Ethical code

An ethical code is a behavioral standard set by companies for their employees. These codes detail the manner in which employees are expected to conduct themselves morally, rather than their performance or quality of work.

Within a company structures, executives and managers should be strongly held to a code of ethics. These officers serve as an example to lower-ranking workers and employees. They should also encourage other employees to act in accordance with the company’s code of ethics, and may penalize others for acting against the company’s ideals.

Ethical codes can be broken down into three types: compliance-based codes, value-based codes, and professional codes. Compliance-based codes ensure that employees follow the legal rules surrounding an industry on behalf of a company. This stops individual employees from causing the company to be fined or penalized. Value-based codes ensure that all employees act in accordance with a company’s core values. This might mean acting with honesty and integrity, and pursuing a goal beyond profits. Professional codes are applied to industries in which employees have a legal obligation to act on behalf of clients. They ensure that employees prioritize the client first, even when such a decision is not the most profitable option.

Background

Ethics refers to any system of moral principles. Ethics are traditionally concerned with how people live their lives. The field commonly involves several broad questions that have been asked throughout much of human history. These include how humans should live a good life, what rights humans innately hold, how to make moral decisions, and how to define right and wrong.

In many cases, ethical concepts have come from religions. Some religions insist that their followers obey a particular ethical code. However, the field of ethics also draws from cultural histories and philosophy. Many ethicists assert that the field should be argued on a solely secular basis.

Ethical theories can be divided into three groups: meta-ethics, normative ethics, and applied ethics. Meta-ethics studies the field of ethics itself. It examines the origins of ethical principles, and studies the nature of moral judgement. Normative ethics studies how people define the terms “right” and “wrong,” as well as the content of moral judgements. Applied ethics studies how ethics interact with the real world. This includes studying the morality of controversial or complicated topics, such as war and capital punishment.

Ethics provide people with tools for thinking about situations in real life. The school of philosophy allows people to critically examine situations in which they might find themselves, then make an informed decision about which course of action might be the most beneficial to themselves or to society. Additionally, ethics may help people to examine why decisions made in the past have been harmful, allowing people to avoid repeating the same mistakes.

Ethicists also point out that the field is a philosophy, not a science. Different schools of ethics often disagree about how a given situation should be handled. For this reason, some ethicists argue that the true purpose of ethics is solely to provide clarity. Ethics teach people to effectively weigh all of their options in a given situation, then decide what the morally correct answer might be.

Overview

Businesses often use ethics to guide their practices. In doing so, they create a code of ethics, which guides professionals within the business in their choices. These codes are designed in a manner that ensures that anyone who represents the business is acting in a consistent, appropriate manner. Codes of ethics may outline the mission or core values of a business, provide advice for approaching problems, or discuss the manner in which members of the business are expected to conduct themselves. Common tenets included in codes of ethics include honesty, work ethic, professionalism, and integrity.

Codes of ethics also prevent members of a company from acting against the interests of the company. They may remind employees to act in a courteous manner toward one another, to work hard in pursuit of the company’s coals, and to act in a socially responsible manner. They may also remind employees to act in a manner that is nondiscriminatory and does not alienate other employees because of their physical characteristics, sexual orientation, or gender.

Management, executives, and other leaders within a business structure are expected to strictly adhere to the business’s code of ethics. They are expected to serve as examples to company workers, and to promote the code of ethics within the business. Additionally, they are sometimes expected to help monitor other employees, ensuring that everyone is acting in an ethical manner.

Compliance-based codes of ethics are designed to keep employees from acting in an illegal manner. Some industries, such as banking, medicine, and law, are bound by strict legal codes. If one employee at a firm breaks these laws, the entire firm might be held liable and penalized. In order to prevent this, firms develop strict codes of ethics that keep employees from violating the letter or spirit of the law.

Value-based codes of ethics are designed to keep employees acting in a manner that is consistent with a company’s core values. This may mean acting in a sustainable or environmentally friendly manner, obeying safety standards, or treating customers in a particular way. These attitudes or actions may not be legally required of the company, but may be important for the company’s reputation.

Professional codes of ethics are designed for people who work in industries affected by fiduciary duty. Individuals affected by fiduciary duty are legally obligated to act in the best interest of their clients. In order to best serve their clients, people bound by professional codes of ethics are required to act with respect, competence, and integrity.

In 2023, media reporting suggested that U.S. Supreme Court Judge Clarence Thomas had, for many years, been the beneficiary of opulent gifts granted to him by Republican party donor Harlan Crow. These gifts included a recreational vehicle, improvements to personal property, airline trips, and luxury vacations. The gifts appeared to skirt the boundary of expected Supreme Court ethical conduct. In addition, Thomas had refrained from reporting many of these gifts as required. Thomas’s wife Virginia had also come under scrutiny for her role in attempting to overturn the 2020 presidential election. Justice Samual Alito had also accepted extravagant gifts from a donor, Paul Singer, who had had been associated with several cases that went before the Supreme Court. This created negative impressions of conflicts of interests.

In response to public outcry over these perceived ethical lapses, in 2024, the U.S. Supreme Court agreed to adopt its first-ever code of ethics. The code presumably articulated expected conduct from justices, such as in their financial transactions. However, currently, the code lacks a specified mechanism for enforcement, nor does it outline expected repercussions for breaches of conduct in these situations.

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