20 Dec What are companies’ codes of ethics?
What are companies’ codes of ethics?
Companies’ codes of ethics, also known as codes of conduct, are internal documents that set out the principles, values and standards of behaviour that should guide the actions of an organisation and of all the people who relate to it. They are a key tool for promoting a responsible corporate culture, preventing conflicts, and strengthening both internal and external trust.
From the perspective of mediation, conciliation and conflict prevention, codes of ethics are not merely a formal requirement or a matter of regulatory compliance, but rather a strategic instrument for improving labour, commercial and institutional relationships.
What are corporate codes of ethics for?
A well-designed code of ethics fulfils multiple functions:
- It defines acceptable and unacceptable behaviour within the company.
- It prevents internal and external conflicts by establishing clear rules from the outset.
- It reduces the risks of fraud, corruption, harassment or discrimination.
- It facilitates ethical decision-making in complex situations.
- It strengthens corporate reputation and the trust of clients and suppliers.
- It contributes to compliance with obligations relating to compliance and good governance.
What does compliance mean?
Compliance refers to the set of procedures and good practices adopted by companies to prevent, detect and manage legal and ethical risks, ensuring compliance with applicable regulations, internal commitments and corporate values. Proper implementation helps to reduce conflicts, liabilities and sanctions, and fits fully within a preventive, dialogue-based culture.
In practice, many situations that end up in labour, commercial or reputational conflicts could have been avoided with a clear, well-known and effectively applied code of ethics.
What does a company code of ethics usually include?
Although each organisation must adapt it to its own reality, most codes of ethics include:
- Corporate values and principles
Integrity, transparency, respect, social responsibility, legality and good faith are usually the core pillars.
- Internal standards of conduct
- Employment relationships based on respect and cooperation.
- Equal treatment, diversity and non-discrimination.
- Prevention of workplace and sexual harassment.
- Responsible use of company resources.
- Conflicts of interest
Clear guidelines to identify, disclose and manage situations in which personal interests may conflict with those of the company.
- Confidential information and data protection
Confidentiality obligations and proper use of sensitive information.
- External relations
Ethical criteria governing relationships with clients, suppliers, public administrations and other third parties.
- Internal communication and incident management channels
Mechanisms to:
- Raise ethical queries.
- Report potential breaches.
- Manage disagreements before they escalate into open conflicts.
Who do codes of ethics apply to?
Codes of ethics usually apply to:
- Senior management and employees.
- External collaborators.
- Suppliers and business partners.
It is increasingly common for companies to require the express acceptance of the code of ethics as a condition for initiating or maintaining a contractual relationship.
What happens if a code of ethics is breached?
Breaching a code of ethics can have significant consequences, both for the individual who commits the breach and for the organisation itself. Although a code of ethics does not always have the status of a legal rule, its violation is not without consequences.
The main consequences include:
- Internal disciplinary measures, ranging from a warning or sanction to termination of the employment relationship, depending on the seriousness of the breach and the applicable regulations.
- Contractual liability, especially where the code of ethics forms part of contracts with suppliers, collaborators or partners.
- Reputational damage, with a direct impact on the trust of clients, teams and third parties.
- Legal risks, where the conduct contrary to the code also constitutes a breach of laws or regulations.
- Deterioration of the working environment and an increase in internal conflict.
For this reason, an increasing number of companies are opting for dialogue-based mechanisms to manage breaches, prioritising mediation and conciliation over purely punitive responses, wherever the situation allows.
Code of ethics and conflict prevention
Based on experience in mediation and conciliation, the code of ethics is a first-rate preventive tool. When the rules of the game are clear:
- Misunderstandings are reduced.
- Interpersonal conflicts decrease.
- The perception of organisational fairness and coherence increases.
Moreover, a code of ethics may expressly incorporate mediation and conciliation as preferred avenues for managing internal conflicts, thereby avoiding unnecessary disciplinary proceedings or the judicialisation of disputes.
The role of the business mediation expert
Engaging a professional specialised in business conflict mediation provides genuine added value in relation to codes of ethics:
- Advice on the drafting or review of the code of ethics, with a practical and preventive approach.
- Design of conflict management protocols consistent with the company’s values.
- Intervention as a neutral third party in internal conflicts or disputes between the company and third parties.
- Training in communication skills, conflict management and ethical culture.
A code of ethics is only effective if it is integrated into the organisation’s day-to-day reality. Mediation helps turn principles into everyday practices.
Conclusion
Companies’ codes of ethics should not be understood as mere formal documents, but as living tools for conflict prevention, management and resolution. Integrating them with mediation and conciliation mechanisms contributes to the creation of healthier, more sustainable organisations that are aligned with the values they proclaim.
If your company needs support in this area, engaging an external specialised professional can make a real difference.
Professional contact
Daniel Sererols Villalón
📞 Tel. 661.463.306
📧 daniel@mediadorconflictos.com