Content area
Abstract
The vast continuum between the letter of the law (legality) and the spirit of the law (ethics) is discussed, and a review is presented of the fiduciary duties owed by a firm to its various publics. These aspects must be considered in developing a corporate code of ethics. The underlying qualitative characteristics of a code include clarity, comprehensiveness, and enforceability. While ethics is indigenous to a society, every code of ethics will necessarily reflect the corporate culture from which that code stems and be responsive to the innumerable situations for which it was created. Examples that represent the efficacy of the basic codal structure as it relates to situations between business and society, business and its stakeholders, and business and the consumer include: 1. payments made by a firm to obtain or retain business, 2. ethical financial reporting, and 3. the impact of the environment of business decisions. In any form, a corporate code reflects the ethical behavior standards to which a company has committed itself and its employees. Such a code will succeed only if it is supported by the board of directors, management, and the employees.