Code of Ethics: Meaning, Types, Steps, Principles and Example

Ethics is the study of what is right or wrong, good or bad, and how individuals/societies should
conduct themselves. It is a wide framework that evaluates and guides human actions based on
certain principles, values, and morals.

On the same note, a code of ethics is a clearly defined framework that articulates the expected
ethical behavior within a specific context, organization, or profession.

Needless to say, different people interpret it differently.

It is a practical application of ethical principles tailored to a particular domain. It’s a way to

make sure everyone is on the same page about what’s right and wrong in that specific situation.

In this article, we understand the meaning, history, and purpose of this code along with its types
and examples. We further look into how to create a code of ethics in business and its global
principles.

What Is A Code Of Ethics?

Meaning

A code of ethics serves as a set of principles that guide professionals and organizations in
conducting business with fairness and honesty. It provides a framework to align behavior with
socially accepted norms and outlines the expected approach to addressing problems in one’s
professional life.

A “Code of ethics” is like a set of rules or guidelines that people agree to follow to be fair,
honest, and good in a certain area of life, like at work or in a group.

Definitions

A code of ethics is a form of standardization of workplace behavior; hence, it is a more detailed

general behavioral guideline set by law.

– (Weller, 1988; Schwartz, 2001; Bricknell & Cohen, 2005)

A code of ethics represents the organization’s expectations of employees’ work conduct, sets a
clear benchmark for employees, and creates a positive influence on employees’ behavioral
patterns and decisions. For these reasons, the establishment of a code of ethics is perceived as
ideal and to be practiced in organizations to encourage ethical practice.

1
– Adams et al., 2001; Ferrell et al., 2000; Loqman, 2001.

History Of The Code Of Ethics

Historically, the code of ethics usually emerged in response to significant disruptions,

particularly scandals in fields like medicine and behavioral research. These issues made
societies rethink responsibility, trust, and how institutions work. This led to the creation of new
society rules.

Let us look at some historical instances where the code of ethics became symbolic at the time
leading to the present code.

Mid-20th Century

In the 1940s-50s, ethics codes emerged in response to Nazi atrocities, leading to the Nuremberg
Code. This set the stage for subsequent research codes, including the 1948 Geneva
Declaration and the 1964 Helsinki Declaration.

1960-70s

Social disruptions and ongoing research scandals (e.g., Tuskegee, Willowbrook, Milgram,
Stanford Prison) prompted the need for more legal codification and enforcement mechanisms.
The Belmont Report and Institutional Review Boards (IRBs) addressed the demand for
skepticism and critical assessment.

1974-2000

In computing ethics, reports to Congress highlighted fundamental issues in big data ethics.
However, major computing societies (ACM, IEEE, DPMA, now AITP) established ethics
codes in the early internet age (1990s) that critics deemed outdated even then.

What Is The Purpose Of A Code Of Ethics?

2
The core purpose of a code of ethics is to contribute to the sustainable development of an
organization. It makes an entity align with the universally accepted human rights standards and
established understanding of ethical values.

Furthermore, it prevents unethical behavior and reinforces organizational values. Apart from
this, the goals of a code of ethics are described below.

1. Ensure Legal Compliance: Adhere strictly to relevant legislation.

2. Create a Predictable Environment: Create a predictable and consistent ethical

environment.

3. Enforce Ethical Rules: Recognize the need for enforcing ethical rules and guidelines.

4. Provide Guidelines for Stakeholders: Provide clear ethical guidelines for the
behavior of stakeholders, including employees and suppliers.

5. Reassure Ethical Stance: Reassure stakeholders about the organization’s ethical stance
and intent.

Types Of Code Of Ethics

There are three main types of codes of ethics:

1. Compliance-based code of ethics

3
This type of code focuses on following the law and avoiding illegal activities. It is often found
in heavily regulated industries, such as finance and healthcare. Compliance-based codes
typically outline specific rules and procedures that employees must follow.

2. Value-based code of ethics

This type of code goes beyond just following the law and focuses on upholding the
organization’s core values. Value-based codes often address issues such as honesty, integrity,
respect, and fairness. They may also address social responsibility and environmental
sustainability.

3. Profession-specific code of ethics

This type of code applies to members of a particular profession, such as doctors, lawyers, or
engineers. Profession-specific codes typically address the ethical obligations that professionals
have to their clients, colleagues, and the public.

In addition to these three main types, codes of ethics can also be categorized by their focus:

4. Content-Focused Codes

Content-focused codes lay out specific rules, providing a clear guide for employees on ethical
behavior within the organization. These codes ensure everyone knows what’s expected,
fostering a shared understanding of ethical conduct.

5. Output-Focused Codes

Output-focused codes look beyond internal operations, focusing on how a business’s actions
impact society. These codes highlight the external outcomes, promoting a sense of social
responsibility and encouraging businesses to contribute positively to their communities.

6. Transformation-Focused Codes

Transformation-focused codes go beyond rules. They evaluate how well the code changes
employee behavior. These codes aim to create a positive shift in organizational culture,
encouraging employees to internalize ethical values. They mostly foster a culture of integrity
and responsibility.

Code Of Ethics Vs. Code Of Conduct

In different industries or organizations, “code of ethics” or “code of conduct” are often treated
as the same thing. Some organizations use both terms interchangeably.
4
Even though both convey a message about what’s considered “good,” there’s a clear difference
between a code of ethics and a code of conduct. It is outlined in the table below.

Aspect Code of Ethics Code of Conduct

Aspirational – Set high standards for Directional – Guide acceptable and

Intent
everyone to aspire to unacceptable conduct

Values and principles as a basis for

Primary Focus Guidelines or rules for behavior
behavior

Reactive – Ensure compliance with

Proactive – Promote ethical behavior
prescribed standards of conduct;
Approach and contribute to ethical culture
necessary but not sufficient for ethical
formation
culture formation

Document
Short; typically, a one-pager Longer; but not excessively long
Length

Nature of “Spirit of the law” – Focus on “Letter of the law” – Emphasis on rules
Document principles and guidelines

Promotes ethical behavior by setting

Promotion of Prevents unethical behavior by
standards for ethical culture
Ethics providing necessary guidelines
formation

One organization could have multiple

Number per
Usually only one code of ethics codes of conduct (e.g., one for
Organization
employees and one for suppliers)

Tone More relational and transformational Informational and instructional

Revision
Rarely amended As often as required
Frequency

Symbolically owned by all For compliance purposes, owned by a

Ownership
employees specific function in the organization

5
 Signed voluntarily/symbolically by Formally signed by employees on
Endorsement as many leaders and employees as commencement of their employment as
possible a condition of service document

Should never have punitive intent;

Disciplinary Has punitive powers; may be tabled
not included in a disciplinary
Power during a disciplinary inquiry/hearing
inquiry/hearing

What Are Some Examples Of Codes Of Ethics?

Example of Code of Ethics in Business

1. Google Code Of Conduct

Google’s Code of Conduct reflects the company’s values and commitment to ethical business
practices. It emphasizes the importance of respect, integrity, and accountability in all aspects
of work at Google.
The Code of Conduct applies not only to Google employees but also to board members and
members of the extended workforce, including temps, vendors, and contractors. It outlines
the expectation for all to follow the code, understanding that failure can result in disciplinary
action, including termination of employment.
Google encourages an environment where employees feel safe to raise concerns and
questions about potential code violations, assuring that there will be no retaliation for
reporting or participating in an investigation of a possible violation.

2. Costco Code of Ethics

Here at Costco, we have a very straightforward, but important mission: to continually provide
our members with quality goods and services at the lowest possible prices. In order to achieve
our mission, we will conduct our business with the following Code of Ethics in mind:

Obey the law.

Take care of our members.
Take care of our employees.
Respect our suppliers.

6
If we do these four things throughout our organization, then we will achieve our ultimate goal,
which is to reward our shareholders.

3. Infosys Code of Conduct

Infosys’ Code of Conduct outlines the ethical and professional standards expected of its
employees and associates. The code embodies Infosys’ core values, encapsulated in the
acronym C-LIFE: Client Value, Leadership by example, Integrity and Transparency, Fairness,
and Excellence.
The Code of Conduct covers various aspects of professional conduct, including ethical
business activities, preventing corruption, protecting company assets, and maintaining
confidentiality. It also emphasizes creating an equal-opportunity workplace free from
discrimination or harassment.
Infosys encourages its employees to make ethical choices and provides channels for raising
concerns about potential violations, ensuring that the company maintains its reputation for
integrity and transparency.

Example of Code of Ethics for Teachers

The National Education Association believes that the education profession consists of one
education workforce serving the needs of all students and that the term ‘educator’ includes
education support professionals.

The educator, believing in the worth and dignity of each human being, recognizes the supreme
importance of the pursuit of truth, devotion to excellence, and the nurture of democratic
principles. Essential to these goals is the protection of freedom to learn and to teach and the
guarantee of equal educational opportunity for all. The educator accepts the responsibility to
adhere to the highest ethical standards.
The educator recognizes the magnitude of the responsibility inherent in the teaching process.
The desire for the respect and confidence of one’s colleagues, of students, of parents, and of
the members of the community provides the incentive to attain and maintain the highest
possible degree of ethical conduct. The Code of Ethics of the Education Profession indicates
the aspiration of all educators and provides standards by which to judge conduct.
The remedies specified by the NEA and/or its affiliates for the violation of any provision of
this Code shall be exclusive and no such provision shall be enforceable in any form other than
the one specifically designated by the NEA or its affiliates.

7
Example of Code of Ethics in Journalism

Members of the Society of Professional Journalists believe that public enlightenment is the
forerunner of justice and the foundation of democracy. The duty of the journalist is to further
those ends by seeking truth and providing a fair and comprehensive account of events and
issues. Conscientious journalists from all media and specialties strive to serve the public with
thoroughness and honesty. Professional integrity is the cornerstone of a journalist’s credibility.
Members of the Society share a dedication to ethical behavior and adopt this code to declare
the Society’s principles and standards of practice.

Example of Code of Ethics in Research

The KCES’ Institute of Management and Research Jalgaon is committed to promote and
maintain high standards of honesty and accountability in the conduct of academic research and
is keen to implant and endorse the culture of honesty and transparency in all its institutional
activities.
The institute preserve academic honor and integrity by repudiating all forms of academic and
intellectual dishonesty, including plagiarism. As per the University guidelines every PhD thesis
is checked for plagiarism through Urkund software for ensuring originality.
Institute of Management & Research, Jalgaon

10 Principles Of The UN Global Compact

The UN Global Compact lays out ethical codes to ensure businesses follow the law and prevent
fraud. Organizations must align their ethical codes with the UN Global Compact’s ten
principles.

They are as follows:

The Universal Declaration of Human Rights

Principle 1: Businesses should support and respect the protection of internationally

proclaimed human rights; and

Principle 2: Businesses should make sure that they are not complicit in human rights abuses.

The International Labour Organization’s Declaration on Fundamental Principles and

Rights at Work

8
Principle 3: Businesses should uphold the freedom of association and the effective recognition
of the right to collective bargaining;

Principle 4: The elimination of all forms of forced and compulsory labor;

Principle 5: The effective abolition of child labor; and

Principle 6: The elimination of discrimination in respect of employment and occupation.

The Rio Declaration on Environment and Development

Principle 7: Businesses should support a precautionary approach to environmental

challenges;

Principle 8: Undertake initiatives to promote greater environmental responsibility; and

Principle 9: Encourage the development and diffusion of environmentally friendly

technologies.

The United Nations Convention Against Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion
and bribery.

Wrapping Up

From the past to now, how businesses make moral choices has changed a lot. Today, people
care about working conditions, environmental impact, and inequality, which wasn’t as
important a century ago. Ethical codes make sure businesses always act with integrity.

A Code of Ethics should strongly say everyone should have equal chances at work, no matter
their race, caste, gender, or religion. Companies should make sure the workplace is safe and
comfortable for all workers. The code should also talk about following laws, supporting
whistleblowers, and letting employees speak up without fear to top management.

However, even if a code is well-designed, it won’t affect an organization unless it’s properly
communicated, embraced, and supported by leaders at all levels. It needs to be consistently
applied throughout the organization.

Codes of ethics require an “ethics ecosystem” to be effective. In the end, a code is just words
on paper. It comes to life and gains legitimacy through the decisions and actions of people.

Frequently Asked Questions (FAQs)

9
1. What is a code of conduct?

A code of conduct is like a set of rules for how people should behave in a certain group or
organization. It helps everyone understand what’s expected and how to act properly. It’s a guide
for making good choices and treating others well.

2. Are the law and code of conduct the same?

No, law and code of conduct are not the same. Laws are set by governments and apply to
everyone, everywhere. A code of conduct applies to a specific group of people, like a
company’s employees, and it might have more specific rules than the law.

3. Why is a code of conduct important in a professional setting?

A code of conduct is crucial in a professional setting because it sets clear expectations for how
people should behave. It helps maintain a positive work culture and respectful environment,
ensuring that everyone understands the standards of ethical and professional behavior.
Additionally, it helps prevent misconduct, promotes accountability, and safeguards the
reputation of the organization.

4. What are the consequences of violating a code of conduct?

Violating the code of conduct can have consequences, ranging from a verbal warning
to termination of employment. The severity of the consequences depends on the nature of the
violation. The code outlines a clear process for addressing concerns and ensuring fair outcomes.

5. How often should a code of conduct be reviewed and updated?

The code of conduct should be a living document that reflects the company’s evolving needs
and industry best practices. It is recommended to be reviewed periodically (e.g., annually) and
updated as necessary. This ensures it remains relevant and addresses any emerging concerns.

6. Is a code of conduct legally binding?

No, the code of conduct might not be legally binding in the same way as a law. However, it is
a formal agreement between the company and its employees. By signing the code, you
acknowledge your understanding and commitment to its principles. Violations may still lead
to disciplinary action, up to termination of employment.

10