Code of Conduct: An Introduction
A code of conduct is a set of guidelines that outlines the social norms, laws, obligations, expectations, and appropriate behaviors inside an organization. The International Good Practice Guidance (IGPG) gave a more thorough working definition of the phrase in 2007, defining it as the "principles, standards, values and rules of behavior that guide individuals and groups in the decisions, methods, and systems in the organization in a manner that contributes favorably to the welfare of the organization's stakeholders and respects the rights of all the constituents who are affected by the company's operations" (McMillan).
The Importance of a Code of Conduct
In order for businesses to successfully achieve their goals in the twenty-first century, ethics among the company's owners, shareholders, and management meet their objectives. The degree of the code of conduct is a major prerequisite in guaranteeing the balance of rights and interests of all the stakeholders, employees, clients, and the community. The code of conduct requires the company’s shareholders to become the compliance guarantors in respect to the director’s and management obligations. Ethics are a presupposition of a company’s rigorous compliance in applicable legislation in addition to the Articles of Incorporation and the internal operations’ regulations (Doig and Wilson 140).
The Role of a Code of Conduct in Ethical Culture
The code of conduct is critical in an organization in establishing an inclusive culture but it should not be mistaken to be a solution of its own in creating an ethical culture. An ethical culture is rather facilitated by the organization’s executives and management who exhibit their ethics through attitude and behavior. This paper will review and analyze the code of conduct for two companies, Clorox and Verizon Wireless. The two sets of the code of conduct will be compared and contrasted to find their similarities and differences, find the demanding and missing sections of the code, and determine what the codes specify about the employees’ course of action once faced with an ethical issue. The better code of conduct between the two companies will be identified and the rationale explained.
Comparison and Contrast
Similarities and Differences
In the comparison of the code of conduct between the Clorox Company and Verizon Wireless, several similarities and differences emerged regarding the structure and content of the documents. Both begin with a letter from the companies’ Chief Executive Officer. Benno Dorer, the Clorox Company’s CEO takes a more legalese language while the Lowell McAdam from Verizon takes a more casual approach in urging the employees to review the code of conduct. Both letters emphasis on the accountability and responsibility aspects brought about by the code of conduct, which is the framework that will guide employees in their daily business practices. The introductory letters set the tone at the top, outlining the importance of ethics and compliance to all employees and the company.Both codes of conduct are a reflection of the companies’ mission and values. For Clorox Company, the main values are 'doing the right thing', 'stretching for results', 'working together to win,' and 'taking personal responsibility' (The Clorox Company (a) 5). This is an elucidation of the concept that the code of conduct is simply a clarification of the company’s mission, principles, and values by associating them with standards of professional conduct. This is also the case in Verizon’s code of conduct. Verizon’s mission and value statement, which is to foster a diverse and inclusive environment, is inevitably reflected as the main concept in its code of conducts.Integrity is the governing ethic for both codes of conduct.
The strategy based on integrity is holding Clorox and Verizon to a more robust standard. The organization’s integrity is based on a self-governance concept of to the while following the set of guiding principles. Verizon, for instance, has its core values as integrity, respect, performance excellence, and accountability (Verizon 4). From the integrity perspective, these values have been set up to create an environment supportive of ethical sound behavior while instilling a sense of shared accountability among the employees. By this rationale, both codes of conduct are integrity-based rather than compliance-based. While the compliance-based codes of conduct use legal terms, rules of conduct, and non-compliance techniques, Verizon’s and Clorox codes of conduct only offer procedures and policies of reporting ethical violations and concerns.
Verizon Wireless has comprehensively covered equality, diversity, and inclusivity ethical issues in contrast to Clorox, who have not given provisions for these principles. Verizon is hugely against discrimination, work violence, and harassment, as well as an advocate for employee privacy, diversity, and equal opportunity commitment. This may be due to the fact that Verizon Wireless is a service company while Clorox is in the manufacturing industry. It is critical for a code of conduct to cover the relevant and most significant risk areas. A manufacturing company like Clorox may have to put more emphasis on the compliance of technical policies such as environmental, safety and health laws and regulations, exports controls, and human rights than professional services and customer treatment.The difference in code content and the depth of coverage between Verizon and Clorox on the specific topics have varied according to the individual corporate objectives, the company’s regulatory environment, the intended audience, culture, and customs.
The structure of Verizon’s code of conduct is also quite different from Clorox’s. Verizon’s structure and focus are on maintaining an inclusive, healthy, and fair work environment, maintaining integrity in the workplace and in the marketplace, and protecting the company’s assets and reputation (Verizon 5). Clorox’s company’s code of conduct structure encompasses the following; why they have a code and its significance to the organization, speaking (guidance and voicing concerns), doing the right thing, how Clorox upholds the code of conduct and its core values, taking personal ownership, working together to win, and stretching for results (The Clorox Company (b)).
Missing and Demanding Sections
The standards of wording or inclusion of elements in the code of conduct for corporations is vague and unclear, and each organization develops its own in accordance with its needs. The ideal code of conduct should, however, suit the needs of the personnel through defining their expected behavior while addressing challenges, risks, and the industry’s customs (Webley and Werner 407).The lack of diversity, inclusion, and equality in Clorox’s code of conduct is gaping, and drafting these codes would have facilitated adherence to practices that ensure the elimination of discrimination in the workplace. Employees and customers of the company are entitled to equal treatment and provided with the same opportunities irrespective of their gender, race, and sexual orientation, age, or any other differences. Equality is about the promotion and fostering of individuals' right to be different and free from any kind of discrimination. The employees, customers, shareholders, and suppliers have a choice and dignity with a right to their own different values and beliefs. Diversity policies are about creating a corporate culture that values people's differences and variety for the benefit of the individuals, organization, and society. The key benefits of equity and diverse management that Clorox is missing out on due to omission from its code of conduct are, for instance, the company will not have a more balanced and representative workforce, and lack a better comprehension of the market segments (McMillan).A code of conduct can be rendered ineffective if it has been inadequately designed and overly demanding of the employees. For instance, in Verizon’s code of conduct, conflicts of interest have been narrowly addressed on the employees' part, in the personal and political aspects. Employees are required to keep their personal contributions and activities separate and distinct from the organization but at the same time are encouraged to participate in political activities and lobbying. Employees are also not required to consult or aid any outside organization or individual, with or without compensation. Employees have been limited to perform any external work and are required to receive written approval from the management or supervisor even for charitable activities. This does not address the wider obligations of the employees which are serving the community around the organization with disregard for the employee's other genuine commitments. The main reason for the poor design might be the management wanting to draw codes that will protect Verizon from being harmed by employees’ misconduct rather than encouraging an endemic ethical behavior among employees. According to Robin et al., who carried out an analysis of US companies’ codes of conduct, organizations have unrealistic expectations of their employees to be dependable organizational citizens while at the same not do anything that might harm the organization (66). With this rationale, Verizon misses a number of ethical issues that will work for it as an organization and make the employees appreciate guidance.
Reporting the Violation of Conducts Framework
Clorox has set up mechanisms for reporting misconduct in its second part of its code. The code states that every individual in the organization has a responsibility for self, the co-workers, and the Clorox itself. It urges all the employees to be alert to all the activities going around them and encouraging them to speak up once they suspect illegal and unethical conduct (Dorer). The framework for reporting misconduct in Clorox has been provided as follows; once an individual suspects illegal or unethical behavior or the occurrence of the code violation, he/she should take the matter to the supervisor, local management, human resource, or legal services departments for investigation. There is also an anonymous compliance hotline that can be contacted through an online, mail, or phone platform. The organization takes cases of code violations and unethical behavior seriously and promptly investigates them, handles them with discretion and confidentiality, and takes appropriate action (Dorer). Clorox has a zero tolerance policy on retaliation against individuals who have raised their ethical concerns in good faith. The zero tolerance policy at Verizon mostly concerns discrimination, sexual harassment, and harassment based on religion, gender, sexual orientation, disability, status, or race. Verizon is also intolerant of workplace violence such as hostile and abusive behavior (Verizon, 2015).
Verizon’s reporting policy is an ‘open door’ approach where "everyone is free to speak his or her mind in respect to ethical concerns" (Verizon, 2015, p. 9). Everyone should report any suspected violations of the code of conduct, Verizon’s policy, and the law. The company then investigates the reported occurrences of questionable unethical behavior. The criteria for evaluating a violation of the code before reporting have been specified through questions such as; is the conduct dishonest, unlawful or unethical? Can the conduct harm Verizon through loss of credibility and reputation? Can the conduct harm the employees, investors, or customers? If the answer to any of the questions is yes or maybe, one has successfully identified a potential violation that must be reported (Verizon, 2015, p. 9). The company has set up an anonymous, confidential complaint and inquiry platform known as the Compliance guideline, which has a contact number. Violence, hostile behavior, and weapons possession in the workplace or company’s property should also be reported immediately to the premise security, management, or supervisor. Regarding financial misconduct and auditing complaints, questions, and concerns, Verizon stipulates that these integrity issues should be reported to the Internal Audit department, for which they have provided an email address (Verizon, 2015, p. 10).
Better Code of Conduct
In the code of conducts, 'the devil is in the details'. The most effective code of conducts must have a balance between specificity and breadth. A good code of conduct is easily manageable by the company’s employees and it focuses on the clarity and communication of the standards of ethics rather than having a complex set of legal elements that are hard to follow (Gilman 40). For these reasons, the Verizon Wireless code of conduct has been better than Clorox’s. The Clorox code of conduct was also fraught with some generalizations, for example, the company states that "we exercise fairness and honesty in everything we do" (The Clorox Company (a) 3) in comparison to Verizon’s "our integrity is the core of who we are in which we establish our relationships… and follow sound business practices in our dealings with owners, competitors, customers, and suppliers" (Verizon 3). Verizon’s code of conduct seems to achieve the right balance of specificity and simplicity, and its focus on the employee rather than a general code of conduct for all parties concerned, as in Clorox’s, makes it a more solid framework to address the ethical issues in the workplace.
Encouraging Employee Compliance
Formalizing the company’s standards and values in which employees can follow through the development of a code of ethics is only the first step in ensuring they can behave in an ethical manner. Once the establishment of the code of ethics is complete, employees can be encouraged to follow them through ethics training, setting and following the procedures and policies, setting examples through the leaders, and including the employees' ethical conduct in the performance appraisals. Employees must first understand the code of ethics, and an annual training offers them this opportunity to gain a deeper comprehension of the company’s values and ethics. Ethical training can be conducted in the induction process, specific training sessions in the workplace, and management training programs (Sekerka 82). Employees can also be involved in the review of the firm’s code of ethics, whereby, for instance, they can collectively develop their own code of conduct, provided they align with the company's, customer's, shareholder's, and vendor's expectations. An organization should also have a policy and procedure that will ensure the appropriate following of the code of ethics. The procedures ascertain that all employees are dealt with equally and fairly. These procedures and policies include disciplinary procedures and employment policies (Nicholson 452).
Works Cited
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Robin, D. G., Giallourakis, F. R. David, & Moritz, T. E. (1989). A different look at codes of ethics. Business Horizons 32:1, 66-73.
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The Clorox Company (a). Code of Conduct. The Clorox Company, 2016 https://www.thecloroxcompany.com/wp-content/uploads/code-conduct-2016-external-eng.pdf Accessed April 16, 2017.
The Clorox Company(b). Codes of Conduct. The Clorox Company, 2017 https://www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct/ Accessed April 16, 2017.
Verizon. Your Work Your Code of Conduct Your Verizon. Verizon, 2015 http://www.verizon.com/about/sites/default/files/Verizon-Code-of-Conduct.pdf Accessed April 16, 2017.
Webley, S., & Werner, A. Corporate Codes of Ethics: Necessary but not Sufficient. Business Ethics: A European Review Volume 17,4,(2008), 405-415.
