4. Develops options: Once you know what you want to achieve and have made your
best judgment as to the relevant facts, make a list of actions you can take to
accomplish your goals. If it’s an especially important decision, talk to someone you
trust so you can broaden your perspective and think of new choices. If you can think
of only one or two choices, you’re probably not thinking hard enough.
5. Consider consequences: Filter your choices to determine if any of your options will
violate any core ethical values, and then eliminate any unethical options. Identify who
will be affected by the decision and how the decision is likely to affect them.
6. Choose: Make a decision. If the choice is not immediately clear, try:
a. Talking to people whose judgment you respect.
b. Think of person of strong character that you know or know of, and ask your self
what they would do in your situation.
c. If everyone found out about your decision, would you be proud and comfortable?
d. Follow the Golden Rule: treat others the way you want to be treated, and keep
your promises.
 7. Monitor and modify: Ethical decision-makers monitor the effects of their choices. If
they are not producing the intended results, or are causing additional unintended and
undesirable results, they re-assess the situation and make new decisions.

Ethical dilemmas, also known as a moral dilemmas, are situations in which there is a
choice to be made between two options, neither of which resolves the situation in an ethically
acceptable fashion. A moral dilemma is a conflict in which you have to choose between two
or more actions and have moral reasons for choosing each action.
Character of Ethical Dilemmas
 A choice must be made between two (or more) courses of action
 Significant consequences for taking (or not taking) any action
 Each action is supported by one or more ethical principles
 Principles supporting the unselected courses (s) of action will be compromised
 Fundamentally ethics is knowing what is right and doing it.
 The heart has reasons that reason will never know. (Pascal)

What are the ethical models?

The Ethics model is a theoretical grounded ethical decision-making model that draws from
the latest relevant literature in ethics and integrates multiple theoretical perspectives.
Specifically, the model is comprehensive and accessible, and can be used with a wide range
of cases.
An ethical decision-making model is a framework that leaders use to bring these principles
to the company and ensure they are followed.

6 Steps for Making Ethical Decisions

In other instances, you may feel unsure about a situation and a decision, since there seem to
be a number of acceptable alternatives. If you ask yourself these types of questions, the issue
probably has ethical or moral implications.
This 6-step process helps you make a thoughtful and responsible decision.

1. ESTABLISH THE FACTS IN A SITUATION

Establish exactly what has happened (or is happening) and who is involved in the
situation before trying to figure out what to do about it. Ask yourself the following
questions:
 What has happened or what is happening?
 When and where did certain events occur?
 Who is (or might be) involved in or concerned by the situation?
 What do the parties involved have to say about the situation?

2. DECIDE WHETHER THE SITUATION INVOLVES LEGAL OR ETHICAL

ISSUES
The next step consists of determining whether the situation has legal implications.
The following questions can be useful in determining that: has anyone been harmed
by the action or decision of another, and if so, in what way? Does the action or the
situation contravene an existing law? Was there a breach of contract? Where the
actions of the athlete discriminatory or constituted harassment?
 3. IDENTIFY YOUR OPTIONS AND POSSIBLE CONSEQUENCES
Ask yourself: What could I do in this situation? Think about a variety of options. The
first one to consider should be not making any decision or taking no action. As a
second step, consider the other extreme of the continuum, and think of the most
comprehensive or liberal action you might take in the situation. Then, identify several
intermediate options. Do not rule out any option at this stage, even though at the
outset it may appear an unlikely choice.

4. EVALUATE YOUR OPTIONS

A decision should reflect a fair balance between outcomes sought and the means used
to achieve them.

5. CHOOSE THE BEST OPTION

Making an ethical decision requires a final reflection on what is the best decision
under the circumstances, a just and reasonable decision that will apply where an
ethical dilemma is involved. An ethical decision is “the right thing to do” with regard
to the duties and responsibilities of the person making the decision, is made “the right
way”, and is consistent with the values and behaviors outlined in the Code of Ethics.

6. IMPLEMENT YOUR DECISION

Putting your decision or plan of action into effect requires that you consider a number
of things, particularly if it involves dealing with individuals or groups of people.
 Choose your path. Exactly what are you going to do? Plan carefully the steps
you are going to take.
 Think about what may happen. Consider the likely outcomes of the decision
and the how any consequences will be managed.
 Identify who needs to know. Consider who needs to be informed of or
involved in implementing the action plan or decision.
 Determine if you can deal on your own with the person(s) involved. In issues
not involving a contravention of the law, it is often best to try to deal with the
issue informally and directly with the individual involved.
 Warn, don’t threaten. This is an important concept when dealing with a
situation at an informal level. It entails informing the individual of the logical
consequences of what can happen if a situation is not resolved, rather than
threatening the person with an end run.
 Think about what you might do next if the chosen plan of action doesn’t work.
If your original decision or plan of action is ineffective, think carefully about
what to do next. Inform the individual that you now have to follow up with
Plan B

Hammer Model of Scientific Misconduct

1. Negligence
 Lack of Training
 Lack of Support
 Lack Commitment
2. Deliberate Dishonesty
3. Begins with lack of commitment
4. Money
 5. Notoriety – media
6. Ends justify the means – I know he’s guilty
7. Ego – I don’t make mistakes
D-O-O-R Model of Decision Making
D – Determine
 What is wrong?
 What’s the REAL issue for me?
 Is there a moral or ethical threat to me or some else?
 Would this be a problem if someone else was involved?
O – Options
 What are some extreme choices?
 Am I considering several choices?
 What resources or help do I have available?
 Choose them wisely
O – Outcomes
 What could happen based on the Option I choose?
 What could happen if I do nothing?
 Who will be affected by what I do?
 Is it the RIGHT thing to do?
R – Recycle
 After an option is chosen, return to see if the original question is still valid.
Professional ethics and codes of conduct
Professional ethics are principles that govern the behavior of a person or group in a business
environment. Like values, professional ethics provide rules on how a person should act towards other
people and institutions in such an environment.
However, there are some universal ethical principles that apply across all professions, including:
1. Honesty
2. Trustworthiness
3. Loyalty
4. Respect for others
5. Adherence to the law
6. Doing good and avoiding harm to others.
7. Accountability

Professional codes of conduct provide benefits to:

1. The public, as they build confidence in the profession’s trustworthiness
2. Clients, as they provide greater transparency and certainty about how their affairs will be
handled
3. Members of the profession, as they provide a supporting framework for resisting pressure to
act inappropriately, and for making acceptable decisions in what may be ‘grey areas’
4. The profession as a whole, as they provide a common understanding of acceptable practice
which builds collegiality and allows for fairer disciplinary procedures.
5. Others dealing with the profession, as the profession will be seen as more reliable and easier
to deal with.
Codes of Conduct
Codes of conduct are becoming more a staple in the academic lives of students while some of
these rules are based solely on academics other are more in depth than in previous years.
A code of professional conduct is a necessary component to any profession to maintain
standards for the individuals within that profession to adhere. It brings about accountability,
responsibility and trust to the individuals that the profession serves.
A code of conduct is a written collection of the rules, principles, values, and employee
expectations, behavior, and relationships that an organization considers significant and believes are
fundamental to their successful operation.

Why Code of Conduct is Important?

Code of conduct is a central guide and reference for employees in supporting day –to-day
decision making. A well written code clarifies organization’s mission, values and principles, linking
them with standards of professional conduct.