Ethics implies to the unity of moral principles and values that govern the behavior of specific societies, groups, or individuals.
Business ethics refers to leading a company’s activities in compliance with ethical principles and moral values. In other words, distinguishing between wrong and right, it leads to acting correctly.
In the context of business activity, “right” and “wrong” imply to morally right and wrong, unlike from right or wrong in commercial or financial points of view. Business ethics concerns all aspects of business activity, starting from the behavior of each employee, including the activity of the entire organization.
Business ethics is tightly related to corporate social responsibility. Initially, many issues of CSR were viewed as the area of business ethics. However, at present, business ethics is one of the components of corporate social responsibility. While CSR is more related to responsibly managing the company’s activities and its social and environmental impacts, business ethics includes the moral principles and standards that guide the behavior of the company and its employees.
The core and universally recognized principles of business ethics are:
A company’s ethics principles and values are usually formulated in its Ethics Code and Code of Conduct.
Ethics Code sets general moral principles, visions and values that the company is based on, while the Code of Conduct stipulates practical rules and guidelines on the introduction of these principles and values into its day-to-day activities.
Companies might have two separate documents for its Ethics Code and the Code of Conduct, or both codes can be integrated into one document that will specify ethical values and principles, as well as behavior rules and bans.
To ensure that the principles, values, and rules of conduct do not remain only as good will, it is important for the company to have a well-documented and effective system of monitoring and evaluation of compliance of its activities with its own ethical values/principles. The company should also have organizational units and individuals responsible for implementing and monitoring Ethics Code and Code of Conduct. Building a good mechanism to provide information on the company’s Ethics Code to the internal and external Stakeholders is also important.