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ABSTRACT. Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration).
KEY WORDS: codes, corporations, ethical audit, ethics
Introduction
Codes of ethics are now prevalent in large corporations around the world. In the U.S., over ninety percent of large corporations have a code of ethics (Center for Business Ethics, 1992), while in Canada eighty-five percent have a code (KPMG, 2000). Of the largest European corporations, fifty-seven percent of U.K. companies have a code (Le Jeune and Webley, 1998), fifty-- one percent of German companies have a code (Schlegelmilch and Langlois, 1990), and thirty percent of French companies have a code (Schlegelmilch and Langlois, 1990). The prevalence of codes should continue to increase as governments, industry associations, professional associations, and special interest groups increasingly call for the establishment of corporate codes of ethics.
Along with the tremendous growth of corporate codes, researchers have begun to examine a number of code related issues. For example, researchers have looked into the reasons why companies might establish codes, including the provision of consistent normative standards for employees, avoidance of legal consequences, and promotion of public image (Ethics Resource Center, 1980, 1990). By carefully analyzing various samples of codes, researchers have discovered which issues are more prevalent, and which ones are missing (White and Montgomery, 1980; Chatov, 1980; Cressey and Moore, 1983; Sanderson and Varner, 1984; Mathews, 1987; Hite et al., 1988, Ethics...