A code of ethics highlights an organization’s key ethical issues and identifies the overarching values and principles that are important to the organization and its decision making.
The code frequently includes a set of formal, written statements about the purpose of the
organization, its values, and the principles that guide its employees’ actions. An organization’s code of ethics applies to its directors, officers, and employees. The code of ethics should focus employees on areas of ethical risk relating to their role in the organization, provide guidance to help them recognize and deal with ethical issues, and provide mechanisms for reporting unethical conduct and fostering a culture of honesty and accountability in an organization. The" code of ethics helps ensure that employees abide by the law, follow necessary regulations, and behave in an ethical manner.
A code of ethics cannot gain company-wide acceptance unless it is developed with
employee participation and fully endorsed by the organization’s leadership. It must also be easily accessible by employees, shareholders, business partners, and the public. The code of ethics must continually be applied to a company's decision making and emphasized as an important part of its culture. Breaches in the code of ethics must be identified and
treated appropriately so that its relevance is not undermined.
Establishing a code of ethics is an important step for any company, and a growing number have done so. Figure 1-2 shows that almost 80 percent of surveyed companies have
developed a code of ethics and are very satisfied with it.
In March 2005, Business Ethics magazine rated U.S.—based, publicly held companies
using a statistical analysis of corporate service to seven stakeholder groups-employees,
customers, community, minorities and women, shareholders, the environment, and non-
U.S. stakeholders. The top IT company, based on performance between 2000 and 2004, was Intel Corporation, the world’s largest computer chip maker. Intel’s code of ethics is summarized.