Drawing up a code of ethics

When it comes to developing an ethical organisation, it's up to the board to set the tone – not only will the board play a leading role in formulating policies, guidelines and the code of ethics, it will be expected to adhere to these to the letter.

There is little chance of an ethics program being embraced elsewhere in an organisation if it is not taken seriously by the board. This help sheet merely touches on some of the very important issues you need to consider when developing a code of ethics.

What are ethics and why are they important?

Ethics are the guiding principles that provide a group's moral compass; they guide behaviour, inform decisions and provide standards of right and wrong. In essence, "ethics" is basically concerned with what it means to be a "good" person, and by extension a good board and a good community group.

There are obvious reasons why you should be striving to be part of a good board and a good community group. For community groups, moral issues such as trust, reciprocity, equality, fair play, honesty and integrity are at the very core of why they exist and how they do what they do.

And evidence points to the fact that an emphasis on ethics can have positive operational outcomes as well.

Furthermore, the preparation of an ethics program provides an irreplaceable opportunity for a responsible organisation to create a positive public identity. Ensuring your organisation is identified as one with high ethical standards can lead to a more supportive political and regulatory environment and an increased level of public confidence and trust among important constituencies, prospective donors, and stakeholders.

What is a code of ethics and why should we have one?

A code of ethics is a formal statement setting out the standards of behaviour expected of your community group, its board and its members.

Some people may question the value of such a statement; after all, most people want to do the right thing anyway, and those who want to do the wrong thing are unlikely to be deterred by a sheet of paper. However, ethics, like justice, must not only be done but must be seen to be done. There has been a dramatic increase in the ethical expectations of businesses and professions over the past 10 years – and not-for-profit organisations are also increasingly falling into that net. Having a code of ethics can help to define your organisation and demonstrate that it is prepared to be bound by publicly stated standards.

A code of ethics will also create immense internal benefits for your community group. Properly done, it can unite members and other stakeholders behind the organisation's goals and ideals, reinforce the group's purpose and bring together the organisation's management, board, staff and volunteers.

A formal code will also help to enhance your board's decision-making and ensure that it remains consistent to the core values and core mission of your group. Whether it is a decision over a sponsorship deal or an affiliation with another organisation, your code of ethics will have some bearing on what is deemed acceptable.

What goes in a code of ethics?


It is a good idea to begin the document with an introductory preamble that sets out the purpose of the code and enshrines the commitment of the organisation at the highest level. The introduction should spell out how this code came to be, the process behind its development and what it is that your group is trying to accomplish by introducing it. It should address the following points:

  • Why a code? Why now?
  • What is the ethical/legal context in which the organisation operates?
  • What are some of the challenges that the board, management, employees and members face, and how can this code of ethics be a helpful document for people at all levels?
  • What are the major trends facing the sector as a whole that will impact and affect the code and its implementation?
  • What kind of example might this set for other organisations, if at all?
  • Why is this code important?
  • How will it be enforced?
  • Is it mandatory?
  • Does it apply to everyone?

Instructions for use

If you want a "user friendly" code of ethics you should include details on how to use it.

This section should include:

  • A telephone number for getting interpretations of the code
  • Procedures for those wishing to raise an ethical issue (e.g. "first go to your supervisor, then to …")
  • Enforcement mechanisms
  • Internal and external sources through which advice and counsel can be offered
  • A procedure for suggesting changes to the code.


Generally speaking, your code of ethics should provide guidelines, rather than attempt to cover all decisions in all situations. Any document that attempted to be all-encompassing would be too lengthy and legalistic to be workable so you should err on the brief side where possible.

There is an enormous range of ethical issues that might be tackled by your code; what you include will ultimately depend on what is seen as important to your group. In deciding which topics to address in your code you might ask:

  • What are the principal laws and regulations applicable to the organisation?
  • What, if anything, has gone wrong in the past – either in fact or in people's perceptions?
  • What else could go wrong?
  • What guidance do we need to offer our intended users/clients/volunteers/members?
  • Where are there grey areas? What do we need to explain or confirm?

Some of the clauses you might consider include:

  • The organisation's values; the standards expected of all staff, volunteers, members, etc. For example:
    • Trustworthiness (honesty, integrity, promise-keeping, loyalty)
    • Respect (autonomy, privacy, dignity courtesy, tolerance, acceptance)
    • Responsibility (accountability, the pursuit of excellence)
    • Caring (compassion, consideration, giving, sharing, kindness)
    • Justice and fairness (impartiality, consistency, equity, equality, due process)
    • Citizenship (lawfulness, community service, the protection of the environment)
  • The organisation's community responsibilities – does your organisation want to state a commitment to, say, social harmony? Or community health? The environment?
  • The organisation's mission and the expectation that all those involved with the organisation will work towards that mission, along with an expectation that the mission will be responsive to changing needs and expectations.
  • The organisation's internal responsibilities, such as compliance with all laws and regulations and management of finances.
  • The organisation's commitment to openness and transparency and how this standard will be achieved.
  • The organisation's attitude to fundraising, taking into account:
    • Are there any sources your organisation will not accept money from?
    • Will donors be permitted to exercise influence over your organisation?
    • Are any fundraising methods objectionable to your group?
    • How far is your organisation willing to go to get a sponsor?
    • Will any sponsor do or are there companies your organisation will not be associated with?
    • Does it matter where your organisation's money is invested?
    • What obligations does your organisation have towards donors?
  • The organisation's commitment to ongoing evaluation of the needs of its stakeholders, as well as its own effectiveness, and adherence to its mission.
  • The organisation's commitment to inclusiveness and diversity in relation to hiring and promotion of staff, board recruitment and the stakeholders it serves.
  • The organisation's commitment to privacy – for staff, volunteers, clients, member, donors, etc.
  • The organisation's obligations to its staff and volunteers, e.g.
    • Commitment to equal opportunity and diversity
    • Standards for fair treatment of staff
    • Attitude to work-family balance
    • Fair recompense (for staff), and training and support (for staff and volunteers)
  • The organisation's expectations for the conduct of staff and volunteers, e.g.
    • Disclosure of conflict of interest
    • Reporting illegal or questionable activity
    • Maintaining confidentiality
    • Refusing or declaring personal gifts from stakeholders
    • Use of the organisation's property for personal purposes
    • Attitude to staff taking outside employment
  • The organisation's commitment to governance standards, including:
    • What behaviour is expected of board members
    • The values to be honoured in the board's dealings with members, staff, clients, and other stakeholders
    • Board members' duties, including setting the organisation's mission, managing its finances, acting in its interests, avoiding conflicts of interest, not profiting from their position as a board member, adhering to all laws and regulations, etc.
    • The board's responsibility to hire and monitor the best CEO possible
    • The board's responsibility to ensure it maintains appropriate skills and experience
    • The board's commitment to transparency and to ensuring policies are clearly articulated and easily obtained
    • Under what circumstances speaking out externally on various issues may be permitted
    • Advocacy and political activities – what is permitted and where should the line be drawn?

What next?

  • Get the word out

    Your code of ethics must be distributed to everyone that is involved with the organisation – board members, staff, volunteers, sponsors, donors, suppliers, clients, members, business partners, governments and the general community – so that all are aware of the set of standards by which your group operates.

  • Organise ethics training
    Your new code will be useless unless everyone knows what it is, how it works and their roles in it. Training is the key to managing or avoiding negative responses and should be an integral part of both the implementation and ongoing maintenance of any aspect of an ethics program.
  • Undertake a review
    Once your organisation has drawn up a code of ethics, it may be a good idea for the board to review its existing policies and operations to ensure that all activities are entirely consistent with the redefined principles that will now guide the organisation.
  • Set up an ethics committee
    If it hasn't already, your board might like to set up an ethics committee, whose purpose will be to provide an ongoing review of the organisation's ethics policies. In fulfilling this purpose, the committee may be responsible for conducting or directing ethics audits, providing interpretation of the code to staff and the board and acting as a review body when problems occur.

Draw up a checklist

It is possible to put together an informal checklist to encourage an ethical review of the decisions that come before the board. Questions might include:

  • Has the board involved all the people or groups who have a right to have input or to be involved in making this decision?
  • Has the board anticipated the consequences of this decision on any people or groups who are significantly affected by it?
  • Will others perceive this decision to be essentially fair, given all of the circumstances?
  • Does this decision uphold those enduring values that are relevant to this situation?
  • How well would this decision serve if it became a universal law applicable to all similar situations?
  • How would the organisation look if the details of this decision were open to the whole world?

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