Code of Business Conduct: Ethics, Standards & Examples

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  • 0:00 Definition of Code of Conduct
  • 0:32 What Are Ethics?
  • 1:24 Type of Business Codes
  • 2:22 Common Topics in…
  • 2:46 Examples
  • 3:47 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
It is important that businesses conduct themselves in a legal and ethical manner. In this lesson, you'll learn about codes of business conduct and how they relate to business ethics and standards. A short quiz follows the lesson.

Definition of Code of Conduct

A code of conduct is a set of organizational rules or standards regarding organizational values, beliefs, and ethics, as well as matters of legal compliance that govern the conduct of the organization and its members. Organizational members are responsible for adhering to the code of conduct and will be held accountable for failure to do so. Most large businesses will have a code of conduct, which are often developed in response to legislation regulating business activities and behavior or some sort of ethical scandal.

What Are Ethics?

Ethics refers to a system of belief regarding right courses of action or conduct. Ethical conduct is often viewed as conduct that is good for individuals or society as a whole. Ethics establish obligations and duties that people owe to others and society. Ethical standards are rules or principles established either by authority, such as a government, professional association, or employer, or a custom.

It is important to understand that ethics is a philosophical endeavor and not a legal one. Laws can coincide with a particular standard of ethics, deviate from it, or be neutral. What some people may view as ethical conduct may be illegal, and what some people view as unethical conduct may be perfectly legal. In any event, it is important that any business code of conduct requires compliance with the law.

Types of Business Codes

You can actually break business ethical codes into three broad categories that are based upon the approach each takes in maintaining ethical and legal compliance. Let's take a short look at each.

Codes of conduct typically prohibit behavior and inform employees what is expected of them. Codes of conduct often outline penalties for failure to comply with the code. Common topics include conflicts of interest, political contributions, and acceptance of gifts.

Codes of practice attempt to explain and illustrate the values and principles of the business. Instead of providing strict rules to follow, codes of practice educate employees on how things are done in the business. These codes attempt to empower the employee by making the employee an ethical decision maker.

Codes of ethics codify the values and principles of the company and define the responsibilities, duties, and obligations organizational members have to the organization and its stakeholders.

Common Topics in Business Codes

While the content of codes will vary from organization to organization, many will address common topics, including:

  • Conflicts of interests
  • Confidential information
  • Employment discrimination
  • Use of the organization's property
  • Financial reporting and accounting
  • Health and safety issues
  • Political contributions and campaigning in the office
  • Legal compliance issues relevant to the organization


While many businesses have developed customized codes of conduct, some international organizations have developed international codes of conduct. Some examples include:

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