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A company code of conduct is a set of rules which is commonly written for employees of a company, which protects the business and informs the employees of the company's expectations. It is appropriate for even the smallest of companies to create a document containing important information on expectations for employees.<ref>{{cite web |title=Building a compliance department |url=https://legal.thomsonreuters.com/en/insights/articles/building-a-compliance-department |website=Thomson Reuters |access-date=20 January 2022}}</ref> The document does not need to be complex or have elaborate policies.
A company code of conduct is a set of rules which is commonly written for employees of a company, which protects the business and informs the employees of the company's expectations. It is appropriate for even the smallest of companies to create a document containing important information on expectations for employees.<ref>{{cite web |title=Building a compliance department |url=https://legal.thomsonreuters.com/en/insights/articles/building-a-compliance-department |website=Thomson Reuters |access-date=20 January 2022}}</ref> The document does not need to be complex or have elaborate policies.


Failure of an employee to follow a company's code of conduct can have negative consequences. In ''[[Chip Skowron|Morgan Stanley v. Skowron]]'', 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's [[faithless servant]] doctrine, the court held that a hedge fund's employee engaging in insider trading in violation of his company's code of conduct, which also required him to report his [[misconduct]], must repay his employer the full $31 million his employer paid him as compensation during his period of faithlessness.<ref name="auto6">{{Cite book|url=https://books.google.com/books?id=3RaGDwAAQBAJ&q=%22faithless+servant%22&pg=PA472|title=Employment Law: Private Ordering and Its Limitations|first1=Timothy P.|last1=Glynn|first2=Rachel S.|last2=Arnow-Richman|first3=Charles A.|last3=Sullivan|date= 2019|publisher=Wolters Kluwer Law & Business|isbn=978-1543801064|via=Google Books}}</ref><ref name="auto4">{{cite web|url=https://www.ibtimes.co.uk/faithless-ex-morgan-stanley-fund-manager-ordered-repay-31m-former-employer-1429819|author=Jerin Matthew|title='Faithless' Ex-Morgan Stanley Fund Manager Ordered to Repay $31m to Former Employer|date=December 20, 2013|website=International Business Times UK}}</ref><ref>{{cite web|url=https://dealbook.nytimes.com/2013/12/23/the-huge-costs-of-being-a-faithless-servant/|title=The Huge Costs of Being a 'Faithless Servant'|first=Peter J.|last=Henning|date=December 23, 2013|website=New York Times DealBook}}</ref><ref>{{cite web|url=https://www.greenwichtime.com/news/article/Morgan-Stanley-seeks-10-2-million-from-convicted-4193127.php|title=Morgan Stanley seeks $10.2 million from convicted former trader|date=January 15, 2013|work=GreenwichTime}}</ref>
Failure of an employee to follow a company's code of conduct can have negative consequences. In ''[[Chip Skowron|Morgan Stanley v. Skowron]]'', 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's [[faithless servant]] doctrine, the court held that a hedge fund's employee engaging in insider trading in violation of his company's code of conduct, which also required him to report his [[misconduct]], must repay his employer the full $31 million his employer paid him as compensation during his period of faithlessness.<ref name="auto6">{{Cite book|url=https://books.google.com/books?id=3RaGDwAAQBAJ&q=%22faithless+servant%22&pg=PA472|title=Employment Law: Private Ordering and Its Limitations|first1=Timothy P.|last1=Glynn|first2=Rachel S.|last2=Arnow-Richman|first3=Charles A.|last3=Sullivan|date= 2019|publisher=Wolters Kluwer Law & Business|isbn=978-1543801064|via=Google Books}}</ref><ref name="auto4">{{cite web|url=https://www.ibtimes.co.uk/faithless-ex-morgan-stanley-fund-manager-ordered-repay-31m-former-employer-1429819|author=Jerin Matthew|title='Faithless' Ex-Morgan Stanley Fund Manager Ordered to Repay $31m to Former Employer|date=December 20, 2013|website=International Business Times UK}}</ref><ref>{{cite web|url=https://dealbook.nytimes.com/2013/12/23/the-huge-costs-of-being-a-faithless-servant/|title=The Huge Costs of Being a 'Faithless Servant'|first=Peter J.|last=Henning|date=December 23, 2013|website=New York Times DealBook}}</ref><ref>{{cite web|url=https://www.greenwichtime.com/news/article/Morgan-Stanley-seeks-10-2-million-from-convicted-4193127.php|title=Morgan Stanley seeks $10.2 million from convicted former trader|date=January 15, 2013|work=GreenwichTime}}</ref>


===Accountants' code of conduct===
===Accountants' code of conduct===
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==Codes of conduct in practice==
==Codes of conduct in practice==
A code of conduct can be an important part in establishing an [[Social inclusion|inclusive culture]], but it is not a comprehensive solution on its own. An [[ethical]] culture is created by the organization's leaders who manifest their ethics in their attitudes and behaviour.<ref>{{cite web|last1=McMillan|first1=Michael|title=Codes of Ethics: If You Adopt One, Will They Behave?|url=https://blogs.cfainstitute.org/investor/2012/02/20/codes-of-ethics-if-you-adopt-one-will-they-behave/|website=Enterprising Investor: Practical analysis for investment professionals|access-date=10 February 2016|date=2012-02-20}}</ref> Studies of codes of conduct in the private sector show that their effective implementation must be part of a learning process that requires training, consistent enforcement, and continuous measurement/improvement:<ref>{{cite journal|last1=Doig|first1=Alan|last2=Wilson|first2=John|title=Business Ethics: A European Review Volume 7, Issue 3, July 1998|journal=Business Ethics: A European Review|volume=7|issue=3|pages=140–149|doi=10.1111/1467-8608.00100|year=1998}}</ref> simply requiring members to read the code is not enough to ensure that they understand it and will remember its contents.<ref>{{cite web|last1=ACC|title=Top Ten Tips for Developing an Effective Code of Conduct|url=http://www.acc.com/legalresources/publications/topten/codeofconduct.cfm|website=Association of Corporate Counsel|access-date=10 February 2016|archive-url=https://web.archive.org/web/20180907183010/https://www.acc.com/legalresources/publications/topten/codeofconduct.cfm|archive-date=7 September 2018|url-status=dead}}</ref> Castellano ''et al.'' describe [[Thomas V. Morris|Tom Morris]]' book ''If Aristotle Ran General Motors'' as "compelling" and "persuasive" in arguing that in addition to codes of conduct and ethical guidelines, the creation of an ethical workplace climate requires "socially harmonious relationships" to be embedded in practice.<ref>Castellano, J. F., Rosenzweig, K. and Roehm, H. A., [https://ecommons.udayton.edu/cgi/viewcontent.cgi?article=1002&context=acc_fac_pub How Corporate Culture Impacts Unethical Distortion of Financial Numbers], ''Management Accounting Quarterly'', Summer 2004, accessed 7 January 2023</ref> The proof of effectiveness is when employees/members feel comfortable enough to voice concerns and believe that the organization will respond with appropriate action.<ref>{{cite web|last1=Barman|first1=Tanya|last2=White|first2=Samantha|title=Implementing an effective corporate ethics policy|url=http://www.cgma.org/magazine/issues/2014/jun/20149701.html|website=Chartered Global Management Accountant (CGMA) Magazine|access-date=10 February 2016|date=June 2014}}</ref>
A code of conduct can be an important part in establishing an [[Social inclusion|inclusive culture]], but it is not a comprehensive solution on its own. An [[ethical]] culture is created by the organization's leaders who manifest their ethics in their attitudes and behaviour.<ref>{{cite web|last1=McMillan|first1=Michael|title=Codes of Ethics: If You Adopt One, Will They Behave?|url=https://blogs.cfainstitute.org/investor/2012/02/20/codes-of-ethics-if-you-adopt-one-will-they-behave/|website=Enterprising Investor: Practical analysis for investment professionals|access-date=10 February 2016|date=2012-02-20}}</ref> Studies of codes of conduct in the private sector show that their effective implementation must be part of a learning process that requires training, consistent enforcement, and continuous measurement/improvement:<ref>{{cite journal|last1=Doig|first1=Alan|last2=Wilson|first2=John|title=Business Ethics: A European Review Volume 7, Issue 3, July 1998|journal=Business Ethics: A European Review|volume=7|issue=3|pages=140–149|doi=10.1111/1467-8608.00100|year=1998}}</ref> simply requiring members to read the code is not enough to ensure that they understand it and will remember its contents.<ref>{{cite web|last1=ACC|title=Top Ten Tips for Developing an Effective Code of Conduct|url=http://www.acc.com/legalresources/publications/topten/codeofconduct.cfm|website=Association of Corporate Counsel|access-date=10 February 2016|archive-url=https://web.archive.org/web/20180907183010/https://www.acc.com/legalresources/publications/topten/codeofconduct.cfm|archive-date=7 September 2018|url-status=dead}}</ref> Castellano ''et al.'' describe [[Thomas V. Morris|Tom Morris]]' book ''If Aristotle Ran General Motors'' as "compelling" and "persuasive" in arguing that in addition to codes of conduct and ethical guidelines, the creation of an ethical workplace climate requires "socially harmonious relationships" to be embedded in practice.<ref>Castellano, J. F., Rosenzweig, K. and Roehm, H. A., [https://ecommons.udayton.edu/cgi/viewcontent.cgi?article=1002&context=acc_fac_pub How Corporate Culture Impacts Unethical Distortion of Financial Numbers], ''Management Accounting Quarterly'', Summer 2004, accessed 7 January 2023</ref> The proof of effectiveness is when employees/members feel comfortable enough to voice concerns and believe that the organization will respond with appropriate action.<ref>{{cite web|last1=Barman|first1=Tanya|last2=White|first2=Samantha|title=Implementing an effective corporate ethics policy|url=http://www.cgma.org/magazine/issues/2014/jun/20149701.html|website=Chartered Global Management Accountant (CGMA) Magazine|access-date=10 February 2016|date=June 2014}}</ref>


== Examples ==
== Examples ==

Revision as of 21:20, 8 May 2023

Not to be confused with Coda Conduct.
"Codes of Conduct" redirects here. For the unproduced HBO pilot, see Steve McQueen (director).

A code of conduct is a set of rules outlining the norms, rules, and responsibilities or proper practices of an individual party or an organization.

Companies' codes of conduct

A company code of conduct is a set of rules which is commonly written for employees of a company, which protects the business and informs the employees of the company's expectations. It is appropriate for even the smallest of companies to create a document containing important information on expectations for employees.[1] The document does not need to be complex or have elaborate policies.

Failure of an employee to follow a company's code of conduct can have negative consequences. In Morgan Stanley v. Skowron, 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's faithless servant doctrine, the court held that a hedge fund's employee engaging in insider trading in violation of his company's code of conduct, which also required him to report his misconduct, must repay his employer the full $31 million his employer paid him as compensation during his period of faithlessness.[2][3][4][5]

Accountants' code of conduct

In its 2007 International Good Practice Guidance, "Defining and Developing an Effective Code of Conduct for Organizations", provided the following working definition: "Principles, values, standards, or rules of behaviour that guide the decisions, procedures, and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations."

Codes of conduct in practice

A code of conduct can be an important part in establishing an inclusive culture, but it is not a comprehensive solution on its own. An ethical culture is created by the organization's leaders who manifest their ethics in their attitudes and behaviour.[6] Studies of codes of conduct in the private sector show that their effective implementation must be part of a learning process that requires training, consistent enforcement, and continuous measurement/improvement:[7] simply requiring members to read the code is not enough to ensure that they understand it and will remember its contents.[8] Castellano et al. describe Tom Morris' book If Aristotle Ran General Motors as "compelling" and "persuasive" in arguing that in addition to codes of conduct and ethical guidelines, the creation of an ethical workplace climate requires "socially harmonious relationships" to be embedded in practice.[9] The proof of effectiveness is when employees/members feel comfortable enough to voice concerns and believe that the organization will respond with appropriate action.[10]

Examples

See also

References

  1. ^ "Building a compliance department". Thomson Reuters. Retrieved 20 January 2022.
  2. ^ Glynn, Timothy P.; Arnow-Richman, Rachel S.; Sullivan, Charles A. (2019). Employment Law: Private Ordering and Its Limitations. Wolters Kluwer Law & Business. ISBN 978-1543801064 – via Google Books.
  3. ^ Jerin Matthew (December 20, 2013). "'Faithless' Ex-Morgan Stanley Fund Manager Ordered to Repay $31m to Former Employer". International Business Times UK.
  4. ^ Henning, Peter J. (December 23, 2013). "The Huge Costs of Being a 'Faithless Servant'". New York Times DealBook.
  5. ^ "Morgan Stanley seeks $10.2 million from convicted former trader". GreenwichTime. January 15, 2013.
  6. ^ McMillan, Michael (2012-02-20). "Codes of Ethics: If You Adopt One, Will They Behave?". Enterprising Investor: Practical analysis for investment professionals. Retrieved 10 February 2016.
  7. ^ Doig, Alan; Wilson, John (1998). "Business Ethics: A European Review Volume 7, Issue 3, July 1998". Business Ethics: A European Review. 7 (3): 140–149. doi:10.1111/1467-8608.00100.
  8. ^ ACC. "Top Ten Tips for Developing an Effective Code of Conduct". Association of Corporate Counsel. Archived from the original on 7 September 2018. Retrieved 10 February 2016.
  9. ^ Castellano, J. F., Rosenzweig, K. and Roehm, H. A., How Corporate Culture Impacts Unethical Distortion of Financial Numbers, Management Accounting Quarterly, Summer 2004, accessed 7 January 2023
  10. ^ Barman, Tanya; White, Samantha (June 2014). "Implementing an effective corporate ethics policy". Chartered Global Management Accountant (CGMA) Magazine. Retrieved 10 February 2016.
  11. ^ Bank codes of conduct https://theconversation.com/bank-codes-of-conduct-add-bars-to-the-window-dressing-and-make-them-legally-binding-105391

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