CopiedCode of Conduct vs. Code of Ethics: What’s the Difference and Why It Matters

When organisations embark on creating policies for ethical conduct, two terms often emerge: code of conduct and code of ethics. These phrases are sometimes used interchangeably, which can cause confusion. 

In this article, we clarify the differences between a code of ethics and a code of conduct, explain how they work together, and why understanding this distinction matters – especially for companies that are just beginning to formalise their compliance and ethics programs. 

What Is a Code of Ethics? Copied

A code of ethics is a high-level document that outlines the core ethical principles and values that an organisation commits to. Think of it as the organisation’s moral compass or its “constitution” in terms of values. 

It’s generally a broad guide to decision-making, providing a framework for what is considered right or wrong in various situations. For example, a code of ethics might declare that the company acts with integrity and fairness, respects diversity, prioritises customer well-being, and so on. It tends to focus on guiding ideals rather than detailed rules.

Some organisations refer to this as a “values statement” or “statement of ethics”. For example, a non-profit’s code of ethics might talk about commitment to its mission, stewardship of resources, and truthfulness in all communications. A healthcare company’s code of ethics might emphasise patient welfare, confidentiality, and professional integrity.

What Is a Code of Conduct? Copied

A code of conduct is a more detailed set of rules and standards that define acceptable behaviours for employees (and sometimes other stakeholders) in specific situations. If the code of ethics is the “constitution” (broad principles), the code of conduct is the “law” – more specific and enforceable. It translates the company’s values into everyday actions and decisions that employees should or should not do.

In essence, the code of conduct is about compliance and behaviour control. It’s the rulebook that helps employees understand exactly what is expected of them in practical terms. It takes the lofty ideals from the code of ethics and says, “This is how we implement those ideals here.” For instance, if the code of ethics says “We value integrity,” the code of conduct will have rules against fraud, rules for accurate record-keeping, etc., which operationalise integrity.

To illustrate the difference: a code of ethics might urge employees to “respect and safeguard company resources,” whereas the code of conduct will state “Do not use company credit cards for personal expenses; submit accurate expense reports as per the Expense Policy.” Both relate to handling resources ethically, but one is principle-based and the other is rule-based.

Differences Between a Code of Ethics and a Code of Conduct Copied

Now that we’ve defined each, the below table will help provide a quick distinction between the two concepts, in order to quickly understand the differences between a code of ethics and a code of conduct:

Aspect	Code of Ethics	Code of Conduct
Scope & Purpose	Broad and aspirational; governs general decision-making and reflects organizational values.	Specific and practical; governs concrete actions and behaviours.
Content	Contains principles (e.g., integrity, respect, responsibility) and sometimes examples of application.	Contains specific rules and policies (e.g., no gifts over X, no insider trading, no data misuse).
Language	Uses value-based language: “We commit to…”, “We believe in…”, “We strive to…”.	Uses directive language: “Employees shall…”, “Must not…”, “Are required to…”.
Enforcement	Not directly enforceable; violations are interpretive (e.g., failing to “be innovative”).	Enforceable; violations are clear and subject to discipline (e.g., cheating on an expense report).
Audience & Use	Outward- and inward-facing; applies to all stakeholders, including public-facing values.	Primarily for internal stakeholders (employees, contractors); focuses on day-to-day expectations.
Examples	“We value transparency. We communicate openly and honestly with our stakeholders.”	“Do not withhold material info from auditors” or “All marketing claims must be truthful.”

What to Choose and When to Use Copied

When developing your compliance program, you want to be clear about what you are creating and why. If you ask a team to draft a “code of ethics,” they might produce a very different document than if you asked for a “code of conduct.” Knowing the difference ensures you set the right scope. 

For example, a start-up might initially just have a simple one-page “Our Values” statement (essentially a code of ethics). As it grows, it will likely need a more detailed employee handbook or code of conduct with specific HR and compliance policies. Using the right term helps everyone understand the purpose of the document.

Comprehensive Ethical Framework Copied

An organisation often benefits from having both – the high-level principles and the detailed rules. The code of ethics provides the foundational ideals that inspire a positive culture. The code of conduct provides the actionable rules that implement those ideals and keep behaviour in check. They complement each other. 

If you only had a code of conduct (rules) without explaining the values behind them, employees might follow the rules grudgingly or without understanding the bigger picture. Conversely, if you only had a lofty code of ethics, employees might agree with it in theory but lack guidance on what to do in practice. Having both ensures that employees understand the “why” and the “what” – why we care about these things, and what exactly we expect you to do.

Audience and Usage Differences Copied

The difference also matters in terms of who uses these documents and how. Leadership and communications teams might use the code of ethics to shape messaging and decisions at the strategic level (“Does this decision align with our core values?”). 

Managers and HR might use the code of conduct on the ground (“You violated the conflict of interest policy as stated in our code of conduct, so here are the consequences.”). Educating your workforce on both levels helps reinforce that values and rules are both important. It also helps external stakeholders distinguish between public value commitments and internal policy enforcement.

Early Compliance Program Development Copied

For companies building early compliance policies (our target here), understanding this difference helps prioritise what to develop first. A small company might ask: should we write a code of ethics or a code of conduct first? The answer could be: start with a simple code of ethics plus a few critical conduct policies. 

For example, a small firm could publish its values (code of ethics) to set the culture from the get-go, and simultaneously ensure it has a handful of key conduct guidelines (like an anti-harassment policy and basic conflict of interest and confidentiality rules) to prevent major issues. As the company grows, the code of conduct can be expanded into a more comprehensive document covering more scenarios. 

Stakeholder Trust Copied

Each code addresses trust from a different angle – one emotional/values-driven, one practical/procedural. Being able to articulate both your ethical principles and your conduct standards enhances credibility. Investors, partners, and regulators like to see that a company has thought through both levels: “soft” values and “hard” controls. It shows maturity in corporate governance. 

For instance, an investor might be impressed to hear a founder talk passionately about the company’s code of ethics (mission and values driving the business), and equally reassured to know there’s a code of conduct ensuring compliance with laws and internal accountability. 

Implementing Both Codes in Your Organisation Copied

Typically, companies start with 4-6 core values that capture what the company stands for. This will form the backbone of the code of ethics. Involve the team in identifying these – it could be through workshops or surveys. Authentic values (not just buzzwords) will resonate more. 

Expand on each value with a sentence or two that describes what it means in practice. Keep it concise and jargon-free. The finished product might be a one-page or two-page document. Share it with all employees and leadership. 

Identify Key Conduct Policies Needed Immediately Copied

Depending on your business, pick the top few policies you need to implement from day one. Common ones are: Anti-Harassment/Non-Discrimination policy, Conflict of Interest policy and perhaps IT/Data Security guidelines. You might not call this a “code of conduct” initially, but they serve that function. Ensure employees are aware of these rules and the consequences for violations.

Training and Acknowledgment Copied

For both the code of ethics and conduct, communicate them clearly to all staff. Have new hires acknowledge the code of conduct as part of their onboarding paperwork. For the code of ethics, you might not need a formal sign-off, but do ensure it’s talked about and maybe included at the front of the employee handbook.

Update and Evolve Copied

Revisit your codes annually. Maybe your value statements need tweaking as your mission evolves. Or new laws require adding a section to the code of conduct (for instance, new data protection regulations might necessitate a beefed-up privacy section). Keep them up to date and communicate any changes clearly.

Lead by Example Copied

Ensure founders and managers embody the code of ethics and follow the code of conduct. In a small company, informal behaviour sets precedents. If employees see the boss bending rules, the documents lose meaning. Conversely, leadership living the values and obeying the rules will cement their importance.

How Logwise Simplifies Policy Management for Both Codes Copied

Managing a code of ethics and a code of conduct – and the various policies therein – can become complex as an organisation grows. This is where Logwise can act as a vital partner. Logwise provides a central platform to manage all your compliance policies, whether they are high-level ethical guidelines or detailed conduct rules. Here’s how Logwise can help:

Central Repository of Policies Copied

Logwise allows you to store your Code of Ethics and Code of Conduct in one accessible hub (along with any other policies). Employees no longer need to hunt through emails or intranet pages – the latest versions are readily available in a single library. Companies can even upload a short “values statement” separately from the detailed conduct code. Everyone knows where to go to find these core documents.

Automated Distribution and Sign-Off Copied

When you roll out a new code of conduct, Logwise can automate the distribution to all staff and capture their electronic acknowledgments. The platform can ensure every employee reads and signs the code, and it keeps records of that. If you update a policy (say add a new section to the conduct code), it can send out the update and request a quick re-attestation from employees. 

Consistent Updates and Notifications Copied

When it’s time to update your codes, Logwise streamlines the process. You can edit the document in the system, push a button, and instantly notify all users of the new version. No one will be using an outdated handbook because the platform ensures only the current version is active. If you want feedback on a draft revision of the code, you could even open up a controlled comment period using Logwise’s tools or track acknowledgments of the changes. This keeps everyone in the loop and engaged with the evolution of your ethical guidelines.

Audit-Ready Records Copied

Whether a regulator wants proof of your compliance program, or your board wants assurance that everyone signed the latest code of conduct, the correct software can ensure a smoother process. You can generate reports showing 100% of employees acknowledged the code, when they did so, and even how they scored on related quizzes or training. 

Conclusion Copied

Ultimately, understanding the difference between a code of ethics and a code of conduct allows you to leverage each for its purpose – inspiration and guidance on one hand, clear rules and accountability on the other. With the help of technology like Logwise, implementing and maintaining both becomes far simpler and more effective.

Book a demo to explore how Logwise helps you manage both ethical principles and enforceable conduct.