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5 Benefits of A Code of Ethics

A code of ethics provides 5 main benefits to an organization: 1. It fosters an environment of trust and ethical behavior which improves productivity and prepares the organization to handle challenges. 2. It builds a good reputation by attracting customers and partners who value ethical companies. 3. It helps the organization remain compliant with laws and regulations. 4. It attracts outstanding employees who want to be treated fairly and ethically. 5. It promotes positive social change by making the world better for everyone.

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93 views

5 Benefits of A Code of Ethics

A code of ethics provides 5 main benefits to an organization: 1. It fosters an environment of trust and ethical behavior which improves productivity and prepares the organization to handle challenges. 2. It builds a good reputation by attracting customers and partners who value ethical companies. 3. It helps the organization remain compliant with laws and regulations. 4. It attracts outstanding employees who want to be treated fairly and ethically. 5. It promotes positive social change by making the world better for everyone.

Uploaded by

mulu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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5 benefits of a code of ethics

Sets the right culture


The most important benefit of a code of ethics is that it can foster an environment of trust,
ethical behavior, integrity, and excellence. When everyone, from the c-suite to the people at the
very bottom, plays by the same rules and behaves in a certain way toward one another,
productivity tends to grow as conflicts and confusions disappear from the workplace.

In this environment, employees who might otherwise be afraid to voice their opinion feel
encouraged to contribute, which is how good teams become excellent. Companies that foster an
environment of trust, ethical behavior, integrity, and excellence are also better prepared to deal
with unforeseen challenges because they have a very strong foundation to stand on.

#2. Builds a good reputation


Today’s customers look well beyond the price tag. With so many choices, customers gravitate
toward companies they feel they can trust, and they stay far away from those companies that
don’t promote ethical behavior. But it’s not just customers to whom ethics matter. Companies
that pay strong attention to ethics also find it easier to establish lasting partnerships both
within and outside their industry.

To see why ethical behavior is so important, we don’t need to look further than at the recent so-
called Weinstein effect, which is a term that’s used to describe a worldwide wave of sexual
abuse allegations against film producer Harvey Weinstein, which eventually gave rise to the
#MeToo campaign. After it spent months looking for a buyer or investor, The Weinstein
Company was eventually forced to file for bankruptcy because nobody wanted to touch it.

#3. Helps remain in compliance with laws and regulations


According to the landmark Sarbanes-Oxley Act of 2002, also known as the Public Company
Accounting Reform and Investor Protection Act, all individuals serving on boards and
organizational leaders of public companies are required to have a code of ethics to make major
corporate scandals like Enron and WorldCom less likely to happen.

Any promises a company makes and fails to comply with can make it amenable to sue for breach
of contract, so companies that implement a code of conduct have a strong incentive to ensure
ethical treatment of its employees, clients, partners, as well as the public.

#4. Attracts outstanding employees


Outstanding employees come from all walks of life, and they all expect to be treated justly and
ethically. Companies with a code of ethics reassure potential employees that they won’t be
discriminated against, sexually harassed, intimidated, bullied, or subjected to any other type of
workplace harassment.

Just last month, Linux Torvalds apologized for how he had been running the Linux kernel
community and adopted the Contributor Covenant, which is a code of ethics and conduct for
open source project, after years of driving away talented developers with his hostile behavior.

“In the interest of fostering an open and welcoming environment, we as contributors and
maintainers pledge to making participation in our project and our community a harassment-free
experience for everyone, regardless of age, body size, disability, ethnicity, sex characteristics,
gender identity and expression, level of experience, education, socio-economic status,
nationality, personal appearance, race, religion, or sexual identity and orientation,” states the
Contributor Covenant.

#5. Promotes social change


One less talked-about benefit of adopting a code of ethics is that it promotes social change. We
all live on the same planet and share the same finite amount of natural resources, so we’re all
responsible for the happiness or misery of one another. By promoting positive social change,
companies can contribute to making the world a better place for everyone, not just a select few.

Conclusion

In this day and age, companies cannot afford to focus solely on the bottom line anymore. The
ethical aspects of doing business are becoming just as important as the financial ones, and a well-
thought-out code of ethics is emerging as a necessary prerequisite for success.

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