The Purpose and Role of a Code of Ethics

A Code of Ethics not only provides guidance to employees—it also sends a clear message to customers, investors, suppliers, partners, and even competitors about the organization’s commitment to integrity and ethical business conduct.

Recent research by the Institute of Business Ethics (2024) shows a shift in priorities: the top reason companies adopt a Code of Ethics is now to create a shared ethical culture, surpassing the previous main reason of simply providing guidance to staff.

An organization’s Code of Ethics reflects how it operates its business model, how it interacts with the communities in which it operates, and how it lives out the corporate values it holds most important.

Every organization must set its own standards for what it considers acceptable behavior. Because no two organizations share the exact same values, each Code of Ethics should be uniquely tailored to reflect its culture, principles, and priorities.