The impact of the code of conduct on the ethical outlook of a company.

A code of conduct is essentially a set of rules which govern the behaviour of an employee in an organization. It consists of the company culture, the standards that the employees are required to adhere to, and the values of the company, which helps the third parties in deciding if they want to work with that company or not, based on such values. For that purpose, a company’s code of conduct should be easily accessible to all parties engaging with the company.

A code of conduct, is basically, a reflection of a company’s values. This is because it entails the workings and structure of a company’s outlook on behavioural aspects and lays down the general company culture. Therefore, there can’t be one set sample of code of conduct which can be followed by all companies, a code of conduct needs to be properly tailored to adhere to each company’s framework. But, certain things need to be kept in mind while formulating the code of conduct, i.e., it should explain in brief the meanings of the various terms mentioned in the code, it should be comprehensive enough to cover as many bases as possible to enable the employees in better understanding of how they should behave while working each day and it should contain a foreword from the senior management of the company to lay down their take on the code of conduct. The last part of it is important because it strongly lays down the understanding of the leaders and inspires the employees to adhere to the same.

It should contain all the dos and don’ts that the employees should follow while at work. Essentially, there should be no ambiguity left in a document as important as the code of conduct, because such ambiguities lead to blurred lines, which could lead to the breaking of rules. A clear understanding of the rules mentioned in the code of conduct will help the employees in engaging with the customers in a better manner. In furtherance to laying down the behavioural aspects that an employee needs to follow, the code of conduct allows lays down a mechanism by which the employees can report any violation of the company policy mentioned in the code of conduct and also entails consequences of such violations.

We can see that the federal legislation of countries like the United States have provisions for Chief Compliance Officers, who not only focus on illegal acts, but also unethical acts, whereas in India, compliance officers still mainly focus on legal issues, and little attention is paid on the ethics of it when it comes to governance. Thereby, a need for the addition of ethical compliances and its governance is needed in a country like India. In India, oftentimes it has been observed that the position of a compliance officer is filled by the top management itself, in companies like Tata Steel wherein the managing director fills that position.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.