Code of conduct
Code of conduct or what is popularly known as Code of Business Conduct contains standards of business conduct that must guide actions of the Board and senior management of the Company.
The Code may include the following:
(b) Avoidance of conflict of interest.
(c) Accurate and timely disclosure in reports and documents that the company files before
Government agencies, as well as in Company's other communications.
(d) Compliance of applicable laws, rules and regulations including Insider Trading Regulations.
(e) Maintaining confidentiality of Company affairs.
(f) Non-competition with Company and maintaining fair dealings with the
(g) Standards of business conduct for Company's customers, communities, suppliers, shareholders, competitors, employees.
(h) Prohibition of Directors and senior management from taking corporate opportunities for
themselves or their families.
(i) Review of the adequacy of the Code annually by the Board.
(j)No authority of waiver of the Code for anyone should be given.
The Code of Conduct for each Company summarises its philosophy of doing business.
Although the exact details of this code are a matter of discretion, the following principles have been found to occur in most of the companies:
— Use of company's assets;
— Avoidance of actions involving conflict of interest;
— Avoidance of compromising on commercial relationship;
— Avoidance of unlawful agreements;
— Avoidance of offering or receiving monetary or other inducements;
— Maintenance of confidentiality;
— Collection of information from legitimate sources only.
— Safety at workplace
— Maintaining and Managing Records
— Free and Fair competition
— Disciplinary actions
To create a code of ethics, an organization must define its most important guiding values, formulate behavioral standards to illustrate the application of those values to the roles and responsibilities of the persons affected, review the existing procedures for guidance and direction as to how those values and standards are typically applied, and establish the systems and processes to ensure that the code is implemented and effective. Codes of ethics are not easily created from boilerplate. Ideally, the development of a code will be a process in which Boards and senior management actively debate and decide core values, roles, responsibilities, expectations, and behavioral standards.
Model Code of Business Conduct & Ethics
Commitment to ethical professional conduct is a MUST for every employee of the company in all of its businesses/units/subsidiaries. This code, consisting of imperatives formulated as statements of personal responsibility, identifies the elements of such a commitment. It contains many, but not all issues, employees are likely to face.
The code is intended to serve as a basis for ethical decision- making in the conduct of professional work. It may also serve as a basis for judging the merit of a formal complaint pertaining to violation of professional ethical standards.
It is understood that some words and phrases in a code of ethics and conduct document are subject to varying interpretations and that any ethical principle may conflict with other ethical principles in specific situations. Questions related to ethical conflicts can best be answered by thoughtful consideration of fundamental principles rather than reliance on detailed regulations. In case of conflict, the decision of the Board shall be final.
This code is applicable to the Board Members and all employees in and above Officers level (hereinafter collectively referred to as "Employee(s)").
All employees must read and understand this code and ensure to abide by it in their day-to-day activities.
General Moral Imperatives
Contribute to society and human well being
This principle concerning the quality of life of all people, affirms an obligation to protect fundamental human rights and to respect the diversity of all cultures. We must attempt to ensure that the products of our efforts will be used in socially responsible ways, will meet social needs and will avoid harmful effects to health and welfare of others. In addition to a safe social environment, human well-being includes a safe natural environment. Therefore, all of us who are accountable for the design, development, manufacture and promotion of company's products, must be alert to, and make others aware of, any potentia l damage to the local or global environment.
Avoid harm to others
"Harm" means injury or negative consequences, such as loss of property, property damage or unwanted health and environmental impacts. This principle prohibits use of men, material and technology in ways that result in harm to our consumers, employees and the general public. Well-intended actions, including those that accomplish assigned duties, may lead to harm unexpectedly. In suc h a n eve nt, the respons ib le person or persons are obligated to undo or mitigate the negative consequences as much as possible.
Be honest and trustworthy
Honesty is an essential component of trust. Without trust an organization cannot function effectively. All of us are expected not to make deliberately false or deceptive claims about our products/systems, but instead provide full disclosure of all pertinent limitations and problems.
Be fair and take action not to discriminate
The va lues of equality, tolerance, respect for others, and the princip les of equal justice govern this imperative. Discrimination on the basis of race, sex, religion, age, disability, national origin, or other such factors is an explicit violation of this code.
Practice integrity in our inter-personal relationships
In our relationships with colleagues, we should treat them with respect and in good faith. In the same way we ourselves would expect them to treat us. The principle to be adopted to guard against loose talk or in its worst form-character assassination is not to say anything behind one's back and never utter something, which cannot be put in writing.
The principle of honesty extends to issues of confidentiality of information. The ethical concern is to respect all obligations of confidentiality to all stakeholders unless discharged from such obligations by requirements of the law or other principles of this code.We therefore, will maintain the confidentiality of all material non-public information about company's business and affairs.
Live the Company's Values-each day.
We must live the Company's Values-each day. For quick reference our core values are:
This is our company. We accept personal responsibility and accountability to meet business needs.
v Passion for winning
We all are leaders in our area of responsibility with a deep commitment to deliver results. We are determined to be the best at doing what matters most.
v Passion deveopment
People are our most important asset. We add value through result driven training and we encourage & reward excellence.
v Consumer focus
We have superior understanding of consumer needs and develop products to fulfill them better.
We work together on the principle of mutual trust and transparency in a boundary less organization. We are intellectually honest in advocating proposals, including recognizing risks.
Continuous innovation in products and process is the basis of our success.
We are committed to the achievement of business success with integrity. We are honest with consumers, business partners and each other.
Strive to achieve the highest quality, effectiveness and dignity in both the processes and products of professional work
Excellence is perhaps the most important obligation of a professional. We must strive to achieve t he highest quality, effectiveness and dignity in all that we are responsible for each day.
Acquire and maintain professional competence
Excellence depends on ind ividua ls who take responsib ility for acquir ing and ma inta ining professional competence. We must participate in setting standards for appropriate levels of competence, and strive to achieve those standards.
Know and respect existing laws
We must obey existing local, state, national, and international laws unless there is a compelling ethical basis not to do so. We should also obey the policies, procedures, rules and regulations of the company. Violation of a law or regulation may be ethical when that law or rule has inadequate moral basis or when it conflicts with another law judged to be more important. If one decides to violate a law or rule because it is viewed as unethical, or for any other reason, one must fully accept responsib ility for one's actions and for the consequences.
Accept and provide appropriate professional review
Quality professional work depends on professional reviewing and critiquing. Whenever appropriate, individual members should seek and utilize peer review as we ll as provide critical review of the work of theirs.
Manage personnel and resources to enhance the equality of working life
Organizational leaders are responsible for ensuring that a conductive environment is created for fellow employees to enable them delivering their best. We all, therefore, are responsible for ensuring human dignity of all our colleagues, ensuring their personal and professional development and enhancing the quality of working life.
Deal with the Media tactfully
We should guard against being misquoted and finding ourselves compromised. Our role as individuals is always to be tactful and to avoid comment and to pass enquiries to those who are authorized to respond to them.
Be upright and avoid any inducements
Neither directly nor through family and other connections indirectly, should we solic it any personal fee, commission or other form of remuneration arising out of transactions involving Company. This includes gifts or other benefits of significant value, which might be extended at times, to influence business-especially during bulk purchase of commodities for the organization or awarding a contract to an agency etc. We are likely to be offered various gifts by vendors/parties/agencies and people associated with Company under different wraps or generally on personal celebrations or functions or religious festivals etc.
Our flow of communication is not rigid and people are free to express themselves at all levels. However, this informality should not be misunderstood. What it means is that though there is a free exchange of opinions in the process of arriving at a decision, but after the debate is over and a policy consensus has been established, all are expected to adhere and abide by it, even when in certain instances we may not agree with it individually. In some cases policies act as a guide to action, in others they are designed to put a constraint on action. We all must learn to recognise the difference and appreciate why we need to observe them.
Conduct ourselves in a manner that reflects credit to the Company
All of us are expected to conduct ourselves, both on and off-duty, in a manner that reflects credit to the company. The sum total of our personal attitude and behaviour has a bearing on the standing of Company and the way in which it is perceived within the organization and by the public at large.
Be accountable to our stakeholders
All of those whom we serve, be it our customers, without whom we will not be in business, our shareholders, who have an important stake in our business and the employees, who have a vested interest in making it all happen- are our stakeholders. And we must keep in mind at all times that we are accountable to our stakeholders.
"Inside information" gained from the Company or otherwise must not be used for personal gains. We undertake to comply with the Company's Code of Conduct for Prevention of Insider Trading.
Identify, mitigate and manage business risks
It is our responsibility to follow our institutionalized Company's Risk Management Framework to identify the business risks that surround our function or area of operation and to assist in the company-wide process of ma naging suc h r isks, so that Company may achie ve its wider business objectives. All of us should continuously ask ourselves "What can go wrong and what am I doing to prevent it from going wrong."
Protect Company's properties
We all are perceived as Trustees of Company's properties, funds and other assets. We owe fiduciary duty to each stakeholder, as their agent, for protecting the Company's assets. We, therefore, must safeguard and protect the Company's assets against any misappropriation, loss, damage, theft, etc. by putting in place proper internal control systems and procedures and effectively insuring the same against any probable fire, burglary, fidelity and any other risk.
Compliance with the Code
As employees of Company, we will upheld and promote the principles of this code
The future of the organization depends on both technical and ethical excellence. Not only is it important for employees to adhere to the principles expressed in this Code, each employee should encourage and support adherence by other employees.
Treat violations of this code as inconsistent association with the organization
Adherence of professionals to a code of ethics is largely a voluntary matter. However, if any of us do not follow this code by engaging in process misconduct, the matter would be reviewed by
the Board and its decis ion sha ll be fina l. The Company reserves the right to take appropriate action against the guilty employee.
Continual updation of code
This code is subject to continuous review and updation in line with any c hanges in law, changes in company's philosophy, vision, business plans or otherwise as may be deemed necessary by the board.
Most Companies skip the important part of developing the company's cre do. A good credo
gives the company a reason to exist; it develops the spirit of employees motivating them at all times. It is a statement of common values that allows employees to understand the importance of
the stakeholders and services provided. It is the force which makes them work together to achieve a consistent high standard.
Sam Walton, founder of Wal-Mart, established the "Three Basic Beliefs" as his company's credo. These are:
- Respect for the Individual
- Service to our Customers
- Strive for Excellence
Johnson & Johnson
The overarching philosophy that guides business in Johnson & Johnson is their Credo termed as 'Our Credo', a deeply held set of values that has served as the strategic and moral compass for
generations of Johnson & Johnson leaders and employees.
The Credo challenges Johnson & Johnson to put the needs and well- being of the people we serve first. It also speaks to the responsibilities it has to its employees, to the communities in which the
company lives and works and the world community, and to its shareholders. Johnson and Johnson believes that its Credo is a blueprint for long-term growth and sustainability that's as relevant today as when it was written.
Credo of SAIL talks about stakeholder respect, and ethical practices to be followed in the company:
We build lasting relationships with customers based on trust and mutual benefit. We up hold highest ethical standards in conduct of our business.
We create and nurture a culture that supports flexibility, learning and is proactive to change.
We chart a challenging career for employees with opportunities for advancement and rewards.
We value the opportunity and responsibility to make a meaningful difference in people's lives.
Mr. X sends a report of the training as soon as he returns. His reporting officer summons him and asks him where he was during the training. At first, Mr. X re acts in a defensive manner that he was at the training. The reporting officer then tells him that the organization in order to extend the training to other employees had got in touch with the programme organizers requesting them for a one to one meeting with Mr. X already present and were informed of the absence. When confronted with this, Mr. X had to admit that he had not attended the training programme.
Ethics in Marketing
Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. The issue of marketing ethics is not limited to the kind of products alone. It also deals with how such products are delivered to the customers. The ethical
issues confronted in this area include:
— Pricing: price fixing, price discrimination, price skimming.
— Anti- competitive practices like manipulation of supply, exclus ive dealing arrangements, tying arrangements etc.
— Misleading advertisements.
— Contents of advertisements.
— Use of decision
— Children and marketing.
— Surrogate advertising: Many liquor firms carry advertisements of products like apple juice, soda water etc.
— Black markets, grey markets.
Ethics in Production
This area of business ethics deals with the duties of a company to ensure that products and
production processes do not cause harm. Some of the more acute dilemmas in this area arise out of the fact that there is usually a degree of danger in any product or production process and it is difficult to define a degree of permissibility, or the degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk.
— Defective, addictive and inherently dangerous products and
—Ethical relations between the company and the environment include pollution, environmental ethics, carbon emissions trading — Ethical problems arising out of new technologies for eg. Genetically modified food — Product testing ethics.
The most systematic approach to fostering ethical behavior is to build corporate cultures that link ethical standards and business practices.
More and more co mpanies reco gnize the link between bus iness ethics a nd fina nc ia l perfor mance. Companies displaying a "clear commitment to ethical conduct" consistently outperform companies that do not display ethical conduct.
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