3 Tips for Writing a Code of Ethics for Your Business

In the fall of 1982, seven people became victims of the still-unsolved Tylenol tampering incident. James Burke, at the time CEO of Tylenol’s parent company Johnson & Johnson, wasted no time pulling Tylenol from the shelves — even though it cost the company $100 million

What fueled Burke’s quick decision? The Johnson & Johnson credo, or code of ethics. Decades later, Johnson & Johnson’s Credo is still upheld as a model for ethical decision-making in business, and the company’s response is used as a case study for the Department of Defense’s course in crisis communication

Thankfully, incidents this extreme aren’t common. However, all organizations need an ethical decision-making framework in place to guide employee choices in daily operations. Small actions add up and either produce an ethical culture — or set the stage for unethical behavior to flourish. What do you want your organizational culture to be known for? 

An excellent code of ethics helps employees make the right decisions when faced with ethical dilemmas. Here’s how to write a code of ethics that acts as a blueprint for the behaviors and culture you want to see at your organization.

Revisit Your Mission, Purpose and Values

If you expect to use your code of ethics as a decision-making framework, then you must ensure that it aligns with your current values. “Make sure that your code is consistent with your mission and purpose,” says Ann Gregg Skeet, Senior Director of Leadership Ethics at the Markkula Center for Applied Ethics. “Your highly referenced documents should also be highly utilized in day-to-day operations.”

Your mission, purpose and values provide the blueprint for your code of ethics, and the behaviors you want your employees to model. If your organization has evolved since those documents were written, revisiting them gives you a chance to update those statements to be more actionable and to match the culture that has grown up around them.

Tap into Employee Values

To create a code of ethics that’s functional for everyone, it’s essential to include viewpoints from across the organization. “You need to have employees participate in writing the code of ethics,” says Chris MacDonald, chair at the Department of Law and Business at the Ted Rogers School of Management and blogger at The Business Ethics Blog. “A values-based code of ethics can't be imposed from the top down — it has to flow from the front lines upward.”

Skeet agrees. A code of ethics should account for the people who are affected, and employees are a large part of that. Involving employees in writing the code of ethics also demonstrates that the company trusts employees to make ethical decisions, Skeet points out. Employee polling and focus groups can give HR a snapshot of existing employee values and behaviors that drive an ethical company culture.

Identify Ethical Principles to Guide Behavior

Work is changing at a rapid pace, but you can write a code of ethics to withstand change. First and foremost, Skeet says, your code promotes the wellbeing of customers, employees and society. Defining ethical principles on the front end helps you anticipate problems downstream. A potential concern with data, for example, is privacy. Committing to transparency suggests full disclosure and consent from stakeholders prior to data usage. This minimizes one of the downstream effects of data use.

“It's increasingly important to give employees the tools to adapt, which means focusing not just on rules — which could be out of date next year — but underlying principles and values,” MacDonald says. “Give people a sense of what matters so that when they find themselves on unfamiliar ground, they still have a sense of what they ought to do.”