Ishali: 11.𝗖𝗼𝗱𝗲 𝗼𝗳 𝗘𝘁𝗵𝗶𝗰𝘀

What Is a Code of Ethics?

A code of ethics is a set of principles intended to guide professionals in conducting business with honesty and integrity. A code of ethics document may outline the organization’s mission and values, guide on addressing problems, establish ethical principles based on the organization’s core values, and define the standards to which professionals are held

To evaluate corporate codes of ethics ethically, you must apply universal moral standards like trustworthiness, respect, responsibility, fairness, caring, and citizenship to the stages of content, creation, implementation, and administration.

Also called an “ethical code,” a code of ethics may encompass areas such as business ethics, professional practices, and employee conduct.

What Are The Different Types Of Codes Of Ethics?

Companies may create and implement different types of codes of ethics.

Here are the three major types:

1. Regulatory code of ethics

A regulatory code of ethics is one that companies are legally obliged to follow. For example, companies in the finance and public health domains may require to follow the ethical rules established by their respective regulatory bodies. Although some laws like the Indian Contract Act and the Sale of Goods Act apply to most businesses, some industries may be subject to specific ethical regulations, especially those related to workers' safety, welfare and the environment.

2.Voluntary code of ethics

A voluntary code of ethics is one that a business adopts willingly although they are not legally obliged to do so. For example, a business that does not necessarily focus on climate change might still detail its commitment to sustainability in its official code of ethics.

A voluntary code of ethics comprises the core values of the company. It includes the standards of conduct its employees are expected to follow. Such standards usually relate to the larger good of the community or the environment. Compared to regulatory codes of ethics, voluntary codes often require a greater amount of self-regulation.

Sometimes, a voluntary code of ethics may also require a third party to comply with certain values.

For example, a dairy products company may refuse to work with vendors that send calves to slaughterhouses or raise cattle in unhealthy environments.

3.Professional code of ethics

Several professions have ethical codes outlined by their governing bodies. For example, legal, medical and chartered accountancy professionals are required to follow the professional code of ethics set by their respective governing bodies, such as the Bar Council of India, the Medical Council of India and the Institute of Chartered Accountants of India.

These professional codes are based on ethical principles like integrity, transparency and fiduciary duty towards the clients and prevention of conflict of interest. Non-compliance with these codes may attract disciplinary actions from the governing body.

What Are The 12 Principles Of Ethics?