Code of Ethics for Small Businesses

By Roberta Fisher, Gadd Business Consultants

It’s on the news constantly about another person or company that is being charged with unethical behavior.  Code of Ethics are not just for the corporate giants, but for all businesses that want a growing business, a good reputation and honest and long- standing employees.  Simply said “Ethics” is knowing what is right and wrong and then doing the right thing. 

Having a written Code of Ethics is beneficial for the customers by informing them your company is positive and proactive and to employees by letting them know what behaviors are acceptable or not.  Don’t place too much attention on the codes themselves, it is more important to continue developing and having talks with all the people that the codes effect, in order to keep them up to date.

A written code of Ethics should focus on the top 5 to 10 ethical values which are priorities for your company and type of business.  It is best to have the owner(s), managers and a few employees establish the code of Ethics.  Involving employees in the developing stage will make it easier for them to accept and understand the guidelines. This will bring to light any current major issues, what the cause of the issue is and what values, rules or regulations that need to be put in place to avoid this in the future. 

The company mission and value statements are an excellent starting point when developing the code of ethics for your company.   It says exactly what you want your company to accomplish and by what methods. 

There are several items that should be standard no matter what type of business you have, accuracy of financial reporting and statements, handling of conflicts of interest, safety in the workplace, sexual harassment polies, hiring practices, environmental standards and laws and regulations that pertain to your type of business. 

Examples of some ethical behaviors you might include are trustworthiness, respect, responsibility, justice and fairness, law abiding, accountability, tolerance and loyalty.

There are many benefits of having an established Code of Ethics and reviewing them at least yearly.  Ethics help maintain a moral course in turbulent times, cultivate strong teamwork and productivity, support employee growth, act as an insurance policy (policies are legal), avoid criminal acts of omission and help manage values.

Once you have established a Code of Ethics make sure management and all employees adhere to them and demonstrates them.  Be sure to post them for all to see and refer to.

Reference: A Written Code of Ethics is Critical for Small Businesses by iBuzzle Staff

Complete Guide to Ethics Management: An Ethics Toolkit for Managers by Carter McNamara, MBA, PhD