Cracking the code

The term "code of conduct" immediately conjures up something to do with Boy Scouts. Unfortunately, it is because companies have found that not all their employees are Boy Scouts that they have had to start introducing such codes.

People have always had their own codes. For one person, taking a company pen home amounts to theft, for another making personal phone calls on the firm's time is one of the perks. In practice, most companies do not quibble about such matters - taking action only when staff take to calling Australia regularly or going home with photocopier parts. They are far more concerned with big things, such as bribery, corruption and such a rigid adherence to the profit motive that the long-term health of the organisation is threatened by short-term gain.

As with many other matters of this nature, the US is taking a lead by making adherence to certain rules a condition of securing government contracts; there is talk of Labour, if elected, introducing similar provisions here. But even US companies that operate away from the government are more likely than their British counterparts to have lists of their values.

Perhaps the best known of the handful of company codes of conduct in Britain is that established by National Westminster Bank. It is based on the bank's relationships with its leading stakeholders, covering such issues as customer confidentiality, payment to suppliers and a commitment to sustainable development. There is a section on staff that, besides looking at health and safety, equal opportunities and handling redundancy, warns against using employment at the bank to influence public officials or customers for personal gain.

Backing all this up is a confidential ethics hotline that staff typically - and especially at this time of year - use to inquire about whether they can accept gifts and hospitality. Managers won't say how many calls the hotline receives, but claim it enables most questions to be resolved locally.

The other celebrated code of conduct - which also comes with a hotline - is at Lucas Aerospace, which took this route after finding that two North American divisions had falsified tests on components supplied to the US Navy. Not surprisingly, it specifically covers bribes, accurate reporting of quality data and conflicts of interest.

Among others are the Co-operative Bank's "ethical policy", which clearly states those entities with which it would and would not do business, and the Dixons Way, which was introduced by Dixons' founder, Stanley Kalms, in the late Eighties as a response to disappointing profits, and which is designed to promote honesty and trust in electronics retailing, a sector not particularly renowned for those qualities.

Mr Drummond, who helped to create the NatWest code, says most organisations already have some kind of ethics code. The problem is that they are generally unwritten and sometimes unsavoury. "The onus is therefore on the company to write its code down and ensure that it is owned and understood by the whole workforce."

RT