What Is an Ethical Code of Conduct? The System Behind Ethical Behavior in Business & Healthcare

If you ask ten leaders what an ethical code of conduct is, you’ll get ten slightly different answers. Each confident, each likely incomplete.

Some will say it’s “the rules employees must follow.” Others will call it “our organization’s values in writing.” Healthcare leaders might think of patient rights, confidentiality, and clinical judgment.
Professional services might think of independence, conflicts of interest, or client trust.

They’re all right…and all missing something.

An ethical code of conduct is also a behaviour system. It’s the invisible contract that shapes how people make decisions, especially when nobody is watching.

This guide breaks it all down clearly, including definitions, examples, industry specifics, implementation steps, sample clauses, and how to make your code more than just “words on paper.”

What Is an Ethical Code of Conduct? 

An ethical code of conduct is a formal set of rules, standards, and expectations that guide how individuals should behave within an organisation or profession. It defines acceptable and unacceptable behaviour, supports ethical decision-making, and helps align everyday actions with organisational or professional values.

In simple terms:

• It tells people how to act
• While a code of ethics tells people what to believe.

Both matter. Both shape culture. And most organizations need both.

An ethical code of conduct typically includes guidelines on:

• Professional behavior
• Conflicts of interest
• Confidentiality
• Respect and dignity
• Responsible use of company resources
• Anti-bribery and corruption
• Compliance with laws and regulations
• Reporting mechanisms (e.g., whistleblowing hotlines like FaceUp)

It protects employees, patients, clients, stakeholders, and the organization itself.

Code of Conduct vs Code of Ethics: What’s the Difference?

Confusion around this is one of the biggest pain points compliance and HR leaders face. Here’s the clearest explanation:

In reality, many organizations combine both into a Code of Business Conduct and Ethics, especially in business settings where clarity matters.

If you’re looking for concrete examples, our guide on the employer code of conduct is a great place to start.

Why an Ethical Code of Conduct Matters in the Workplace

A clear, well-documented ethical code of conduct is the foundation of how an organization behaves, protects its people, and earns trust. 

Your code shapes daily decisions, supports accountability, and creates an environment where people know what’s expected of them. Here’s why it matters:

• It protects the organization legally: A well-crafted code aligned with relevant laws reduces risk, strengthens compliance programs, and helps defend decisions in regulatory audits.
• It sets expectations clearly: People want clarity. Codes eliminate ambiguity, especially important for new hires, rotating clinical staff, distributed teams, and high-risk functions.
• It strengthens culture: A strong code builds trust, credibility, and consistency across teams.
• It guides ethical decision-making: When employees face ethical dilemmas, the code becomes a practical decision-support tool.
• It enables speak-up culture: Paired with a reporting channel like FaceUp, it empowers employees to raise concerns safely.
• It improves stakeholder trust: Stakeholders, including customers, patients, regulators, and business partners, trust organizations with clear, enforced ethical standards.

But even the strongest code depends on how leaders bring it to life. For a deeper look at how leadership shapes ethical behavior, see our guide on ethical leadership.

Types of Ethical Codes of Conduct Across Industries

Ethical codes of conduct vary across industries, reflecting the specific responsibilities, risks, and standards professionals face. While the principles of integrity, transparency, and accountability remain universal, each sector tailors its rules to address its unique challenges and expectations.

1. Business: Code of Business Conduct and Ethics

Typical focus areas:

• Conflicts of interest at work
• Workplace behavior
• Anti-bribery and corruption
• Transparency and accuracy in financial reporting
• Data privacy
• Responsible procurement
• Sustainability and ESG
• Respectful communication (including on social media)
• Use of company assets

Business codes often combine values and rules into a single comprehensive document.

2. Healthcare: Nurses’ Ethical Code of Conduct & Medical Codes

The nurses’ ethical code of conduct and medical ethics code of conduct focus on highly sensitive areas:

• Patient dignity and rights
• Confidentiality and informed consent
• Non-maleficence (“do no harm”)
• Accuracy in documentation
• Professional boundaries
• Ethical triage decision-making
• Duty to report unsafe practices
• Culturally competent care
• Clinical integrity

These aren’t optional. They’re tied to licensing, national laws, and professional standards.

3. Professional Services & Regulated Professions

Lawyers, auditors, consultants, financial advisers, engineers, and accountants all operate under professional codes of conduct that emphasize:

• Independence and objectivity
• Confidentiality
• Avoidance of conflicts of interest
• Professional competence
• Duty of care to clients
• Transparency
• Integrity in reporting
• Compliance with professional standards
• Accountability

How to Design an Ethical Code of Conduct 

Many organizations struggle here, not knowing where to start or how to ensure the code doesn’t become “shelfware.”

Here is a proven approach.

Step 1: Define purpose and scope

Start by clarifying why the code exists and who it covers. Ask:

• Why are we creating or updating this code?
• Who does it apply to?
• What risks or behaviours do we need to address?

For healthcare, add clinical risks. For business, add operational risks. For professional services, add independence and confidentiality.

Step 2: Identify organizational values (or professional principles)

Anchor your code in the core values that guide everyday decisions. These values become the spine of your code.

Step 3: Map risk areas and ethical dilemmas

Highlight situations where employees might face ethical challenges. Involve HR, compliance, legal, frontline staff, and managers.

Common risk areas:

• Misuse of confidential information
• Fraud, corruption, bribery
• Discrimination or harassment
• Social media misuse
• Clinical errors or documentation issues
• Gifts and hospitality
• Conflicts of interest
• Supply chain risks
• Data privacy and cybersecurity
• Inappropriate relationships

Step 4: Create structure and write clear, practical guidance

Translate values into actionable rules and examples everyone can understand. A good code includes:

• A statement of values
• Behavior expectations
• Examples of acceptable vs unacceptable behavior
• Decision-making frameworks
• Reporting channels and protections
• Consequences for violations
• Role-specific guidance (optional but recommended)

Write in plain language. No jargon. No legalese.

Step 5: Include a decision-making tool

Give employees a simple framework to navigate tough choices. Example:

The 5 ethical Principles:

1. Respect
2. Justice
3. Beneficence
4. Non-maleficence
5. Responsibility

Or the simple test:

• Is it legal?
• Is it consistent with our code?
• Would I be comfortable explaining this to a regulator, patient, or journalist?

Step 6: Review with stakeholders

Gather input from all relevant parties to ensure the code is realistic and effective. Stakeholders include:

• Employees
• Managers
• Unions
• Regulatory bodies
• Professional associations
• Patients or customer councils (optional but powerful)

Step 7: Implementation & Training

A code is useless if employees don’t know it exists. Make sure employees know the code exists and understand how to apply it. 

Best practices:

• Onboarding training
• Annual refreshers
• Micro-learning videos
• Scenario-based modules
• Posters and quick-reference guides
• In-person workshops for high-risk departments

Pair the code with real-world examples from your organisation.

Step 8: Enable reporting & accountability

Establish clear channels, protections, and consequences to enforce the code. This includes:

• Anonymous hotlines like FaceUp
• Anti-retaliation statements
• Escalation pathways
• Clear investigation procedures
• Case documentation standards

A code without enforcement is a suggestion. Enforcement creates culture.

Step 9: Measure, evaluate, update

Monitor performance, identify gaps, and refresh the code regularly. Track:

• Number of reports
• Training completion
• Ethical dilemma inquiries
• Policy breaches
• Employee survey results
• Root causes of incidents
• Audit findings

Update the code every 1–3 years, or after major regulatory changes.

Examples of Effective Ethical Codes of Conduct

Ethical codes work best when they reflect real-world challenges. Here are some concrete examples across industries:

Example 1: Business

A construction company includes a “Stop Work” authority clause empowering workers to halt operations if safety or ethical concerns arise.

Example 2: Healthcare

A hospital’s nursing code mandates double-check procedures for high-risk medications and includes a duty to escalate unsafe practices.

Example 3: Professional Services

An accounting firm requires partners to document all independence assessments for new client engagements.

Example 4: Poor Practice

A company publishes a code but never trains employees, never updates it, and has no reporting channel. It exists only for audits, not for culture.

How to Ensure the Code Becomes Part of Culture

Creating a code is just the start. Culture embedding into daily behavior is the hardest part, and requires deliberate, consistent action. Here’s what truly works:

• Leaders reference the code when making decisions.
• Managers use scenarios during team meetings.
• Ethical issues are treated seriously, not defensively.
• Speak-up reports are acknowledged and acted upon (using channels like FaceUp can help ensure anonymity and follow-up).
• Policies are consistent with the code.
• Ethical behaviour is recognised, not just enforced.
• Misconduct is addressed quickly and transparently.
• Employees see consequences for violations and equally, at all levels.

Ethical Codes Are Living Systems, Not Static Documents

Ethical codes of conduct are culture-defining assets, shaping how people act when pressure rises, when nobody is watching, and when decisions feel complex.

Whether you’re in business, healthcare, or a professional field, your code is only as strong as your communication, enforcement, and commitment to it.

If you want to strengthen your ethical culture, and provide employees with a secure, accessible place to speak up, FaceUp can help.

Book a demo and see how anonymous reporting brings your code of conduct to life.