When faced with an ambiguous ethical situation related to computer technology (CT), the individual's course of action is influenced by personal experiences and opinions, consideration of what co-workers would do in the same situation, and an expectation of what the organization might sanction. In this article, the judgement of over three-hundred Association of Information Technology Professionals (AITP) members concerning the actions taken in a series of CT ethical scenarios are examined. Respondents expressed their personal judgement, as well as their perception (...) of their co-workers' judgement, and their understanding of the organization's judgement of the actions described in the scenarios. The findings show that there are differences in respondents' judgements for self, co-workers, and organization. Definitive patterns were also found between groups with and without organizational codes related to CT. (shrink)

How common are corporate codes of ethics in the UK and especially among Britain's most admired companies? The author is Wicklander Professor of Professional Ethics at DePaul University, Chicago, and current President of the American Society for Business Ethics.

This article introduces and discusses the initial results of a survey focused on the contents, role and effectiveness of company codes of ethics. The article examines the contents of the codes of ethics of companies operating in the private sector in Italy, quoted on the Italian Stock Exchange (Standard& Poor/Mib-Milano Indice Borsa). The purpose of this investigation was to identify any correlations between sector characteristics and the contents of the codes of ethics, which would enable us (...) to map out the main principles followed in writing the companies' codes of ethics. The analysis was conducted in order to ascertain whether there were common factors deriving from the shared ethical questions faced by the companies operating in the same sector of activity. As the first step, the 40 companies were subdivided into three main economic categories -Industrial, Financial and Service. Then the contents of each code of ethics were evaluated and classified in accordance with different criteria. The main categories of classification were based on -general principles, social values, rules of conduct, relationships with third parties, implementation and sanctions. The next objective was to investigate whether these characteristics were due to the regulation of the sector of reference, the existence of sector benchmarks for best practice, or simply companies' voluntary stance on ethical issues. The main conclusions were that the codes of ethics of the Italian companies that we analysed do not seem to show relevant differences traceable to sector of activity, and their adoption is affected by several reasons other than intentionally ethical considerations. (shrink)

This paper reports on an investigation of issues surrounding the use of ethical codes/codes of conduct in Irish based companies. Using a comprehensive questionnaire survey, the paper examines the incidence, content and enforcement of codes of conduct among a sample of the top 1000 companies based in Ireland. The main findings indicate that the overall usage of codes of conduct amongst indigenous Irish companies has increased significantly from 1995 to 2000. However, in line with prior research, (...) these codes focus primarily on issues surrounding company and employee protection as opposed to society protection. Almost half of all codes are written by company personnel or provided by head office. Revisions of codes are common but formal ongoing methods of instructing new staff about codes are not prevalent. Less than one-third of companies with codes have formal channels for reporting violations but a high percentage have formal disciplinary procedures in place for breaches of codes. (shrink)

How common are corporate codes of ethics in the UK and especially among Britain's most admired companies? The author is Wicklander Professor of Professional Ethics at DePaul University, Chicago, and current President of the American Society for Business Ethics.

The rapid and dynamic nature of digital transformation challenges companies that wish to develop and deploy novel digital technologies. Like other actors faced with this transformation, companies need to find robust ways to ethically guide their innovations and business decisions. Digital ethics has recently featured in a plethora of both practical corporate guidelines and compilations of high-level principles, but there remains a gap concerning the development of sound ethical guidance in specific business contexts. As a multinational science and technology (...) class='Hi'>company faced with a broad range of digital ventures and associated ethical challenges, Merck KGaA has laid the foundations for bridging this gap by developing a Code of Digital Ethics (CoDE) tailored for this context. Following a comprehensive analysis of existing digital ethics guidelines, we used a reconstructive social research approach to identify 20 relevant principles and derive a code designed as a multi-purpose tool. Versatility was prioritised by defining non-prescriptive guidelines that are open to different perspectives and thus well-suited for operationalisation for varied business purposes. We also chose a clear nested structure that highlights the relationships between five core and fifteen subsidiary principles as well as the different levels of reference—data and algorithmic systems—to which they apply. The CoDE will serve Merck KGaA and its new Digital Ethics Advisory Panel to guide ethical reflection, evaluation and decision-making across the full spectrum of digital developments encountered and undertaken by the company whilst also offering an opportunity to increase transparency for external partners, and thus trust. (shrink)

Though written corporate codes of ethics have been touted as a panacea for the embarrassments and uncertainties of the past two decades, the absence of clear evaluation procedures severely compromises their usefulness. An ethnographic study comparing development processes and compliance outcomes in large health care facilities and energy companies shows that neither of the two industries has encountered much success with a codes of ethics program. Companies that distribute copies of their code of ethics seldom ensure the process (...) is completed or that employees understand the purpose of the document, and staff responsible for the code give it a low priority relative to their overall responsibilities. Contrary to expectations, health care facilities are no more likely to develop or implement codes of ethics effectively than are energy companies. More extensive research is needed in order to generate the data necessary for the development of realistic standards for the evaluation of codes of ethics. (shrink)

This paper focuses on the significance of codes of conduct (CoCs) in the internal work context of two retail companies. A stepwise approach is used. First, the paper identifies in what way employees use and refer to CoCs internally. Second, the function and relevance of CoCs inside the two companies are identified. Third, the paper explains why CoCs tend to function in the identified ways. In both cases, the CoCs are clearly decoupled in the sense that they do not (...) concern the immediate work context of the employees. Counter-intuitively, this facilitates the process of establishing the CoCs. Even though the CoCs are not directly relevant for the employees, they are accepted and embraced with regard to contents, focus and function. Above all, the CoCs seem to confirm and even strengthen employee identity. On the basis of these observations, it is suggested that CoCs should not only be valued in light of their direct organisational consequences or lack of such consequences. The issue is not just whether CoCs are decoupled or not. Rather, it is argued that researchers should consider more closely a two-level analysis that takes into account not only the concrete application of CoCs but also their function and meaning. An implication of this is that what might appear as a decoupled code cannot be dismissed as irrelevant to the ‘core’ business processes of the organisation. (shrink)

Can differences in corporate codes of ethics arise from the specific situation of transformation in Slovakia in contrast to the stable context of the firms in Western Germany? This paper compares codes of ethics of large‐scale enterprises in both countries in terms of ethical issues addressed. It demonstrates that codes of ethics of the Slovak companies mirror the specific transformational circumstances in the country. Compared with Western Germany the codes of these firms include multiple ethical issues, (...) meaning that they experience a broader range of relevant ethical problems. Furthermore, their codes are internally oriented, in terms of the ethical issues raised most often; they put more emphasis on committing employees, managers and shareholders/owners to the firm. Based on the differences discovered, it is proposed that negative experiences within the past process of transformation and in part the socialist heritage are the main reasons for differences between the two samples. (shrink)

This paper focuses on the significance of codes of conduct (CoCs) in the internal work context of two retail companies. A stepwise approach is used. First, the paper identifies in what way employees use and refer to CoCs internally. Second, the function and relevance of CoCs inside the two companies are identified. Third, the paper explains why CoCs tend to function in the identified ways. In both cases, the CoCs are clearly decoupled in the sense that they do not (...) concern the immediate work context of the employees. Counter‐intuitively, this facilitates the process of establishing the CoCs. Even though the CoCs are not directly relevant for the employees, they are accepted and embraced with regard to contents, focus and function. Above all, the CoCs seem to confirm and even strengthen employee identity. On the basis of these observations, it is suggested that CoCs should not only be valued in light of their direct organisational consequences or lack of such consequences. The issue is not just whether CoCs are decoupled or not. Rather, it is argued that researchers should consider more closely a two‐level analysis that takes into account not only the concrete application of CoCs but also their function and meaning. An implication of this is that what might appear as a decoupled code cannot be dismissed as irrelevant to the ‘core’ business processes of the organisation. (shrink)

Can differences in corporate codes of ethics arise from the specific situation of transformation in Slovakia in contrast to the stable context of the firms in Western Germany? This paper compares codes of ethics of large‐scale enterprises in both countries in terms of ethical issues addressed. It demonstrates that codes of ethics of the Slovak companies mirror the specific transformational circumstances in the country. Compared with Western Germany the codes of these firms include multiple ethical issues, (...) meaning that they experience a broader range of relevant ethical problems. Furthermore, their codes are internally oriented, in terms of the ethical issues raised most often; they put more emphasis on committing employees, managers and shareholders/owners to the firm. Based on the differences discovered, it is proposed that negative experiences within the past process of transformation and in part the socialist heritage are the main reasons for differences between the two samples. (shrink)

Over the last 20+ years, multinational corporations have been confronted with accusations of abuse of market power and unfair and unethical business conduct especially as it relates to their overseas operations and supply chain management. These accusations include, among others, worker exploitation in terms of unfairly low wages, excessive work hours, and unsafe work environment; pollution and contamination of air, ground water and land resources; and, undermining the ability of natural government to protect the well-being of their citizens. MNCs have (...) responded to these accusations by creating voluntary codes of conduct which commit them to specific standards for addressing these issues. These codes are created at both the industry-wide and the individual company level. Unfortunately, these codes have generated little credibility and public trust because their compliance claims cannot be independently verified, and they lack transparency and full public disclosure. In this article, we present a case study of the voluntary code of conduct by Mattel, Inc., the world’s largest toy company. The code, called the Global Manufacturing Principles, confronts the general criticism leveled against voluntary codes of conduct by creating detailed standards of compliance, independent external monitoring of the company’s compliance with its code of conduct, and making full, and uncensored public disclosure of the audit findings and company’s response in terms of remedial action. We present a detailed account of how Mattel’s voluntary code of conduct was created, implemented, and ultimately abandoned over 9 years. We provide an evaluative analysis of the company’s GMP compliance throughout its life span, which suggests a bell-shaped curve, where early top management commitments were met with pockets of resistance from operational groups, who were concerned about balancing GMP compliance efforts with traditional performance criteria. The early stage response from Mattel’s top management was quick and supported with the requisite resources. As a result, the compliance process accelerated, becoming increasingly more robust and effective. The success of code compliance and increased transparency in public disclosure energized field managers with a sense of professional satisfaction and publicly recognized accomplishments. The decline in GMP compliance was equally steep. When all the easily attainable targets had been reached at the company-operated plants, addressing vendor plants’ compliance presented a new set of challenges, which taxed corporate resources and management commitment. It would seem that value-based and ethics-oriented considerations, i.e., doing the right thing for the right reason, were no longer the driving force for Mattel’s management. Mattel did not see any economic benefit from its proactive stance, when competitors did not seem to suffer adverse consequences for not following suit. The final contributing factor to the code’s abandonment was a widely publicized series of product recalls which absorbed top management’s attention. (shrink)

In this article, our aim is to examine the difference between the corporate social responsibility (CSR) practice of the multinational companies (MNCs) and of the domestic companies operating in Serbia, as well as the influence of internal self-regulations such as statements of corporate values and codes of conduct, and external self-regulations such as the implementation of the ISO 9001 and ISO 14001 standards on CSR practice. The CSR practice is observed in five CSR areas: employee relations, customer relations, environmental (...) practice, community and social involvement, and transparency in business activity. The findings indicate that the CSR practice of the MNCs is significantly different in comparison to domestic companies only in the area of employee relations. Furthermore, the overall results suggest that internal self-regulations have more influence on CSR practice than the implementation of generic management system standards. However, the existence of transparent corporate values, codes of conduct and implemented management systems according to ISO 9001 and ISO 14001 standards does not prove to be strong predictors of CSR performance. (shrink)

This study investigated effects of codes of ethics on perceptions of ethical behavior. Respondents from companies with codes of ethics (n = 465) rated role set members (top management, supervisors, peers, subordinates, self) as more ethical and felt more encouraged and supported for ethical behavior than respondents from companies without codes (n = 301). Key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of ethical problems (...) were impacted by the presence of an ethics code. The mere presence of a code of ethics appears to have a positive impact on perceptions of ethical behavior in organizations, even when respondents cannot recall specific content of the code. (shrink)

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). (shrink)

Bottom lines and codes provide a corporation with guidelines for dealing with the inside and outside world. Bottom lines have the oldest papers through Frederic Taylor's Scientific Management, dated beginning 20th century. Codes came into existence in its midst with the emerging sustainability agenda, referring both to technical detail and human judgement. Corporate codes present themselves as a policy document with collective rules handed down by way of a top-down approach. Since an effective code is dependent on (...) the motivation of individual employees, this article proposes the additional view of a bottom-up approach. By sharing values in concrete work employees become co-owners of the code. Top-down and bottom-up approaches thus emerge in a complementary relationship. A relevant organisational context would be a parallel structure of action and reflection, thus facilitating balanced thinking in the sustainability domain and contributing to an 'ethical calibre' or 'moral standard' of a corporation. (shrink)

Over the last 20+ years, multinational corporations (MNCs) have been confronted with accusations of abuse of market power and unfair and unethical business conduct especially as it relates to their overseas operations and supply chain management. These accusations include, among others, worker exploitation in terms of unfairly low wages, excessive work hours, and unsafe work environment; pollution and contamination of air, ground water and land resources; and, undermining the ability of natural government to protect the well-being of their citizens. MNCs (...) have responded to these accusations by creating voluntary codes of conduct which commit them to specific standards for addressing these issues. These codes are created at both the industry-wide and the individual company level. Unfortunately, these codes have generated little credibility and public trust because their compliance claims cannot be independently verified, and they lack transparency and full public disclosure. In this article, we present a case study of the voluntary code of conduct by Mattel, Inc., the world's largest toy company. The code, called the Global Manufacturing Principles (GMP), confronts the general criticism leveled against voluntary codes of conduct by (a) creating detailed standards of compliance, (b) independent external monitoring of the company's compliance with its code of conduct, and (c) making full, and uncensored public disclosure of the audit findings and company's response in terms of remedial action. We present a detailed account of how Mattel's voluntary code of conduct was created, implemented, and ultimately abandoned over 9 years. We provide an evaluative analysis of the company's GMP compliance throughout its life span, which suggests a bellshaped curve, where early top management commitments were met with pockets of resistance from operational groups, who were concerned about balancing GMP compliance efforts with traditional performance criteria. The early stage response from Mattel's top management was quick and supported with the requisite resources. As a result, the compliance process accelerated, becoming increasingly more robust and effective. The success of code compliance and increased transparency in public disclosure energized field managers with a sense of professional satisfaction and publicly recognized accomplishments.The decline in GMP compliance was equally steep. When all the easily attainable targets had been reached at the company-operated plants, addressing vendor plants' compliance presented a new set of challenges, which taxed corporate resources and management commitment. It would seem that value-based and ethicsoriented considerations, i. e., doing the right thing for the right reason, were no longer the driving force for Mattel's management. Mattel did not see any economic benefit from its proactive stance, when competitors did not seem to suffer adverse consequences for not following suit. The final contributing factor to the code's abandonment was a widely publicized series of product recalls which absorbed top management's attention. (shrink)

After the corporate scandals at the beginning of the new millennium, corporate governance codes were drafted and implemented in national laws and regulations. Unfortunately, due to an ongoing supply of new financial scandals and societal deceptions, our society increasingly distrusts executive directors, non-executive directors and supervisory board members, as they often appeared to play a significant role in these scandals. Nonexecutive directors (NEDs) and supervisory directors (SDs) are often accused of having overlooked the important issues in their supervising role (...) or having failed to intervene in company decision making. Previous research has shown that many NEDs and SDs operate on the basis of their own unwritten rules, which may very well be different from those of their colleagues. In this article we examine whether and how a code of conduct or code of ethics might help to further clarify how NEDs/SDs should act. We also investigated the views of NEDs/SDs themselves. It appears that current corporate governance codes are not sufficient to guide directors on behavioral aspects of their supervisory role. This article shows that a code of conduct could provide this guidance to NEDs/SDs on several issues. First, a code of conduct would compel the Supervisory Board to reflect on its own values. Second, it would compel NEDs/SDs to verbalize their unwritten rules. The results may be applied internationally and could have relevance to the experience of executive directors in addition. This article may serve as a discussion document for other jurisdictions in addition. (shrink)

Business codes are an oft-cited management instrument. But how common are codes among multinationals? And what is their content? In an unprecedented study, the codes of the largest corporations in the world have been collected and thoroughly analyzed. This paper presents the results of that study. Of the two hundred largest companies in the world, 52.5% have a code. More than half of these codes describe company responsibilities regarding quality of products and services (67%), adherence (...) to local laws and regulations (57%) and the protection of the natural environment (56%). Many codes make reference to principles governing stakeholder relations (e.g. transparency (55%), honesty (50%) and fairness (45%)), corporate core values (e.g. teamwork (43%)), appropriate conduct among employees (e.g. discrimination (44%) and intimidation (43%)) and treatment of company property by employees (e.g. conflict of interests (52%), corruption (46%) and fraud (45%)). Monitoring compliance with the code is addressed in 52% of the codes. Based on this content study, three types of codes are distinguished: the stakeholder statute (72%), the values statement (49%) and the code of conduct (46%). The results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes. (shrink)

Most large companies and many smaller ones have adopted ethics codes, but the evidence is mixed as to whether they have a positive impact on the behavior of employees. We suggest that one way that ethics codes could contribute to ethical behavior is by influencing the perceptions that employees have about the ethical values of organizations. We examine whether a group of sales professionals in organizations with ethics codes perceive that their organizational context is more supportive of (...) ethical behavior than sales professionals in companies without codes. After accounting for the effect of several covariates, our results indicated that sales professionals employed in organizations with codes of ethics perceived their work environments to have more positive ethical values than did other sales professionals. (shrink)

Companies often develop codes prescribing an ethical organizational environment. However, the ability of ethics codes to increase individuals' tolerance of diversity is not fully considered in the ethics literature. This relationship was explored using a sample of 143 business and legal professionals. After accounting for the impact of several covariates, results indicated that professionals employed in organizations that had an ethics code were more tolerant of societal diversity than were professionals working in organizations that did not have an (...) ethics code. The findings also showed that a traditional orientation toward gender roles was also related to the acceptance of diversity. These findings imply that companies to some degree define societal norms, possibly through training programs that make employees aware of their differences. (shrink)

The study examines employee, managerial, and ethics officer perceptions regarding their companies codes of ethics. The study moves beyond examining the mere existence of a code of ethics to consider the role that code content and code process (i.e. creation, implementation, and administration) might play with respect to the effectiveness of codes in influencing behavior. Fifty-seven in-depth, semi-structured interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The factors viewed by respondents to be (...) important with respect to code effectiveness include: provisions of examples; readability; tone; relevance; realism; senior management support; training; reinforcement; living up to standards; reporting requirement; anonymous phone line; communicating violations; and enforcement. The factors found to be potentially important include: justification for provisions; employee involvement; and sign-off requirements. Factors found not to be important include: objectives for the code; prior distribution; testing; and relating ones performance review to compliance with the code. (shrink)

While most large companies around the world now have a code of ethics, reported ethical malpractice among some of these does not appear to be abating. The reasons for this are explored, using academic studies, survey reports as well as insights gained from the Institute of Business Ethics' work with large corporations. These indicate that there is a gap between the existence of explicit ethical values and principles, often expressed in the form of a code, and the attitudes and behaviour (...) of the organisation. The paper suggests that two basic reasons appear to be at the heart of the problem: ineffective ethics programmes and deficiencies in corporate culture. The paper concludes that successfully embedded corporate ethical values requires well-designed ethics policies, sustained ethical leadership and incorporation of ethics in organisational processes and strategy as part of an ethical culture at all levels of the organisation. It makes some practical suggestions on how this can be achieved. (shrink)

While most large companies around the world now have a code of ethics, reported ethical malpractice among some of these does not appear to be abating. The reasons for this are explored, using academic studies, survey reports as well as insights gained from the Institute of Business Ethics' work with large corporations. These indicate that there is a gap between the existence of explicit ethical values and principles, often expressed in the form of a code, and the attitudes and behaviour (...) of the organisation. The paper suggests that two basic reasons appear to be at the heart of the problem: ineffective ethics programmes and deficiencies in corporate culture. The paper concludes that successfully embedded corporate ethical values requires well‐designed ethics policies, sustained ethical leadership and incorporation of ethics in organisational processes and strategy as part of an ethical culture at all levels of the organisation. It makes some practical suggestions on how this can be achieved. (shrink)

We create a database of company codes of ethics from firms listed on the Standard & Poor's 500 Index and, separately, a sample of small firms. The SEC believes that "ethics codes do, and should, vary from company to company." Using textual analysis techniques, we measure the extent of commonality across the documents. We find substantial levels of common sentences used by the firms, including a few cases where the codes of ethics are essentially (...) identical. We consider these results in the context of legal statements versus value statements. While legal writing often mandates duplication, we argue that value-based statements should be held to a higher standard of originality. Our evidence is consistent with isomorphic pressures on smaller firms to conform. (shrink)

In this article, we focus on the cross-cultural aspects of the implementation of an American company's code of ethics into its Swedish subsidiary. We identify the cross-cultural stories that the receivers in the subsidiary use when trying to explain the parent's code and conceptualize these stories as part of an emerging narrative of national belonging and differences. The receivers resisted the code by amplifying the importance of national identity. Rather than stimulating a discussion on ethics that might have strengthened (...) the ties between the parent and the subsidiary, the outcome of the code implementation had the opposite effect. The article concludes by stressing the process of implementing codes across cultures rather than code content. (shrink)

Codes of conduct have become the perhaps most often used tool to manage corporate social responsibility (CSR). Researchers have primarily analysed such documents at company-wide or trans-company levels, whereas there is a dearth of studies into the use of codes for particular corporate functions. Hence, this article will examine one particular group of sub-company level codes, namely codes of conduct that stipulate CSR criteria for suppliers. Examining such ethical sourcing policies adopted by the (...) FTSE100 corporations, the article draws out what environmental, social and economic issues large corporations perceive to be important in the management of their supply chains. At an aggregate level, the coverage of CSR issues is rather extensive, yet at the level of the individual corporation a degree of selectivity in the issues that are addressed becomes noticeable. The code content analysis furthermore confirms the business case and public pressure to be the most important drivers of CSR. Finally, the study highlights the role of isomorphic processes in the adoption of CSR tools. (shrink)

This article outlines a training activity that can enable both business and governmental professionals to translate the principles in a code of ethics to a specific list of company-related behaviors ranging from highly ethical to highly unethical. It also explores how this list can become a concrete model to follow in making ethical decisions. The article begins with a discussion as to what will improve ethical decision making in business and government. This leads us to explore the factors that (...) can most easily lead to improvement, namely a comprehensive code of conduct and employee training. From there we look at the Critical Incident Technique as a training strategy that has the potential for identifying those behaviors that distinguish really outstanding behaviors from those that go by the book, and can be used to encourage more independent thinking and to set expectations for future decisions. If employees are given the skills and examples that will enable them to make better decisions, they can apply them to any situation. (shrink)

Developing and implementing a meaningful code of conduct by managers or consultants may require a change in orientation that modifies the way these precepts are determined. The position advocated herein is for a different approach to understanding and organizing the guiding parameters of the firm that requires individual reflection and empowerment of the entire organization to advance their shared values. The processes involved are discussed using four discrete stages that move from the personal to the work team and to the (...) unit to the full company, followed by the board of directors’ evaluation. The hoped-for end product is dynamic, employee-driven, codes of conduct that recognize the systemic and far-reaching impact of organizational activities across internal and external stakeholders. Operational details for and some issues associated with its implementation are also provided. (shrink)

Corporate codes of conduct are a practical corporate social responsibility (CSR) instrument commonly used to govern employee behavior and establish a socially responsible organizational culture. The effectiveness of these codes has been widely discussed on theoretical grounds and empirically tested in numerous previous reports that directly compare companies with and without codes of conduct. Empirical research has yielded inconsistent results that may be explained by multiple ancillary factors, including the quality of code content and implementation, which are (...) excluded from analyses based solely on the presence or absence of codes.This study investigated the importance of code content in determining code effectiveness by examining the relationship between code of conduct quality and ethical performance. Companies maintaining high quality codes of conduct were significantly more represented among top CSR ranking systems for corporate citizenship, sustainability, ethical behavior, and public perception. Further, a significant relationship was observed between code quality and CSR performance, across a full range of ethical rankings. These findings suggest code quality may play a crucial role in the effectiveness of codes of conduct and their ability to transform organizational cultures.Future research efforts should transcend traditional comparisons based on the presence or absence of ethical codes and begin to examine the essential factors leading to the effective establishment of CSR policies and sustainable business practices in corporate culture. (shrink)

The term ‘responsible AI’ has been coined to denote AI that is fair and non-biased, transparent and explainable, secure and safe, privacy-proof, accountable, and to the benefit of mankind. Since 2016, a great many organizations have pledged allegiance to such principles. Amongst them are 24 AI companies that did so by posting a commitment of the kind on their website and/or by joining the ‘Partnership on AI’. By means of a comprehensive web search, two questions are addressed by this study: (...) Did the signatory companies actually try to implement these principles in practice, and if so, how? What are their views on the role of other societal actors in steering AI towards the stated principles? It is concluded that some three of the largest amongst them have carried out valuable steps towards implementation, in particular by developing and open sourcing new software tools. To them, charges of mere ‘ethics washing’ do not apply. Moreover, some 10 companies from both the USA and Europe have publicly endorsed the position that apart from self-regulation, AI is in urgent need of governmental regulation. They mostly advocate focussing regulation on high-risk applications of AI, a policy which to them represents the sensible middle course between laissez-faire on the one hand and outright bans on technologies on the other. The future shaping of standards, ethical codes, and laws as a result of these regulatory efforts remains, of course, to be determined. (shrink)

Codes of conduct have proliferated not only at company level, but also at supra-and suborganisational levels. However, the latter have remained an under-researched area within the CSR literature. Hence, this article examined what range of organisational and sub-organisational codes large companies - here the FTSE100 constituent companies -have developed. The article isolated seven different types of organisational and sub-organisational codes, which together with six supraorganisational ones form a lattice-work of intermeshing documents. Such a division of labour (...) between types of codes has two significant implications for CSR practice and research. In terms of corporate practice, an analysis of the content of the organisational and sub-organisational codes indicates that companies seem to enter into generalised commitments in the more visible documents, whereas other aspects, in particular more coercive aspects of CSR, get buried in the lower levels of the code hierarchy. In terms of research methodology, the differentiation between codes highlights that an analysis of codes of conduct alone is insufficient to establish what the CSR approach of a company is. Rather, it is the entire range of codes at organisational and sub-organisational levels that scholars of codes of conduct should be concerned with. (shrink)

Codes of ethics exist in many, if not the majority, of all large U.S. companies today. But how the impact of these written codes affect managerial attitudes and behavior is still not clearly documented or explained. This study takes a step in that direction by proposing that attention should shift from the codes themselves as the sources of ethical behavior to the persons whose behavior is the focus of these codes. In particular, this study investigates the (...) role of code familiarity as a factor impacting the influence of an ethics code on manager behavior. Data collected from 286 executives from companies in the direct selling industry are used to test hypotheses (1) that the perceived usefulness of ethics codes is positively related to the degree of familiarity with the code, and (2) that ethical climate as assessed by managers is positively related to the code''s perceived usefulness. Both hypotheses are supported, and their implications and further research directions are discussed. (shrink)

Nine codes of ethics from companies in the Swedish financial sector were subjected to a content analysis to determine how they address and treat employees. The codes say a great deal about employee conduct and misconduct but next to nothing about employee rights, their rightful expectations or their value to the firm. The normative analysis – echoing some of the value-based HRM literature – draws on the foundational values of respect, equality, reciprocity and care. The analysis shows that (...) most of the codes are in conflict with these values. Such a treatment is then in conflict with fairness and risks harming the employees. Some of the features that make these codes ethically problematic are typical of how corporate codes have been described in previous code studies. Consequently, the normative analysis reaches beyond the scope of this material and in the end, what is at stake, is a very typical code design. (shrink)

Companies are increasingly singing up to a range of corporate responsibility codes and other voluntary commitments. Using evidence from the mining industry’s experience with the Australian Greenhouse Challenge, the Minerals Council’s Code for Environmental Management and the ISO14001 Specification for Environmental Management Systems, this article examines whether the outcomes from the adoption of multiple voluntary approaches differ from those outcomes that would be expected if each voluntary approach was adopted in isolation. The article demonstrates that it is feasible for (...) companies to participate in multiple voluntary approaches and to derive benefits such as reduced transaction costs, improved data quality and enhanced implementation. However, there is limited evidence that the voluntary approaches in combination have enhanced environmental performance, economic efficiency, innovation or competitiveness beyond that which would be achieved from each of the approaches in isolation. Furthermore, many of the limitations of voluntary approaches (in particular, environmental performance, acceptability to NGOs) remain. (shrink)

This study examines the role of codes of ethics in reducing the extent to which managers act opportunistically in reporting earnings. Corporate codes of ethics, by clarifying the boundaries of ethical corporate behaviors and making relevant social norms more salient, have the potential to deter managers from engaging in opportunistic financial reporting practices. In a sample of international companies, we find that the quality of corporate codes of ethics is associated with higher earnings quality, i.e., lower discretionary (...) accruals. Our results are confirmed for a subsample of firms more likely to be engaging in opportunistic reporting behavior, i.e., firms that just meet or beat analysts’ forecasts. Further, codes of ethics play a greater role in reducing earnings management for firms in countries with weaker investor protection mechanisms. Our results suggest that corporate codes of ethics can be a viable alternative to country-level investor protection mechanisms in curbing aggressive reporting behaviors. (shrink)

In the past ten years, many European companies organised into subcontracting networks have decided to adopt codes of conduct to regulate labour relations and to ensure the respect of fundamental social rights. This paper first determines the context and the issues to be addressed by codes of conduct within networks of companies, and second analyses the terms under which they can be implemented. The paper argues that codes of conduct can complement the standards developed by States, the (...) European Union or the social partners, but that steps should be taken in order to avoid that these texts replace the existing labour law. (shrink)

Sarbanes–Oxley Section 406 requires a code of ethics for top financial and accounting officers in public companies. The objective of this research is to discover the impact of a financial code of ethics on firm behavior. We performed a longitudinal tracking of firm adoption of a financial code of ethics starting in 2005. We checked these companies’ codes again in 2011 to confirm their continued implementation. Financial restatements were used as a dependent variable to measure improved financial reporting after (...) the adoption of the financial codes. The results confirm that the adoption of a financial code of ethics improves the integrity of financial reporting. (shrink)

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. (shrink)

Labour and employment law no longer has a monopoly on regulating labour relations and is facing a crisis as its effectiveness isquestioned. Codes of conduct adopted by companies to recognise their social responsibility for the global supply chain are instruments that can usefully complement labour and employment law. The aim of this paper is to analyse in depth the legal nature of codes of conduct and their impact on labour and employment law. Will the use of codes (...) of conduct reinforce the crisis of labour and employment law in the era of globalisation or will these codes be part of a solution to this crisis? Do we have to consider codes of conduct as competitors to labour and employment law or as an opportunity for rethinking the way that labour and employment law norms should be produced and applied? (shrink)

Labour and employment law no longer has a monopoly on regulating labour relations and is facing a crisis as its effectiveness isquestioned. Codes of conduct adopted by companies to recognise their social responsibility for the global supply chain are instruments that can usefully complement labour and employment law. The aim of this paper is to analyse in depth the legal nature of codes of conduct and their impact on labour and employment law. Will the use of codes (...) of conduct reinforce the crisis of labour and employment law in the era of globalisation or will these codes be part of a solution to this crisis? Do we have to consider codes of conduct as competitors to labour and employment law or as an opportunity for rethinking the way that labour and employment law norms should be produced and applied? (shrink)

Western buying companies impose Supplier Codes of Conduct (SCC) on their suppliers in developing countries; however, many suppliers cannot fully comply with SCC and some of them even cheat in SCC. In this research, we link contract characteristics - price pressure, production complexity, contract duration - to the likelihood of supplier's commitment to SCC through a mediating process: how the buying companies govern their suppliers. Our structural equation model analysis shows that the hierarchy/relational norms governance is a perfect mediator (...) of contract characteristics' effects on the likelihood of supplier's commitment; the market governance, an insignificant one. The managerial implications are provided for successfully implementing SCC in global supply chains. (shrink)

As a result of recent corporate scandals, several rules have focused on the role played by Boards of Directors on the planning and monitoring of corporate codes of ethics. In theory, outside directors are in a better position than insiders to protect and further the interests of all stakeholders because of their experience and their sense of moral and legal obligations. Female directors also tend to be more sensitive to ethics according to several past studies which explain this affirmation (...) by early gender socialization, the fact that women are thought to place a greater emphasis on harmonious relations and the fact that men and women use different ethical frameworks in their judgments. The goal of this paper is to determine the influence of these characteristics of the Board in terms of promoting and hindering the creation of a code of ethics. Our findings show that a greater number of female directors does not necessarily lead to more ethical companies. Moreover, within Europe as a continent, board ownership leads to an entrenchment of upper-level management, generating a divergence between the ethical interests of owners and managers. In light of this situation, the presence of independent directors is necessary to reduce such conflicts. (shrink)