Code of Ethics: Definition, Examples & vs Code of Conduct

A code of ethics is a formal statement of an organisation’s or profession’s underlying values, principles, and ethical standards that guide decision-making and conduct.

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Code of Ethics is a formal statement of an organisation’s underlying values and principles that guide decision-making, particularly in situations where rules alone do not provide clear answers.

Image showing the meaning of Code of Ethics

Code of ethics vs code of conduct: the foundational distinction

Dimension	Code of ethics	Code of conduct
Focus	Principles, values, ideals, the ‘why’	Rules, behaviours, requirements, the ‘what’ and ‘how’
Level of abstraction	High; aspirational; principle-based	Specific; actionable; rule-based
Tone	‘We commit to…’	‘You must…’ / ‘Do not…’
Length	Shorter, often 1-3 pages	Longer, often 20-60 pages
Enforcement	Principles invoked in disciplinary cases	Specific violations trigger specific consequences
Example clause	‘We act with integrity in all business dealings.’	‘Do not use company credit cards for personal expenses; submit expense reports within 30 days.’
Primary purpose	Inspirational; identity; decision-framework for novel situations	Operational; compliance; specific behaviour guidance

Standard code of ethics structure

1. Preamble or purpose statement

Brief statement of the organisation’s reason for the code, including the relationship with employees, clients, stakeholders, and society.

2. Core values

Articulated values, typically 4-8, that the organisation commits to. Common values include integrity, respect, responsibility, fairness, excellence, transparency, accountability, and service.

3. Ethical principles

More specific principles operationalising the values: – Honesty and transparency in dealings – Respect for the dignity and rights of all individuals – Fair dealing with stakeholders – Stewardship of organisational resources – Compliance with law and beyond-law ethical standards – Commitment to the public interest

4. Stakeholder commitments

Specific commitments to each major stakeholder group: employees, customers, shareholders, suppliers, communities, and regulators.

5. Decision-making framework

Guidance for applying the ethics in novel situations, often including questions like ‘Is it legal? Is it consistent with our values? Would it stand up to public scrutiny? How would it affect our stakeholders?’

6. Conflict resolution and reporting

How to raise ethical concerns, protection for reporters, and the process for ethical dilemma resolution.

Notable professional codes of ethics

ICF Code of Ethics (coaching). Core values: integrity, excellence, collaboration, respect. Covers responsibility to clients, confidentiality, conflicts of interest, and continuing development.
AMA Principles of Medical Ethics (medicine). Nine principles dating to 1847 (latest revision 2001) covering competent medical care, honest dealings, respect for patients, and service to the community.
AICPA Code of Professional Conduct (accounting). Six principles for CPAs: responsibilities, public interest, integrity, objectivity and independence, due care, and scope of services.
SHRM Code of Ethics (HR). Six core principles covering professional responsibility, professional development, ethical leadership, fairness and justice, conflicts of interest, and use of information.
CIPD Code of Professional Conduct (UK HR). Standards for CIPD members covering professional competence, ethical standards, and representing the profession.
IEEE Code of Ethics (engineering). Ten ethical obligations including safety, honest dealing, and continuing professional learning.

Corporate code of ethics: SOX 406 and beyond

For US public companies, Sarbanes-Oxley Section 406 (enacted 2002) imposes specific obligations:

Disclosure obligation. Companies must disclose whether they have a code of ethics applicable to the CEO, CFO, principal accounting officer, and similar functions, and if not, why not.
Substantive requirements. The code must promote honest and ethical conduct, accurate disclosures in SEC reporting, compliance with laws, prompt internal reporting of violations, and accountability for adherence.
Waiver disclosure. Any waivers granted to executive officers must be disclosed within 4 business days via Form 8-K.
NYSE / NASDAQ requirements. NYSE (Rule 303A.10) and NASDAQ listing rules require codes of business conduct and ethics applicable to all directors, officers, and employees, extending beyond the narrower Sarbanes-Oxley scope.

Implementation: making the code of ethics real

1. Build the code with leadership commitment. Codes drafted without leadership endorsement produce paper documents. Visible CEO and board commitment is the foundation.

Involve stakeholders in drafting. Employees, customers, board members, and community representatives. A code reflecting only management’s perspective lacks broader credibility.
Test it against real dilemmas. Draft cases, real or hypothetical, to test whether the code provides usable guidance in hard cases.
Train substantively, not procedurally. Ethics training that produces behaviour change uses scenarios, dilemmas, and discussion, not just acknowledgment checkboxes.
Demonstrate at the top. Senior leaders’ visible ethical behaviour is the credibility test. Codes contradicted by senior behaviour become institutional dead letters.
Integrate into decisions. Reference the code in actual business decisions; cite it in management communications; use it as a decision frame in difficult cases.
Refresh and reaffirm. Annual reaffirmation; substantive review every 3-5 years; faster when major issues arise (AI ethics, data privacy, ESG considerations).
Measure ethical climate. Climate Surveys measuring ethical perceptions complement compliance metrics.

See also Code of Conduct for the paired operational document, Code of Practice for external statutory codes, Coaching for the ICF ethics example, and CIPD for UK HR professional ethics.

Frequently asked questions

A code of ethics is a formal statement of an organisation’s or profession’s underlying values, principles, and ethical standards that guide decision-making and conduct. The code articulates moral commitments that define what the organisation or profession stands for and how members approach decisions where rules alone do not provide answers. Widely used by professional bodies (ICF, AMA, ABA, AICPA, SHRM, CIPD) and corporations as a foundational governance document.

A code of ethics articulates underlying values and principles, high-level, aspirational, the ‘why’ (e.g., ‘We act with integrity in all business dealings’). A code of conduct specifies the rules and behaviours expected to enforce those principles, specific, rule-based, the ‘what’ and ‘how’ (e.g., ‘Do not use company credit cards for personal expenses’). The code of ethics provides the foundation; the code of conduct operationalises it. Mature organisations maintain both as a coherent stack.

Codes of ethics serve multiple purposes: articulating identity and values, guiding decision-making in novel situations where rules do not apply, signaling commitments to stakeholders, supporting compliance program credibility, and meeting regulatory requirements (SOX 406 for US public companies, professional body requirements for licensed professionals). The DOJ’s Evaluation of Corporate Compliance Programs considers codes during charging decisions and sentencing.

Standard structure: preamble or purpose statement, core values (typically 4-8 articulated values), ethical principles (honest dealing, respect, fairness, stewardship, compliance, public interest), stakeholder commitments (employees, customers, shareholders, suppliers, communities), decision-making framework for novel situations, conflict resolution and reporting mechanisms, and acknowledgment with periodic review. Plain language, real examples, and integration with strategy support actual behaviour change.

For US public companies, Sarbanes-Oxley Section 406 requires disclosure of whether a code of ethics applies to senior financial officers and disclosure of any waivers within 4 business days. NYSE (Rule 303A.10) and NASDAQ listing rules extend code requirements to all directors, officers, and employees. Licensed professionals (lawyers, doctors, accountants) operate under professional body codes enforced through licensing. Private corporations typically maintain codes for governance reasons.

Notable professional codes include: ICF Code of Ethics (coaching), AMA Principles of Medical Ethics (medicine, dating to 1847), AICPA Code of Professional Conduct (accounting), ABA Model Rules of Professional Conduct (law), SHRM Code of Ethics (HR), CIPD Code of Professional Conduct (UK HR), APA Ethical Principles of Psychologists, and IEEE Code of Ethics (engineering). Violations of professional body codes can affect professional licensing or membership.

Code of Ethics