Getting ‘CLEAR’ about creating and updating your code of conduct: Why it matters
While only publicly-held companies are required by law to have a formal code of conduct, every organization – no matter the size – should give creating and maintaining this document top priority.
A code of conduct commits an organization to complying with applicable laws, which is certainly critical. Almost equally important, however, it describes the core vision and set of values that drive your organization’s dealings with its employees, customers and the broader society in which you operate.
Because it’s so foundational, it’s a good idea to revisit this document regularly to be sure it reflects changes to the law and to the organization itself.
What to look for
Management restructuring, strategic evolution and branding changes are all examples of things that should be reflected in a company’s code of conduct. Here are five areas the Association of Corporate Council recommends you look at when developing or refreshing your company code of conduct. The group gathers its recommendations under the “CLEAR” banner – compliance, leadership, engagement, alignment and resources.
Compliance reviews for both new and revised codes should be conducted together with your in-house counsel or an external law firm or compliance expert. Your own team should include representatives from all key functions within the company. This group will help point out needed changes to an existing code of conduct or make sure a new code captures all relevant compliance and addresses the specific business ethics affecting your company.
Code of conduct is a pledge
These aren’t empty words. Your code of conduct is a pledge by your leaders that they embrace and will live up to the organization’s stated values and guiding purpose. Employees, business partners, clients – and even regulators and the courts – will judge you on how well leadership practices match that pledge.
A carefully crafted code of conduct is critical to employee engagement. More and more workers report that working for a purpose-driven organization feeds their satisfaction with their jobs.
Of course, companies change direction over time, whether through mergers and acquisitions or by entering new markets. Those changes need to be addressed in your code as well.
Keep the language clear, too
Keeping the language plain and straightforward is important because your employees want to know what they’re working towards. And don’t forget this holds true for non-native English-speaking employees, too. It’s worth the small investment to translate your code of conduct as appropriate.
A true alignment between code and conduct is very important. Even if your organization’s demonstrated values and code of conduct are entirely admirable, neither will look authentic to internal or external audiences if they don’t line up precisely.
Make sure these things evolve together so that anyone looking at your code of conduct can see it truly describes how your organization acts. And include in your code specific examples of how all employees can help uphold and demonstrate your values.
This is not a place to skimp
All these steps require investments in time and money. Whether you’re creating a code of conduct for the first time or making minor tweaks, be sure that you understand the resources will be required to complete the effort. And then be sure to dedicate enough time, people, and money to get the job done and to keep your code updated to reflect changing laws and the evolution of your organization’s mission and strategy.
