Why is a code of conduct important for your business?
Regardless of whether you run a small business with one or a handful of employees, a medium-sized enterprise or a multinational corporation, you and your business will benefit from expressing your company values and having a guide to good behaviour. Having a well-drafted code of conduct is especially beneficial for small businesses, as relatively minor displays of inappropriate behaviour could disrupt the entire company.
It is important to have a code of conduct in your business because it allows you to determine whether the values and ethics on which your business is based are being upheld. A code of conduct provides you and your employees with a yardstick to judge whether certain behaviours are acceptable or unacceptable. It promotes cohesiveness within your business, as it clarifies the common values and ethics that everyone in the company is expected to demonstrate.
How to write a small business code of conduct
Here are five steps that you can use as a guide to help you develop your code of conduct:
1. Decide what information you need to include
You should adapt your code of conduct to the needs of your business, but here are some common sections that codes of conduct usually include:
- your business’s values
- legal obligations and compliance with laws that apply to your business
- accountability (examples include taking responsibility for your actions, exercising diligence and fulfilling duty of care obligations)
- standard of conduct (examples include commitment to the business and proper use of computers, internet and email)
- standard of practice (examples include observing the current policies and procedures and the business operations manual)
- disciplinary actions (examples include the complaints handling procedure and specific penalties for breaches of the code)
- signature page
These are the most important sections you need in your small business code of conduct. You might want to include other sections that are important to your business, for example, work-life balance or volunteering.
2. Write a draft
Now you’ve identified the key information, it’s time to start writing your draft. As you’re writing, you might want to keep the following considerations in mind: Be clear, descriptive and provide enough detail. A good code of conduct should be easy for employees to understand and clearly lay out what is expected of them. Make sure you provide enough detail so that employees understand what you expect of them. It’s a good idea to include examples that clearly illustrate expected behaviours. Structure it logically. A logical and intuitive structure will make your code of conduct much easier for your staff to understand and therefore abide by. The three main sections of your code should be presented in this order: your values and mission statement , followed by your policies and, finally, disciplinary actions. Avoid jargon. Use plain language that everyone can understand. Try not to use too much industry-specific jargon or acronyms, which may not be understood by everyone.
3. Get feedback
Your code of conduct will govern your employees’ behaviour, so it’s important to get their input after you have drafted your code. Discuss what ethics means to them and what values and beliefs they associate with your business. Their input will be helpful as you finalise the document, and clarifying any concerns or doubts at this early stage should mean you won’t have to deal with lots of questions and confusion down the track.
4. Give the revised version to employees
Once you’ve incorporated the suggestions from your employees into the finalised document, you can hand it out to all of your employees. There should be a space in the document for their signature to indicate they agree to abide by the code. Be sure to keep your code of conduct somewhere that is accessible to all employees, for example the employee handbook , so that they can refer to it when needed. New employees can sign the code during onboarding after receiving training on its contents.
5. Regularly re-evaluate your code
It’s important that your code of conduct continues to reflect your values and keeps pace with any changes. You may need to make minor adjustments to the language or perhaps add or remove sections as your business changes. Aim to review your code of conduct every year or two. You can involve your employees in this process by asking them what they think is working and what needs to be revised.
Six tips for drafting an effective code of conduct
Here are some useful tips to bear in mind when you are writing your code of conduct:
- Make it yours. Avoid writing a generic code of conduct. It should be tailored to your business’s values, beliefs and work. For example, if you work with LGBTIQ+ organisations, you should be descriptive about what is expected in terms of respect for diversity and working with LGBTIQ+ communities.
- Set clear expectations. Try to make your expectations for behaviour in the workplace clear, simple and concise. Consider using pictures, graphics, flow charts and descriptive examples.
- Don’t focus only on the negative. While it’s important to be clear about which behaviours are unacceptable, using only negative statements (‘You must not …’ or ‘… is prohibited’) is less likely to motivate your employees to comply with your code of conduct. Consider creating a more positive tone by including at least one section devoted to behaviours that are acceptable, encourage or expected. For example, ‘We all must ensure that everyone is treated with dignity and respect’.
- Be clear about restrictions outside of work. Given the risk of reputational damage to your business that can result from your employees’ actions in their private lives, it’s important to consider setting expectations for expected behaviour outside of work as well. The controversy surrounding Israel Folau, who breached Rugby Australia’s Code of Conduct by posting homophobic comments on his private Instagram account, illustrates that reputational damage is a serious risk for large organisations with prominent employees who attract a lot of media attention. However, reputational damage can also affect small businesses because your employees may disclose their workplace or post photos of themselves at work on their social media accounts.
- Include links to other resources. You might find it useful to include links to other ethical resources, which your employees can read in their own time and you can incorporate into training sessions. You could add this list of resources at the end of your code of conduct. Many ethical resources are freely available, for example, about behaviour towards vulnerable people or people with a disability.
- Actively promote it. Your code of conduct should not be filed away and only brought out when someone is disciplined for breaching it. You can incorporate your code into recruitment, orientation and training sessions. Get creative about how you can bring your code of conduct to life! You could refer to parts of it in your staff newsletter, for example, or place copies of different sections with illustrations around your workplace.
Developing a code of conduct can be a daunting process, but by following the advice in this article, you can create an effective code of conduct that will contribute to your business success.
