Corporate Ethics and Values

In: Business and Management

Submitted By pranavchheda
Words 2527
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Corporate Ethics And Values

- Pranav Chheda

Corporate Ethics

What is a Code of Ethics?

A code of ethics outlines a set of certain principles established by the corporation. These principles can be used both as the basis for requirements and limitations. Typically, a code of ethics is founded on a set of core principles or values and is not designed for expedience. These principles are illustrated with behavioral examples. Those subject to the code are expected to understand and apply the examples in situations the code does not specifically address. Organizations expect that the principles, once communicated and illustrated, will apply in every case, and that failure to apply the principles can be a cause for disciplinary action.

How is a Code of Ethics Created?

To create a code of ethics, an organization must define its most important guiding values, formulate behavioral standards to show the application of those values to the roles and responsibilities of the persons affected, review the existing procedures for guidance and direction as to how those values and standards are typically applied, and establish the systems and processes to ensure that the code is introduced and effective. Codes of ethics require lots of time to establish. Ideally, the development of a code will be a process in which Boards and senior management actively debate and decide core values, roles, responsibilities, expectations, and behavioral standards. Usually, codes of ethics are divided into five sections:

1. The introductory section, in which the organization introduces the code and explains why it is important, to whom it applies, and how it is to be used. The introduction also typically contains a personal statement by the CEO of his or her commitment to the values…...

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