The American Medical Association was one of the first professional groups to adopt a code of ethics.
Businesses and professional organizations often adopt codes of ethics or codes of conduct to help guide workers in their decision-making on the job. Codes can provide guidance for acceptable kinds of behavior, promote high standards on the job, create a set of benchmarks to evaluate performance and strengthen a company's or profession's identity.
Ethics vs. Conduct
Although some businesses use the terms interchangeably, a code of ethics is often defined differently from a code of conduct. A code of ethics tends to center on broad principles and aspirations, while a code of conduct provides guidance that relates to specific behaviors. For example, the government of South Korea has both a "Public Service Ethics Act" and a "Code of Conduct for Public Officials."
Businesses
Businesses can have many reasons for adopting a code of ethics or code of conduct. In some cases, companies are motivated by regulations. For instance, the Sarbanes-Oxley Act of 2002 requires that public companies either create a code of ethics or explain why they do not have one. The U.S. Federal Sentencing Guidelines reduce penalties for ethics violations if companies can prove that they had codes in place aimed at mitigating such problems. Some advocates of ethics codes maintain that they are also good for business, since criminal penalties can become costly---both in terms of fines and in the loss of customer trust.
Professional Organizations
Some professional associations have their own ethical codes. Such codes often predate those for individual companies. The American Medical Association, for example, adopted its first code of ethics in 1847. At least 130 professional groups representing, for example, attorneys, civil engineers, journalists and optometrists drafted codes of ethics in the early 20th century. Some business scholars argue that ethical codes date back much earlier, to the Hippocratic Oath or Hammurabi's Code.
Ethics Programs
A code of ethics or code of conduct is often part of a larger mechanism to guide behavior within companies or professions. In addition to creating a code and distributing it among employees, many businesses establish an ethics hotline that workers can call to report ethics violations anonymously. Such hotlines often fall under the auspices of third-party companies in order to ensure employee confidentiality. Some businesses also hire a chief ethics officer to oversee the implementation of the code. The chief ethics officer often works closely with a company's law and human resources departments.
Problems
Having these kinds of codes in place does not necessarily prevent ethical problems from arising. Despite having "Standards of Business Conduct," Microsoft paid more than $2.4 billion in fines to the European Union for antitrust violations, for example. Alcoa, which has won awards for its ethical business practices, was accused in 2008 of bribing public officials in Bahrain.
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