Employee Code Of Conduct: A Company’s True Colors

Employee Code Of ConductAn employee code of conduct is something the public rarely takes an interest in, and yet this is where a company often shows its true colors (for better or worse). The employee code of conduct is a written document detailing the values, rules and expectations that a company wishes its employees to uphold and that it believes are inseparable from the company’s success. Below you will find the many purposes of a code of conduct, as well as examples of how it is developed and written.

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Lost Without It

Any time you are hired by a new organization, you most likely receive a copy of the employee code of conduct. Large companies tend to have large codes; small companies tend to have small codes. The reasoning behind this is fairly simple and is largely due to there being a wider range of employees at large companies.

The employee code of conduct serves as a reference and safe-guard. It ensures that all employees are on the same page when it comes to conduct, and that they are aware that precise standards exist. These standards help the company attain the highest possible degree of business ethics and performance. It functions almost like absolute law and provides a reference in times of doubt and retribution.

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Short And Sweet

The best codes of conduct are the ones that are simpler (this is a matter of opinion of course, but that is mine). A simpler code of conduct is really the only kind that is manageable. Even a relatively brief employee code of conduct, such as this 16 pager from Fannie Mae, is completely unwieldy. An employee needs to be able to hold the bulk of the code in mind at all times; 16 pages makes this impossible.

Where Most Codes Go Wrong

Not only does Fannie Mae’s code address, in detail, what it believes and finds acceptable, it details everything it finds unacceptable, and it does this in every section of the code. This is borderline humiliating and completely unnecessary. You do not need to say, for example, that colleague confidentiality is held dear and then detail all the ways in which an employee can steal another employee’s identity.

While I am not a Christian, this would be like writing one of the ten commandments, “Thou shall not kill,” and then listing all the different ways you can murder someone.

Writing The Code

Let’s look at the common chapters and topics that are addressed in employee codes of conduct:

  • The Company Code or Credo

This is like the employee code of conduct, but for the company as a whole. It describes what the company aims to do and how the company serves its customers and communities. This is usually much shorter than the employee code of conduct, often no more than a few paragraphs long. For obvious reasons, employees are expected to be familiar with this code, as well.

  • Core Values

Similar to the credo, the core values will list, very plainly, the company’s vision moving forward, its main principles and its ultimate mission. These are largely formalities; a company is supposed to have a quotable mission statement, right?

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  • General Guidelines

Now the employee is addressed directly for the first time. General guidelines are set and usually include the most obvious values: Building Trust, Taking Responsibility, Respecting Yourself And Others, Cultivating A Culture, Setting Examples, etc.

These are included for good taste. What company would not want to stress these things? What company would risk being caught with an unethical code of conduct?

  • Law: Clarification

Now things start to get serious. A company will often include a protective clause that states that the employee understands that he or she must abide by the rules set forth and, when in doubt, always refer to the code of conduct or a resource expert.

  • Competition Clause

This clause serves a simple purpose: to remind the employee that the company is dedicated to fair and ethical competition. The company will make the best possible product and put its faith in the product; it will not, of course, engage in illegal activity to boost sales, such as soliciting gratuities or assisting in illegal boycotts.

  • Proprietary Information

This is a fancy way of saying that the employees will not infiltrate the competition and use illegal means to steal the competition’s secrets. Think of it as an anti-plagiarism clause. This is actually a very important principle that is often undervalued. Learn the value of corporate responsibility with this blog post on the importance of business ethics.

  • Confidentiality

We all know what this means: employees will keep all company information private and confidential. This includes everything from a simple fax to the details of investment meetings, from a bathroom discussion to a 300 page proposal. While every company has a competition clause and proprietary agreement, they will take advantage of any information made public, which is not protected by law.

  • Safety Regulations

This will be included in the employee code of conduct, but it is likely that it will receive its own manual; how to maintain the safety of yourself and other employees.

  • Conflicts Of Interest, Gifts, Accountability, And Everything Else

At this point, each company takes control of its own code of conduct. Much of the remainder of the code will involve employee-to-employee interactions, holding yourself accountable, advice on how to determine which gifts are acceptable and which are not, how to be loyal, how and how not to use company resources, how to handle the media, etc. These are the sections where significant variation exists, and therefore are the ones you should read most carefully.

Needless to say, an employee code of conduct will only take your business so far. You need to learn how to lead by example and to have something more than a piece of paper to uphold values. Learn how to lead, manage and motivate people with this ultimate people management course.