In drafting and updating my code of conduct and ethics it is always useful to see what other companies are doing. I look for both approach, content and style. For instance, I collected the Whistleblower Hotlines for Home Builders. It is great to see a comparison of a group of compliance codes. KPMG put together a study of the codes of conduct for the Fortune Global 200 companies: Business codes of the Global 200 — their prevalence, content and embedding (.pdf).
A good and properly implemented business code is not just a nice thing to have; it is based on an all-encompassing business need. A business code contributes to an organization’s strategic positioning, to strengthening its identity and reputation, to an improved corporate culture and work climate, and to improved financial performance. A business code and the compliance program to implement it are the cornerstone of an organization.
This whitepaper illustrates some of the results from a study that KPMG conducted with RSM Erasmus University. In 1990 only 14% of the Global 200 had a code of conduct but in 2007 86% of them have a code, including 100% of North American firms.
A few interesting things jumped out at me.
The codes are mostly directed at employees, with less than half discussing corporate responsibility to shareholders. I found this strange since the purpose of the code should be to protect the shareholder’s investment and provide a long-term result for shareholders. It is the focus on the short-term that leads to trouble.
Although 73% of the codes refer to the acceptance of gifts, only 59% refer to the offering of gifts. You would expect a code to address both. Since both offer the same danger of being viewed as bribery.
See:
- Business codes of the Global 200 (.pdf)
- Code of Business Ethics for Jones Lang LaSalle – previous post
- Whistleblower hotlines for Home Builders – previous post
“A business code contributes to an organization’s strategic positioning, to strengthening its identity and reputation, to an improved corporate culture and work climate, and to improved financial performance. A business code and the compliance program to implement it are the cornerstone of an organization.”
That hits the nail on the head.
I have seen too many companies take much too long to come to terms with this basic truth.
My company began implementing ethics training, and our turnover rate started (and still maintains) a steep decline. Not to mention the money we’ve saved being able to train in-house with a web-based program. The provider even cusom-built our training courses specifically for the company. It ended up being substantially more cost-effective than an in-class setting.