An ethical code is an attempt to assist those who are in the organization understand the difference between ‘right’ and ‘wrong’ and to apply this understanding to their decision.
The ethical code therefore generally implies documents at three levels:
A code of ethics (corporate or business ethics) often focuses on social issues. It may set out general principles about an organization’s beliefs on matters.
Code of conduct (employee ethics) is a document designed to influence the behavior of employees. They set out the procedures to be used in specific ethical situations and delineate the procedures to determine whether a violation of the code of ethics occurred and, if so, what remedies should be imposed. The effectiveness of such codes of ethics depends on the extent to which management supports them with sanctions and rewards.
Code of practice (professional ethics) is adopted by a profession or by a governmental or non-governmental organization to regulate that profession. A code of practice may be styled as a code of professional responsibility, which will discuss difficult issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is considered “ethical” or “correct” or “right” in the circumstances. In a membership context, failure to comply with a code of practice can result in expulsion from the professional organization.
Most professions have internally enforced codes of practice that members of the profession must follow, to prevent exploitation of the client and preserve the integrity of the profession. This is not only to the benefit of the client but to the benefit of those belonging to the profession. It also maintains the public’s trust in the profession, meaning that the public will continue to seek their services.