The article discusses the origins of ethical codes in America as emerging from the corporate scandals and corruption cases which seemed to plague the country following Nixon’s resignation from the presidency. The author describes the general content of early ethical codes and how they were regarded as creeds or credos and often focused on issues like affirmative action, featuring ‘legalistic’ language.

Following this ‘establishing’ shot of the development of corporate ethical codes, the author reviews studies of ethical codes from around the world, focusing on issues like ethical code prevalence and the content of such codes; codes which are ineffective and the evidence of same, which should be noted as being quite a lengthy aspect of the article; codes which are effective, briefly examining the circumstances under which they are usually effective; the roles of cultural values and communication in ethical codes; and how to improve the influence and effects of corporate codes. The author concludes with a five-step plan for how managers can effectively utilize ethical codes as strategic organizational tools.

The takeaways from this article are several. First, while earlier codes focused on the preservation of the organization’s reputations as a significant motivating factor for such codes, as well as ‘legalistic’ language, it seems to me that an organization which worries more about its public reputation and less about ethical practices for the sake of being an ethical organization has organizational issues which demand more attention than the creation of a code. Second, the value and relevance of issues like cultural values and communication cannot be underestimated in the creation of a meaningful ethical code.

Third, while managers usually have the role of ‘enforcing’ ethical codes, it seems that an organization which adopts a code and which encourages all its stakeholders to own that code – from management to rank-and-file employees to investors and beyond – will have more success and reap more benefits from that code.