What is the Professional Code of Ethics?

A professional code of ethics, in business or in law, is a set of principles and rules designed to encourage ethical conduct on the individual or organizational level. From a moral perspective, it serves to protect stakeholders from poor decision making, especially when the interests of the business or law professional is at odds with ethical dealings. From a pragmatic perspective, it provides guidelines on how to approach decisions so that the organization can run smoothly and project a positive image to the public. Other organizations and individuals may also have similar codes of ethics. The Hippocratic Oath, which doctors are required to take before practicing, is perhaps the most famous example.

In business, the professional code of ethics is known as corporate or business ethics, in law it is known as professional responsibility, and for employees, it might be called a code of conduct. Corporate ethics arises from the notion that business incentives might conflict with morality and responsibility to stakeholders. Stakeholders could include shareholders, fellow employees, anyone affected by the company’s practices, and the environment. Left completely unbridled by moral intervention, the profit incentive in business can cause immoral actions, such as child labor or pollution. A party who breaks the code may face punishment, or sanctions, from the company and legal ramifications if their offense also broke the law.

The range of stipulations in a professional code of ethics will differ depending on how much the corporation interacts, especially in a competitive way, with ethical considerations. The code usually contains some sort of mission statement or declaration of major tenets that gives more overarching goals and beliefs, as well as a set of guidelines on acceptable and unacceptable workplace behavior and proper procedure and management. The mission statement may also be devised to boost public image, as in an oil company painting itself as “green,” or a utilities company being committed to bringing service to all stakeholders, regardless of their income. How much the code is enforced depends on the management, and often on the transparency and oversight of company dealings.

In law, the professional code of ethics, or professional responsibility, helps ensure that attorneys act in the best interest of their clients and in accordance with the law. This usually involves protections against conflict of interest, inappropriate solicitation, mishandling of fees, incompetent representation, improper communication with represented persons, and disclosing confidential information. A conflict of interest occurs when the attorney’s ability to act in the best interest of her client is corrupted, often by a previous involvement with the case or clients. Professional responsibility also restricts how lawyers can advertise, so that clients don’t develop false ideas of what the lawyer can offer and so that lawyers cannot personally extend an offer to represent someone, with the exception of friends and family.

Mishandling of fees can include giving part of the fee to another party that’s uninvolved with the case, or spending client fees before the fee has been earned. Competent representation includes such basic duties as meeting deadlines, thoroughly researching, and preparing the client. If a lawyer speaks to a client represented by someone else about their case, it is considered improper communication and a breach of ethics. Likewise, a lawyer is bound to a duty of confidentiality and cannot disclose information garnered during the representation. Breaking the code of professional responsibility can lead to suspension, permanently cost the attorney her license to practice, and even lead to legal charges in some cases.