Creating a Code of Conduct for Your Small Business

As a small business owner, you have certain behavior expectations for employees. To guide workers on ethics and how to represent your company, consider creating a code of conduct.

What is a code of conduct?

A code of conduct policy is a set of rules for employees that outlines your business’s mission, values, and expectations. And, the policy outlines acceptable employee behavior. A code of conduct is also called a code of ethics. Businesses typically include a copy of the code of conduct in the employee handbook.

One purpose of having a code of ethics is to protect your business. Your code of conduct lays out principles and guidelines for employees to follow. Typically, anything from actions to appearance are found in the code of conduct.

What to include in a code of conduct

Conducts vary from business to business. Although sections may differ, policies usually include behavior expectations consistent with company policies. And, the policy serves as a reminder to employees about what you expect of them.

Be clear and precise when creating a code of conduct for employees. Review common sections in a code of conduct below.

Company values

Company values are your code of conduct’s foundation. Your values say a lot about your business, management, and employees.

As you develop this section, consider questions like, What does my company value most? How do my company values compare with another business’s values? Compile a list of core values that matter most to your business.

Some company values may include:

  • Integrity
  • Diversity
  • Innovation
  • Quality
  • Commitment
  • Teamwork

Respecting others

Your code of conduct policy should explain what constitutes appropriate and inappropriate behavior in the workplace. Interactions between clients, customers, employees, and employers should be respectful. And, behaviors must align with company values and policies.

Clarify what your company considers appropriate versus inappropriate behavior. Good behavior might include actions like openly communicating, working together as a team, and respecting everyone’s opinions.

Include what you consider unethical or inappropriate behavior. Inappropriate actions might consist of being violent, yelling at colleagues, and making offensive comments or jokes.

Reporting misconduct

At some point, you may hire an employee who breaks the code of conduct.

You or one of your employees may observe an individual violating the code of conduct guidelines. Clarify what employees must do if they witness misconduct. Include how an employee should report a violation. Do you have an open-door policy? Is the reporting process anonymous?

Violations and discipline

When an employee violates the code of conduct, you must include the type of discipline they receive.

Before taking action, decide what measures to take as an employer. Does your company use a zero-tolerance approach? Will internal investigations take place? Lay out the procedures and methods in your code of conduct.

Clarify what happens to an employee when they break the ethical code of conduct. Consider including tiers of discipline.

For example, you may give an employee a warning for their first violation. But if the same employee breaks the policy three times, you might take more intense disciplinary actions (e.g., employee termination).

Importance of code of conduct

Employees are the face of your business. Stating your expectations shows employees how they must act and represent your company. An effective code of conduct can result in a better business reputation.

Some employers may choose to have employees sign the code of conduct. If an employee signs the document, a code of conduct can become an important legal document and tool. Consider having a small business lawyer or professional review your code of conduct before implementation.

After you create your code of conduct, you need a way to store and distribute it to employees. Patriot’s HR software lets you upload documents that you can share with employees. And, the software integrates with Patriot’s online payroll. Try both for free today!

This article has been updated from its original publication date of March 18, 2019.

This is not intended as legal advice; for more information, please click here.

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