Updating Your Code of Conduct: A Step-by-Step Approach

1. Make the case for a new code

The regulatory requirements

One common obstacle many ethics and compliance officers face is convincing leadership that a new code should be a priority. When making the case, don’t assume that leadership fully appreciates the current compliance and regulatory landscape. For example, the U.S. Federal Sentencing Guidelines established the basic requirements for an effective ethics and compliance program, including the need for a risk-based code, consistent with industry practices – this can be used when making the case for a comprehensive and modern code of conduct.  

Codes are universally required because they are considered the foundational document for any company’s ethics and compliance program. Done well, a code of conduct: 

• Communicates expected behaviors for employees and points the way to additional resources when situations are complex, difficult or sensitive 
• Reduces legal liability by addressing the company’s key ethics and compliance risks 
• Represents the company’s commitment to integrity to external constituents including business partners and regulators

Requirements from potential business partners

The last point noted above is critical, and especially important when making the case to senior leadership. Increasingly, as part of due diligence, bidding and procurement processes, organizations are required to demonstrate that they have an ethics and compliance program and, first and foremost, to share their code. In these cases, the expectation is that the supplier or vendor code will at least be comparable to industry norms, though in some cases, the bar is higher. 

The value of an independent appraisal or benchmarking

If your code is outdated or you believe it is otherwise deficient, demonstrating how your code compares to industry and best practice norms can be an effective way to build a case that a new code is needed. It is also an excellent way to determine where you stand and how much work is needed to improve your code of conduct document. 

Budget and resource questions

When making the case to senior leadership, it’s often best to tackle the budget issue head on. While your code can be developed entirely using in-house resources, many ethics and compliance officers are pleasantly surprised to learn that scalable code services can provide everything from editing assistance, to complete drafting and design. 

The scalable options are not only budget-friendly, but they also help address concerns about resource allocation. Developing a new code need not be an all-consuming effort that ties up internal resources for weeks or months. Our experience has shown that allowing customers to select from a menu of scalable code services complements their existing personnel and adds expertise when needed. 

2. Assemble your team

Don’t rush the prep work. There’s nothing more discouraging than being two months into the code development process only to discover that a key decision-maker disagrees with the overall approach or tone. Get consensus from the start. 

3. Determine code content with a risk and gap assessment

Once your team is assembled and before drafting begins, the next step is to determine the scope of your code’s content. You can certainly begin with the content of your current code and other relevant documented results of the benchmarking you’ve completed. But it’s also important at this stage to step back and review your organization’s ethics and compliance risk areas. In effect, this step in the code development process is equivalent to an ethics and compliance risk and gap assessment. Your new code should not only include topics you’ve covered in the past, but it should also identify emerging risk areas and any gaps that need to be better addressed by the code, policies, training and oversight. 

4. Select a writing style and design that reflects your culture and priorities

Once you have agreement on content, the next step is to select an overall architecture or structure. Develop a sample table of contents and decide if your topics will be grouped by stakeholders, your values or by topic area. 

Consider the sequence of topics within your code? The order of topics matters. Ask yourself, “what will employees think if ‘Respect for Employees’ looks like an afterthought at the back of the code?” And remember, the goal is to create an organizational structure and a sequence of topics that are intuitive and make information easy to find. 

Another critical step in any code development project is the design phase. Thinking about the design of your code from the point of view of the user. It should not only provide links to policies, but also engage the user with video, micro learnings, and infographics – all within a simplified interface. 

This approach can transform codes into a tool for awareness and training that is actually used by the employee when they have a question – which is when they are most open to learning. This saves valuable time for employees and management in the long run. 

5. Draft the code and manage the review process

As you begin drafting, set realistic expectations. From start to finish, developing a new code can take anywhere from six weeks to six months. The difference is almost entirely due to how well the review and editing process is handled. You know your organization –plan enough time for key leaders and subject matter experts to review drafts and provide feedback. Create a timeline, identify in advance all those who will need to be involved without allowing the process to become unwieldy or an exercise in endless second-guessing and word-smithing. 

6. Make the most of the code launch

At the outset of your code development project, it’s a good idea to think ahead and determine how best to launch your new code. You may already be thinking about a coordinated awareness and communications campaign with posters and emails, or about developing a new training program to coincide with the release of the code. Those are good first steps, but consider going further and developing an overarching two-year communications and training plan that includes tie-ins to the new code.  

It’s less likely that the code will be forgotten and left on the proverbial shelf if it is continually incorporated into training. For example, if you conduct live training, managers or trainers should be encouraged to refer to specific pages and passages in the code whenever they make a point about company policies. 

Branding the ethics and compliance office/programs with a specific look and feel, as well as using that branding in the code’s design and as a template for presentations, will also help reinforce messages. 

Remember to include third parties in your rollout

It’s likely that you’ve included a statement in your new code explaining that third parties are expected to abide by the spirit of the code, to have in place their own comparable standards and policies and are expected to meet all contractual obligations. In addition, you may have included an explanation of specific responsibilities for managers to help ensure that third parties understand their responsibilities and are held accountable. 

At NAVEX, we always rely on the insights we gain from research and our continuous discussions with our 13,000+ customers. We will continue to provide thought leadership, facilitate open dialogue and encourage best practice sharing on codes of conduct and other governance, ethics and compliance topics. We know that the best insights and the most valuable advice come from conversations with our clients.