Difference Between Code of Ethics & Conduct

Every business should have a set standard of guiding principals that drive the company's mission forward. A code of conduct states how employees should act, which is often derived from the code of ethics. The code of ethics and code of conduct often work hand in hand, although they are not one code but two codes that have become a single guiding principle.

The code of ethics is a moral standard that the company expects employees to follow. At a minimum, ethics guidelines are established by the laws and industry regulations. A business can exceed minimum ethics guidelines to ensure that employees feel safe, avoid situations where they feel harassment or discrimination. Conflicts of interest are also addressed in a code of ethics. A well-written code of ethics that's adhered to builds trust among employees and establishes credibility with partner companies and consumers.

Consider these 10 examples of a code of ethics standards:

• Money management: How cash, credit cards and checks are handled.
  
• Diversity rules: Creating inclusive environments free of discrimination.
  
• Sexual harassment rules: Prevents unwanted sexual misconduct.
  
• Employee privacy: Helps employees feel comfortable to come to work.
• Consumer privacy: Builds confidence that the company cares.
• Licensing requirements: Required by law for some industries.
• Security measures: Employers are required to create safe working environments.
  
• Truthful statements in sales: An ethical standard required by some industries.

• Environmental policies: Following regulations and best practices to be green.

• Fair hiring practices: Preventing discrimination in hiring.

These are a few areas that have government regulations and laws that set the standard. Some companies exceed the laws and regulations setting a higher ethical standard. For example, a company may legally be bound to the state minimum wage but chooses to increase its base pay for entry-level positions to attract better people and talent likely to remain loyal.

Unlike a code of ethics, a code of conduct states how the company expects employees to behave. Ethics are higher level concepts, whereas the code of conduct gets down to specific action expectations. Where the code of ethics might state that all employees must obey all safety protocols, a code of conduct explains the distance from an oxygen tank employees are allowed to smoke.

Another code of conduct example might require everyone to protect consumer data. This is a law and sets a general guideline for all employees. However, the accounting department might follow a higher set of privacy protocol set forth in the code of conduct. A call center might require that all personal items be left in a locker to prevent accidentally capturing or removing consumer personal information.

It is easy to see why a code of ethics and a code of conduct may be confused or used interchangeably. Both have goals of setting a standard of behaviors from employees. The primary difference is that a code of conduct is less morally driven than a code of ethics. For example, the code of conduct might require all employees to wear a specific color or a company shirt when in the office. This is not an ethical issue, but it is a conduct issue designed to create cohesiveness among employees.

In other words, the code of conduct may not always be ethically driven, but every code of ethics scenario should have a corresponding set of rules in the conduct code. Every business should have a clear vision, when it comes to ethics and conduct. What that happens, then employees work better as a team, job satisfaction increases and performance improves when companies set the tone with meaningful ethical and conduct standards. The result is a positive corporate culture, in which people want to go to work and that consumers enjoy working with these employees.