The purpose of ethics in business is to direct business professionals to abide by a code of conduct that facilitates and encourages public confidence in their products and services. People often make ethical choices reflexively. In the midst of an ethically sensitive situation is the worst time to think through ethics. These situations are often time pressured, emotional, and complicated. It becomes all too easy to be blindsided by temptation.
The best antidote to ethical lapses is to commit in advance to a set of ethical principles. A Code of Ethics helps defines common standards for making ethically sensitive decisions. Your personal ethical code can be as simple as a few sentences or as long as many pages.
It is mandatory for all members of The Institute to adhere to the Code of Ethics set forth in these principles. And, chapter and committee officers and members are expected to adhere to the requirements established within their respective charters.
Definition - A code of ethics is a set of rules outlining the responsibilities of or proper practices for an individual or organization. In its 2007 International Good Practice Guidance, Defining and Developing an Effective Code of Ethics for Organizations, the International Federation of Accountants provides the following working definition: "Principals, values, standards, or rules of behavior that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations.”
Principles - The Institute’s code of ethics contains five principles or components - integrity, objectivity, confidentiality, professional competency, and tone at the top.
- Integrity - The principle of integrity establishes the expectation of all members of The Institute to be honest and straightforward in all professional activities, dealings with others, and when representing our organization in any public forum. This principle also specifies that our members should not falsify information within their organization or provide misleading or false statement to others.
- Objectivity - The principle of objectivity establishes the expectation of all members of The Institute not to compromise their professional or business judgment because of bias, undue influence of others or conflict of interest. A member may be exposed to such situations and should make every effort to avoid the situation. If there are any known conflict of interest situations, they should be remediated immediately.
- Confidentiality - A member should maintain confidentiality of The Institute's information. A member should not disclose confidential information acquired as a result of professional and business relationships without proper and specific authority unless there is a legal duty to do so.A member should maintain confidentiality disclosed by a prospective employer. And, a member should maintain confidentiality obtained from or disclosed by a competitor in the conduct of business, sponsored training, sponsored networking, or any other related event offered or organized by The Institute.
- Professional Competency - This principle establishes the following standards for all members of The Institute:
- Maintain the professional knowledge and skill at the level required to ensure that the position held is performed at the highest competency.
- Act diligently in accordance with applicable technical and professional standards while supporting their organization or company.
- Provide staff with training along with an awareness of all financial operations educational offerings and material.
- Act in accordance with the requirements of an assignment or position and ensure that all deliverables are completed in an accurate and timely manner.
- Tone at the Top - Member supervisors and managers contribute to establishing the ethical tone of their organizations. This principle builds on the foundations of integrity, objectivity, confidentiality, and professional competency - and requires adherence to the Code of Ethics. The Institute recommends:
- Pre-employment background checks of education, employment history, and personal references.
- Periodic training about the organization's core values, including:
- What constitutes unethical behavior?
- What is the employee's responsibility to report unethical behavior?
- How do employees report unethical behavior?
- Performance reviews that include discussions of an employee's contribution toward creating the appropriate workplace environment.
- Continuous evaluation of compliance with the organization's values.
- Confirmation of:
- An understanding of the organization's expectations.
- Compliance with the organization's code of conduct.
- A listing of known violations or statement of no known violation.