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Does Your Small Biz Need an Ethics Policy?

By Ephrat Livni, Esq. on April 15, 2016 | Last updated on March 21, 2019

You like to think of yourself as a good person and hope that your business will contribute positively to your community and the world. But having a feeling and having an ethics policy are two different things -- a policy makes abstract notions concrete, serving as a guide for you and your employees.

Your business code of ethics can be a moral compass for the whole operation. But coming up with an ethics policy can be a little daunting, so let's consider some general principles, as outlined by Kabbage, a small business finance site.

Policy Considerations

The first thing you should do when coming up with your ethics policy is think. How will it work with your company goals and office policies? Your ethics will dictate how you do business, meaning that this policy will impact your vendor and partner relationships too.

Your code of ethics should address three areas then -- social responsibility of the company and employees, company goals, and rules and guidelines for handling any ethically tricky situations. This will enable the people you hire and do business with to manage difficulties more easily because they know the company has notions of right and wrong and that these guide any actions.

For example, you have decided that your business is green and earth conscious. Your employees then know that they should not pursue talks with a potential vendor or partner who is indifferent to the environment. Or, say a question arises about pricing with two different partners and one company shares a green policy like yours while another does not, your employees will know that saving and making money at all costs is not in line with your goals, and will make the appropriate deal.

What Do You Value?

What do you value personally and professionally? How do you think this translates into the work you and your company does? Not only should you consider these questions very seriously but you should also talk to employees.

Although it is ideal to have an ethics policy before you begin doing business, it never hurts to put one in place. If you already have employees, get feedback. What do they think is important? What are the difficult situations they encounter and how would they have liked to be guided?

The discussion you have about your ethics policy will surely provide a lot of valuable insight and could help create a stronger sense of community in your company. Take the time to find out what matters to your workers and they will work harder to do the right thing for your company.

Talk to a Lawyer

If you are interested in creating an ethics policy, or need help with any aspect of business operations, speak to a lawyer. Get guidance so that you can guide your company and your team.

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