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  • December 2005
  • Article
  • Harvard Business Review

Up to Code: Does Your Company's Conduct Meet World-Class Standards?

By: Lynn Paine, Rohit Deshpandé, Joshua D. Margolis and Kim Eric Bettcher
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Abstract

Codes of conduct have long been a feature of corporate life. Today, they are arguably a legal necessity—at least for public companies with a presence in the United States. But the issue goes beyond U.S. legal and regulatory requirements. Sparked by corruption and excess of various types, dozens of industry, government, investor, and multisector groups worldwide have proposed codes and guidelines to govern corporate behavior. These initiatives reflect an increasingly global debate on the nature of corporate legitimacy. Given the legal, organizational, reputational, and strategic considerations, few companies will want to be without a code. But what should it say? Apart from a handful of essentials spelled out in Sarbanes-Oxley regulations and NYSE rules, authoritative guidance is sorely lacking. In search of some reference points for managers, the authors undertook a systematic analysis of a select group of codes. In this article, they present their findings in the form of a "codex," a reference source on code content. The Global Business Standards Codex contains a set of overarching principles as well as a set of conduct standards for putting those principles into practice. The GBS Codex is not intended to be adopted as is, but is meant to be used as a benchmark by those wishing to create their own world-class code. The provisions of the codex must be customized to a company's specific business and situation; individual companies' codes will include their own distinctive elements as well. What the codex provides is a starting point grounded in ethical fundamentals and aligned with an emerging global consensus on basic standards of corporate behavior.

Keywords

Business Ethics; Standards Of Conduct; Globalized Firms and Management; Cross-Cultural and Cross-Border Issues; Values and Beliefs; Corporate Accountability; Corporate Governance

Citation

Paine, Lynn, Rohit Deshpandé, Joshua D. Margolis, and Kim Eric Bettcher. "Up to Code: Does Your Company's Conduct Meet World-Class Standards?" Harvard Business Review 83, no. 12 (December 2005): 122–133.
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About The Authors

Lynn S. Paine

General Management
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Rohit Deshpande

Marketing
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Joshua D. Margolis

Organizational Behavior
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    4 Business Ideas That Changed the World: Shareholder Value

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    Arts and Cultural Entrepreneurship

    By: Rohit Deshpandé
More from the Authors
  • Brief Note on Staggered Boards By: Lynn S. Paine and Will Hurwitz
  • 4 Business Ideas That Changed the World: Shareholder Value By: Adi Ignatius, Lynn Paine, Mihir Desai and Carola Frydman
  • Arts and Cultural Entrepreneurship By: Rohit Deshpandé
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