Code of Ethics and Code of Conduct are both common terms used in the business world and share many of the same characteristics. They may also be used interchangeably by some and/or organizations, which can often confuse when determining what the two mean and how they differ from one another. This article will help to separate and identify the differences between a Code of Ethics and vs Code of Conduct and provide examples of each that organizations can use as templates to create their codes to set the standard on how they want their organization to behave accordingly, be it in public or behind closed doors.
Definition of Code of Ethics:
A code of ethics provides an organization with a set of principles that describe its behaviours. Codes typically include issues like confidentiality, discrimination, conflict of interest, harassment, and whistleblowing. They are often enforced by an outside entity such as the law or governing body. An example of a Code of Ethics is the General Data Protection Regulation (GDPR) in Europe which will come into effect on May 25th, 2018. The GDPR is created to enforce privacy rights and give people more control over their data. It also applies to all companies who do business in the EU, not just those based there. Penalties for violating it can be fines up to €20 million or 4% of annual global turnover – whichever is greater.
Definition of Code of Conduct:
A Code of Conduct is a written set of rules and standards that every employee must obey. It tells people what to do, as well as what not to do, in the workplace. For example, most codes of conduct prohibit sexual harassment and discrimination. Codes of conduct may also contain provisions for respecting confidential information or company property.
Differences Between Code of Ethics and Code of Conduct:
- The Code of Conduct is very general, while the Code of Ethics is more in-depth.
- A Code of Conduct usually only applies to those within the company, while a Code of Ethics is usually required for those working on behalf of the company.
- A Code of Conduct might dictate how employees should dress, while a Code of Ethics typically addresses ethical decisions made within the company.
- A Code of Conduct will be limited to one profession or industry, but a Code of Ethics may apply across many different industries.
- Codes of Conduct are typically not enforced by law, but Codes of Ethics are often subject to legal penalties for violation.
- Codes of Conduct usually address specific situations, while Codes of Ethics are broader in scope.
- Many companies do not have a Code of Conduct, but most do have a Code of Ethics.
- Codes of Conduct are written by management, while Codes of Ethics must be approved by upper management.
- In cases where there is no Code of Conduct, the Code of Ethics becomes standard protocol.
- Violations of a Code of Conduct are punishable by firing or other means, while violations of a Code of Ethics can result in fines or jail time.
- The ultimate goal behind Codes of Conduct is to protect employers from liability, while the goal behind Codes of Ethics is to protect customers from unethical behaviour.
- Codes of Conduct are intended to protect the interests of an organization, while Codes of Ethics exist to maintain public trust.
- There is no set punishment for breaking a Code of Conduct; however, violating a Code of Ethics can lead to criminal charges.
- Depending on the severity of the violation, punishments for violations of the Codes of Ethics range from fines to jail time.
- Organizations without Codes of Conduct are advised to use a Code of Ethics as a guideline instead.
- An organization without either a Code of Conduct or a Code of Ethics runs the risk of facing lawsuits for illegal activity.
- For companies that already have a Code of Conduct, it is important to ensure that all new hires sign this document.
- To best comply with their policies, managers need to keep up-to-date copies of both their company’s code of conduct and code of ethics at hand during meetings
Conclusion:
The key difference between a Code of Ethics and a Code of Conduct is that the former is applied to employees as well as non-employees while the latter is only applied to employees. For example, a Code of Ethics would cover how an employee should behave in their public life, such as what they say on social media or about the company in public.