How are codes of conduct generally understood?

Codes of conduct are generally understood as operational tools reflecting the standards required by legislation. This means they serve as formal guidelines that organizations are expected to adhere to in order to comply with legal and regulatory requirements. The primary purpose of these codes is to ensure that businesses operate ethically and responsibly while safeguarding the interests of stakeholders. They provide a framework for expected behaviors and practices within the organization, fostering a culture of transparency, integrity, and accountability.

While personal guidelines, suggestions for best practices, and recommendations from industry leaders can play important roles in shaping organizational behavior, codes of conduct specifically align with legal compliance and regulatory expectations, making them critical for mitigating risk and protecting both the organization and its stakeholders.