Having an ethical code is a way in which a business can gain a competitive advantage in an honest and fair manner.  The need for managerial skills in handling ethical questions is enormous and it begins with the willingness of top management to make ethics a part of its strategic planning programme.  In this way, ethics will be embedded in the vision and mission statement of the business.

The aim of the ethical code is to:

• Discourage management and employees from acting unethically
• Prevent the authorities (the State) from having to intervene by passing laws, ordinances, or regulations
• Communicate the intentions of the enterprise to all stakeholders

The following principles may be considered when drawing up an ethical code for an organisation:

• The Golden Rule is universally acceptable: This rule states “Do unto others as you would have them do unto you”. This provides for more than ample grounds for a generally accepted, fair and justifiable ethical practice.  Management must also allow for individuals with religious convictions to contribute to the drawing up of an ethical code.
• Confidentiality: Confidentiality may be viewed as a uniquely professional work related or role based ethical principle. For example, a clear indication must be given of how disclosure (whistle blowing) should be affected.
• Equal opportunities: An indication must be given of the stance taken about discrimination. This will therefore deal with race, colour, religion, gender and similar issues.
• Development: The code must explain the policy to be followed in respect of the development of personnel (and of other individuals in the community). More specifically, the way in which training in ethical skills will be affected, must be explained.
• The environment: The business should specify its commitment to the environment and sustainable business practices and adopt a clear stance on the way environmental problems will be dealt with.
• Honesty: The ethical code must stipulate that the business will always expect management and employees to behave honestly, irrespective of the consequences. This also includes accurate reporting of financial details (as contained in the annual statements).
• Regulatory: The code must be regulatory. There should be distinctions between clauses that represent ideals and those that stipulate punitive measures.
• Public interest: The code must serve the interests of the public. A code, serving only the interests of the business but not the interests of the community, has a slim chance of succeeding.
• Honest advice and guidance: The code must entrench the rights of employees, as part of the business, to honest advice and guidance in their development. The business must undertake to obtain outside assistance if management is incompetent or unable to handle certain problems satisfactorily on its own.
• Dignity: Irrespective of the conditions, the dignity of people must be respected.
• Fair transactions: The business must clearly indicate what practices are considered fair, and which undesirable.
• Social responsibility: In the ethical code, the business must explain that maximising profits at all costs is not its sole aim, and that business should preferably be conducted in such a way that the community also benefits from profits.
• Professional behaviour: According to this principle, the business expects that all its members will respect the professional codes of conduct of the activities in which they become involved. If the enterprise participates in the organised world of business, the codes of relevant professional institutions must be honoured.
• Integrity: Members of the enterprise must, always, act in accordance with the ethical code of business. Where a conflict of interest does arise, a solution, which will in no way affect or harm the ethical code, must be sought through consultation and negotiation.