Image of letters saying: Code of ethics.

Building Trust: How Business Ethics Can Transform Your Organization

What drives your business forward? Successful companies, B Corps, and non-profits are guided by strong business ethics and social responsibility.

Your ethical responsibilities go beyond your vision, mission, and values. They guide every business decision and influence the behaviour of every person representing your brand.

When you follow a code of ethics, you can build unparalleled trust and brand loyalty. Keep reading to learn how to create your code of ethics and how it can transform your organisation.

What are business ethics?

Your ethics should guide your values, behaviours, and business decisions. They are your “moral compass” that drives everything your business does (including day-to-day administration, product development, sales and marketing, and how you treat people). Some of these ethical guidelines may also be required by law in your area (such as pay transparency and employee treatment).

Your principles may differ from other companies, but usually concerns these 11 characteristics or values:

  1. Compassion
  2. Environmental awareness or sustainability
  3. Fairness
  4. Honesty
  5. Integrity
  6. Law-abiding
  7. Leadership
  8. Loyalty
  9. Respect
  10. Responsibility
  11. Transparency

Your principles may specifically address other values, such as corporate governance, bribery, discrimination, and social responsibility.

For ethical businesses (including non-profits, ESG’s, B Corps), having a solid moral compass is critical to building trust with its stakeholders, including those who use its products or services. Good ethical practices help:

  • Build trust
  • Promote sustainable strategies
  • Encourage mindful profitability
  • Support accountability

Principles for responsible leadership

The actions of responsible leadership team members set the tone for the entire organization. As such, you must practice ethical leadership, good moral character, and abide by the ethics you set out for your organization.

You and other leaders in your organization should live by several ethical guidelines:

  • Beneficence: Act in service of doing good.
  • Respect: For self, the organization, and others
  • Fairness and equality: Ensuring all are treated fairly.
  • Community: Leading a team and rallying a community of supporters internally and externally.

Adopting a top-down approach means that your leaders play a crucial role in representing and championing your code of ethics. This active role fosters a culture of positive, ethical behaviour and contributes to greater company stability and success.

Principles for employees

A code of ethics outlines what you expect of your employees’ behaviour. It helps them use your organisation’s moral compass when doing their jobs and interacting with those outside your company.

When your company staff work with the same moral compass and code of ethics, they work towards the same goals and may see increased success due to this collaboration. These employees are held to a higher standard than companies without a code of ethics. This often produces greater outputs, boosts employee loyalty, and may help you reach your business goals faster.

Principle example: Patagonia
Patagonia is a well-known sustainable apparel business. Its code of ethics includes all levels of its supply chain, not just its staff. The Patagonia code of conduct says, “At Patagonia, we continuously push ourselves to “lead an examined life” and improve social and environmental conditions. We encourage the factories that make our products to do the same.”

Principles in marketing

Are you being ethical and honest in your marketing? Ethics in marketing is about being authentic and truthful in your marketing activities without being intentionally deceitful or pretending to be something you’re not or having specific values you don’t have.

When your marketing is honest, you help build brand trust and loyalty. Learn more about how to ensure your organizations marketing is ethical.

Ethics toward your clients
How do you treat and respect your customers and clients? Ethical treatment of this crucial group will earn you their respect, future business, and potential referrals.

Here are some examples of ethical responsibilities you have towards your clients and customers:

  • Fair and reasonable pricing—Adopt a pricing strategy that aligns with the value you provide to customers and avoids excessive markups.
  • Honouring their privacy – Maintain a business-focused relationship and avoid getting too personal with customers concerning their privacy.
  • Protecting their data—You have an ethical and often legal responsibility to protect employee and customer data (personal information, credit cards, banking information, preferences, past purchase history… etc.).
  • Providing fair value – Your business agrees to have offerings that provide fair value for their investment.

Providing the services or products promised is also an important ethical code. For example, you wouldn’t market a child’s book as kid-appropriate when it contains obscene language or images. It would be ethical to do so.

It comes down to making your customers a promise and keeping it.

Principle example: Fairware

Fairware supplies custom-branded promotional products to businesses around the world. Part of its code of ethics is transparency in its sustainability initiatives. To hold itself accountable to its promises, Fairware publishes a sustainability impact report.

How to create a code of ethics

Here are the eight steps to create your code of ethics. Customize them to suit your organisation:

  1. List your values – List 3-5 core values you believe in
  2. Get input—Ask other leaders and staff what matters most to them and what they feel should be included in your code of ethics.
  3. Assess risks—Where are you vulnerable if your ethics aren’t defined and maintained (such as in discrimination, your reputation, security, and confidentiality)?
  4. Write an ethical decision-making framework: This framework helps you decide what activities are “right” or “wrong” based on your code of ethics.
  5. Understand ethics’ relationship with other business processes: Know how your ethics work with other expectations or legal requirements.
  6. Write your code of ethics: Create a summary of your core ethics, including the decision-making framework and relevant details to ensure the entire team understands and will abide by the code.
  7. Get board approval: If you have a board of directors or internal or external stakeholders, present your code of ethics to them for approval.
  8. Share and act on your code of ethics: Create materials (flyers, handouts, workshops, presentations) to communicate your code of ethics to your staff, volunteers, and other stakeholders, including the general public.

Does Out-Smarts have a code of ethics?

The Out-Smarts Marketing team works with companies that do good in the world. To elevate our level of service to our customers and ourselves, we’ve created the Out-Smarts Marketing Code of Ethics. You can read it online and use it to inspire your own version.

At Out-Smarts, we show our dedication to social good and giving back by being members of Coralus World (a collective of change-makers and organizations making transformational impacts in their communities) and having official Radicle Climate Smart Certification.

We also enjoy working with other businesses that have a solid moral compass of their own. If you’re a business doing good in the world and need help with your website or digital marketing, book a complimentary discovery call to learn more.