A Code of Ethics for CorporateCode of Ethics

Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration).     

Tone at the Top: An Ethics Code for Directors?

Recent corporate scandals have focused the attention of a broad set of constituencies on reforming corporate governance. Boards of directors play a leading role in corporate governance and any significant reforms must encompass their role. To date, most reform proposals have targeted the legal, rather than the ethical obligations of directors. Legal reforms without proper attention to ethical obligations will likely prove ineffectual. The ethical role of directors is critical. Directors have overall responsibility for the ethics and compliance programs of the corporation. The tone at the top that they set by example and action is central to the overall ethical environment of their firms. This role is reinforced by their legal responsibilities to provide oversight of the financial performance of the firm. Underlying this analysis is the critical assumption that ethical behavior, especially on the part of corporate leaders, leads to the best long-term interests of the corporation. We describe key components of a framework for a code of ethics for corporate boards and individual directors. The proposed code framework is based on six universal core ethical values: (1) honesty; (2) integrity; (3) loyalty; (4) responsibility; (5) fairness; and (6) citizenship. The paper concludes by suggesting critical issues that need to be dealt with in firm-based codes of ethics for directors.     

The role of moral intensity in moral judgments: An empirical investigation

Jones (1991) has proposed an issue-contingent model of ethical decision making by individuals in organizations. The distinguishing feature of the issue was identified as its moral intensity, which determines the moral imperative in the situation. In this study, we adapted three scenarios from the literature in order to examine the issue-contingent model. Findings, based on a student sample, suggest that (1) the perceived and actual dimensions of moral intensity often differed; (2) perceived moral intensity variables, in the aggregate, significantly affected an individual's moral judgments; and (3) some dimensions of moral intensity (namely, perceived social consensus and perceived magnitude of consequences) mattered more than others.Sara A. Morris is Assistant Professor of Management at Old Dominion University. Her current research examines corporate codes of ethics, attitudes about corporate social responsibility, and the relationship between corporate social and financial performance.Robert A. McDonald is a doctoral candidate in organizational studies at the State University of New York at Albany. His research interests include ethical decision making, characteristics of moral dilemmas, and leadership power and influence tactics.     

The moral discourse of banks about money laundering: an analysis of the narrative from Paul Ricoeur's philosophical perspective

In this paper, we will use Ricoeur's philosophy in order to present money laundering as a metaphor and a narrative. We will firstly analyze the corporate moral discourse of 10 banks about money laundering. We have selected 10 banks that have codes of ethics and a corporate moral discourse about money laundering. The banks come from six countries: United States (2), Canada (2), Switzerland (2), Spain (2), Germany (1), and Belgium (1). We will see how their moral discourse about money laundering contributes to deepen the understanding of money laundering as a narrative. Then, we will see to what extent Ricoeur's philosophy could help us to better understand the moral discourse of banks. We will describe the main components of money laundering as a narrative.     

Global Business Citizenship and Voluntary Codes of Ethical Conduct

This article describes the theory and process of global business citizenship (GBC) and applies it in an analysis of characteristics of company codes of business conduct. GBC is distinguished from a commonly used term, “corporate citizenship,” which often denotes corporate community involvement and philanthropy. The GBC process requires (1) a set of fundamental values embedded in the corporate code of conduct and in corporate policies that reflect universal ethical standards; (2) implementation throughout the organization with thoughtful awareness of where the code and policies fit well and where they might not fit with stakeholder expectations; (3) analysis and experimentation to deal with problem cases; and (4) systematic learning processes to communicate the results of implementation and experiments internally and externally. We then identify and illustrate the three attributes of a code of conduct that would reflect a GBC approach. The three attributes are orientation, implementation, and accountability. The various components of these attributes are specified and illustrated, using website examples from six global petroleum companies.     

A Kantian approach to codes of ethics

The paper discusses whether codes of ethics are Kantian notions through an analysis of their intention and structure. The article also discusses some of the ideas put forward by William Starr in his article, Codes of Ethics — Towards a Rule-Utilitarian Justification,Journal of Business Ethics 2(2) (May 1983).The paper refers to recent definitions of codes of ethics and considers reasons for the proliferation of such codes. It examines the moral justification for these codes and analyses the underlying ethical theory particularly in relation to Kantian ethics. There is an account of how Kant's views of the source of morality and moral obligation, the structure and nature of Kantian moral law and the role of the individual and his/her relationship with others, which is relevant to the development of a theoretical base for codes of ethics. There is some discussion of potential problems in the practical application of Kantian ethics to a specific code.Jacquie L'Etang studied for her BA(Hons.) in American and English History at the University of East Anglia, her MA in Commonwealth History at the University of London and her M.Sc. in Public Relations at the University of Sterling. She worked for a year in the External Relations Department of the London School of Economics and for eleven years at the British Council a period which included four postings in the public relations and design and editorial departments. Since 1989 she has been Assistant Director of the M.Sc. in Public Relations by Distance Learning and in 1991 completed her second dissertation on corporate social responsibility for her M. Phil. in Social Justice which she studied for at the University of Stirling's Philosophy Department.     

Codes of Ethics in Hong Kong: Their Adoption and Impact in the Run up to the 1997 Transition of Sovereignty to China

Following a government campaign run by the Independent Commission Against Corruption (ICAC) in 1994, many Hong Kong companies and trade associations adopted written codes of conduct. The research study reported here examines how and why companies responded, and assesses the impact of code adoption on the moral climate of code adopters. The research involved (a) initial questionnaire surveys to which 184 organisations replied, (b) longitudinal questionnaire-based assessments of moral ethos and conduct in a focal sample of 17 code adopting companies, (c) interviews with 33 managers in the focal companies examining the adoption and impact of the codes, and (d) content analysis of 41 company codes of conduct, including those of most focal companies, plus the ICAC model code.While a mixture of prudential and altruistic reasons were given for code adoption, content analysis suggested that the prime motive was corporate self-defence. The prevailing themes were bribery, conflict of interest, insider information, gambling, moonlighting, accuracy of records and misuse of corporate assets. Wider social responsibility tended to be neglected. Companies appeared to have imposed their codes top-down, emphasising disciplinary procedures rather than ethics training, and appointing neither ethics counsellors nor ombuds-people. The longitudinal study over a seven month period suggested that while moral ethos may have declined, overall standards of perceived conduct had not changed.     

A Code of Ethics for Social Marketing? Bridging Procedural Ethics and Ethics-in-Practice

We consider the role of codes of ethics in social marketing, distinguishing between “procedural ethics” and “ethics-in-practice” (after Guillemin & Gillam, 2004). We review foundations for “procedural ethics”—formal systems for ethical oversight—including moral and political philosophy, existing codes of ethics, and previous proposals for codes of ethics for social marketing. We then discuss “ethics-in-practice,” the ethical dimensions of the small moments that comprise everyday life. We connect this idea to Aristotle’s concept of phronesis, the practical wisdom to respond in just the right way to particular situations. Supporting the ethical practice of social marketing will require both procedural ethics and ethics-in-practice, iteratively related to one another. We conclude with three tasks for the profession: (1) develop and apply norms, standards, and sanctions; (2) develop formal, procedural ethics, in a just way (e.g., codes of ethics); and (3) support social marketers to develop ethics-in-practice, or phronesis.     

Implementation, communication and benefits of corporate codes of ethics: an international and longitudinal approach for Australia, Canada and Sweden

This paper examines the implementation, communication and benefits of corporate codes of ethics by the top companies operating in Australia, Canada and Sweden. It provides an international comparison across three continents. It is also based on a longitudinal approach where three national surveys were performed in 2001–2002 and replications of the same surveys were performed in 2005–2006. The empirical findings of this research show in all three countries that large organisations indicate a substantial interest in corporate codes of ethics. There are, however, differences in the ways that the companies in each country implement and communicate their corporate codes of ethics and the benefits that they see being derived from them. The longitudinal comparison between 2001–2002 and 2005–2006 indicates changes in the implementation, communication and benefits of corporate codes of ethics in the three countries.     

Cognitive Theory and Moral Behavior: The Contribution of F. A. Hayek to Business Ethics

This paper shows how business ethics as a concept may be approached from a cognitive viewpoint. Following F. A. Hayek's cognitive theory, I argue that moral behavior evolves and changes because of individual perception and action. Individual moral behavior becomes a moral rule when prominently displayed by members of a certain society in a specific situation. A set of moral rules eventually forms the ethical code of a society, of which business ethics codes are only a part. By focusing on the concept of "limited" or "dispersed knowledge" that underlies the cognitive approach, I show that universal ethical norms that should lead to defined outcomes cannot exist. This approach moreover shows the limits of deliberate rule-setting. Attempts to deliberately impose universal ethical rules on societies may turn out to be harmful for societal development and lead to an abuse of governmental power.     

An Inquiry into the Study of Corporate Codes of Ethics

This paper takes its point of departure in an article by Stevens [Stevens, B.: 1994, Journal of Business Ethics 54, 163–171], in which she identified a lack of knowledge regarding how corporate codes of ethics are communicated and affect behavior in organizations. Taking heed of this suggested gap, we review studies on corporate codes of ethics with an empirical content, published since 1994. The conclusion of the review is that we still lack knowledge on how codes work, how they are communicated and how they are transformed inside organizations. Stevens’ plea could even be extended, arguing that the knowledge gap might be of even more significance than in the mid-1990s. Some directions for how this situation can be approached in future studies are outlined in the paper.     

The movement for reforming American business ethics: A twenty-year perspective

This paper presents a succinct review of the movement for moral genesis in business that arose in the 1970s. The moral genesis movement is characterized by: (a) the rejection of the premise that business and ethics are antagonistic; (b) the rise of the Issues Management approach, which stresses the social responsibility of the corporation: (c) disdain of government regulation as a means of business moralization, and (d) a search for control measures aimed at improving organization moral behavior. This movement now begins to give rise to a new organizational model, the Self-Moralizing Corporation, which transcends existing paradigms of corporate rectitude. The tenets of the Self-Moralizing Corporation are that: (a) the moral behavior of members is a requisite to the attainment of organization goals; (b) individual moral behavior is an asset which must be managed and developed by the corporation; (c) individual moral development is a collectively and individually shared responsibility; and, (d) the maintenance of moral values is more important than the preservation of organization structure.Simcha B. Werner has published in Israeli, British and American professional journals in the areas of government ethics, administrative reform and public enterprise.     

Exploring the intellectual structure of research in codes of ethics: A bibliometric analysis

In this study, we map the intellectual structure of the code of ethics research field by means of a co-citation bibliometric analysis. To date, this type of analysis is absent from the literature on codes of ethics. Previous literature reviews have clarified definitions, studied contents, and analyzed the effectiveness of codes of ethics. However, the qualitative nature of these reviews does not resolve fundamental issues for understanding the evolution and status of this research field. This study contributes to the field by providing a bibliometric review in which the main research areas, sources of knowledge, trends, interrelationships, and dissemination paths of the domain are shown. Our findings reveal four main lines of research in the field of codes of ethics: corporate agent behavior with respect to codes of ethics, content analysis, effectiveness of codes of ethics, and employees’ attitudes toward codes of ethics. We also show that the study of the contents of codes of ethics is the main connecting bridge in this area of knowledge. Finally, we identify upcoming research topics in the field such as cultural change, the defensive nature of codes of ethics, and the application of organizational theories to code analysis.     

The Influence of Corporate Culture on Managerial Ethical Judgments

The contention that organizational culture influences ethical decision making is not disputable. However, the extent to which it influences ethical decision making in the workplace is a topic for scholarly debate and investigation. There are scholars who argue that, though corporate values are a powerful force in explaining the behavior of individuals and groups within organizations, these values are unperceived, unspoken, and taken for granted. However, there are others who argue that the formalization of corporate values facilitates job and role clarity and is the key to influencing employee behavior. The purpose of this study is to examine the extent of the influence of organizational codes of ethics. The findings suggest that, depending upon the particular situation, corporate culture and ethics may mitigate individual personal moral convictions about right and wrong.     

Individual, Social and Organizational Sources of Sharing and Variation in the Ethical Reasoning of Managers

A growth in consumer and media ethical consciousness has resulted in the need for organizations to ensure that members understand, share and project an approved and unified set of ethics. Thus understanding which variables are related to sharing and variation of ethical reasoning and moral intent, and the relative strength of these variables is critical. While past research has examined individual (attitudes, values, etc.), social (peers, significant others, etc.) and organizational (codes of conduct, senior management, etc.) variables, it has focused on their influence on the individual – and not on their role in relation to patterns of group sharing and variation in an organization. Introduced as a new methodology to study ethics, microcultural analysis stipulates that to explain patterns of sharing and variation, one must understand how individual, social and organizational variables influence sharing and variation. Key hypotheses predict that managers who share in individual, social or organizational determinants will be more likely to share in ethical reasoning and moral intent. Qualitative and quantitative research supports the key hypotheses, finding social ties, personal moral intensity, Machiavellianism, locus of control and codes of ethics as significant determinants. Individuals who share in these determinants are more likely to share in ethical reasoning and moral intent. Additionally, regression analysis reveals social ties and personal moral intensity to be the strongest determinants. Based on these results, managerial recommendations focus on a holistic approach, manipulating these three determinants to cultivate a unified code of ethics within an organization.     

The Nature of the Relationship between Corporate Codes of Ethics and Behaviour

A study was conducted in order to examine the relationship between corporate codes of ethics and behaviour. Fifty-seven interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The study found that codes of ethics are a potential factor influencing the behaviour of corporate agents. Reasons are provided why codes are violated as well as complied with. A set of eight metaphors are developed which help to explain how codes of ethics influence behaviour.     

Ethical judgments and intentions: a multinational study of marketing professionals

A multinational study of marketing professionals was conducted in the US, England, Spain and Turkey. Respondents from these countries were compared on various ethics-related constructs such as idealism, relativism, moral intensity and corporate ethical values. Analyses of variance indicated that moral intensity had a signi ?cant impact on both ethical judgments and behavioral intentions. However, corporate ethical values, an idealistic ethical perspective and a relativistic ethical perspective only partially impacted ethical judgments and intentions. Country differences showed that the US was highest in terms of corporate ethical values while being the lowest in terms of relativism and signi?cantly lower than Spain and Turkey in terms of idealism. Turkey was the highest in terms of both idealism and relativism yet lowest in terms of corporate ethical values. Country differences in terms of moral intensity tended to be situation-speci?c. One managerial implication, for ?rms in all four countries, is that a clear set of corporate policies concerning ethics can positively in?uence the behavioral intentions of employees. It is important that employees do not misinterpret the desires of top management where ethical issues are involved.     

The Language of Business Codes of Ethics: Implications of Knowledge and Power

In Australia as is the case elsewhere, ethics is a developing aspect of business behaviour. Many educational institutions and business enterprises have a strong interest in the subject, particularly from the practical viewpoint of creating an ethical culture in business that has substantial practical effects. In this paper, the codes of ethics of five large enterprises are examined. They were selected as being typical of a collection of corporate codes used in Australia held by the Ethics Research Group at the University of Technology, Sydney. Two codes were from international companies: a chemical manufacturing company and a health, beauty and medical manufacturer. The other codes were from an Australian bank, an Australian federal government business agency, and an Australian mining company.Corporate codes of ethics rarely contain operational definitions to direct their addressees on situations of moral hazard and the required response, to achieve a particular desired ethical corporate culture. Consequently, addressees constitute the locus of ethical decision making in enterprises. By contrast, the language used in the corporate codes examined construct an authoritarian position in the writer/reader relationship from the overuse of grammatical structures such as relational clauses, the passive, nominalisation, grammatical metaphor and modality. Collectively, these structures communicate a strong sense of obligation and even powerlessness since a strong authoritarian tone is established which does not give the addressees the possibility of discretionary decision making.The authors acknowledge that these five grammatical structures have a place in corporate codes since they form part of the legitimate linguistic fabric of our language. Rather attention is drawn to this overuse to assist corporate code authors to avoid writing codes that have subtle unintended and contradictory messages.     

Determinants of the Effectiveness of Corporate Codes of Ethics: An Empirical Study

Recent figures reported by KPMG confirm the growing prevalence of corporate codes of ethics globally. Svensson et al. (Bus Ethics 18:389–407, 2009) in surveys of the largest corporations in Australia, Canada, and Sweden found a similar trend. The increased prevalence of corporate codes of ethics has been accompanied by heightened research interest in various aspects of these documents, e.g., the contents and focus of the codes. However, there is a paucity of research examining the effectiveness of these documents and the organizational infrastructure that accompany them. This study, based on a survey of Canada’s largest corporations, sought to empirically assess the determinants of the effectiveness of corporate codes of ethics by regressing managers’ perceptions of code effectiveness against various elements of ethics programs. It was found that, in a statistically significant model, eighteen independent variables explain 58.5% of the variance in the perceived effectiveness of corporate codes of ethics.