Question

Accounting is important to society and internal controls are an important part of ensuring the integrity and reliability of accounting information. The first step in creating a strong system of internal control is the establishment of a steadfast foundation of corporate governance. This foundation establishes the guidelines by which management will act as an example for employees and the public. Measures are needed to establish this foundation such as a corporate code of conduct. Once these measures are in place, further internal controls can be developed which will mirror and support the corporate governance created. Do you have any experience with an organization you work for establishing or revising their code of conduct? If you do not, discuss what you believe should be included in an organization’s code of conduct.

Answer 1

Staff code of conduct

A code of conduct states the rules, values, ethical principles and vision for your business. Code of conduct in your workplace provides staff with clear standards and expectations of how to do their job. It's important for staff to understand and agree to your code of conduct, as their compliance with the code helps to build your business's reputation.

Your code of conduct should be followed whenever employees are working for or representing your business. This includes when they are:

• performing work in the workplace
• taking business trips
• attending work-related social events
• representing you or your business.

Writing a code of conduct

Written code of conduct is important, as it provides clear instructions about what your staff can and can't do.

What a code of conduct should include

The most common sections to include in a code of conduct are:

1. Ethical principles - includes workplace behavior and respect for all people

1. Values - includes an honest, unbiased and unprejudiced work environment
2. Accountability - includes taking responsibility for your own actions, ensuring appropriate use of information, exercising diligence and duty of care obligations and avoiding conflicts of interest
3. Standard of conduct - includes complying with the job description, commitment to the organization and proper computer, internet and email usage
4. Standard of practice - includes current policies and procedures and business operational manual
5. Disciplinary actions - includes complaints handling and specific penalties for any violation of the code.   

You can customize the different sections in your code of conduct to match your business requirements and the rules and policies you set for your staff. Search the internet for samples and templates or use another organization’s code of conduct as a guide.

Getting staff input

When writing your code of conduct, you should consult your staff and stakeholders for their input. Consider how you will include their input in your document. The following points should include in your questions:

• What does ethics mean to you?
• How effectively does the business put its values into practice?
• Can we improve our ethical performance?
• What do you think of the draft ethical guidelines?
• Would this code of conduct help you make decisions?
• How could it be more helpful?
• Is there anything else we should include?

How to write a code of conduct

• Use simple, clear language that all employees can understand.
• Use examples of acceptable and unacceptable behaviour to clarify points.
• Get someone else to read the document before finalising it. A friend or family member can help, but a professional proofreader would be best.

Don't Forget ........

• Learn more about ethical sales practices.
• Learn about legal codes of practice for your industry.
• Find out about anti-discrimination and equal opportunity.
• Read more about voluntary and mandatory codes of conduct.
• Learn about business values.

Reviewing a Code of Conduct

To keep your code of conduct up to date you should review it regularly; once or twice a year should be enough. Once you have reviewed and amended the code of conduct, provide all staff with the updated code and any training required.

Reviewing the code

Review each section of your code of conduct and make sure it still represents the values of your business. You should also review current standards and guidelines and any new policies introduced for the business.

Consider any areas that could be added to your code, especially if your business has grown or changed significantly since your last review. For example, if your business has started selling products online you may need a new section covering online selling behaviour.

Reviewing staff understanding

You can review staff understanding of your code of conduct by requiring them to complete a survey or questionnaire. Focus your questions on any new sections and particular areas of your code that you think your staff may not fully understand.

The surveys will identify areas that staff may need further training in and areas of your code that may be unclear and need reviewing. Follow up on the survey to ensure that all staff understand what is expected of them. When they are happy with the new code, have them sign a document to say that they accept.

Also consider...

• Learn how to develop staff through mentoring.
• Read about staff performance reviews.
• Find out about developing your leadership skills.