Corporate codes have increased extensively over the last three decades, significantly, as a response to the legal requirements that were developed in response to financial and business scandals. The attention for Corporate Social Responsibility (CSR) and sustainability in big corporations has reinforced this fashion.

The content of the code is always a reflection of what companies hold desirable. Hence, it constitutes the basis for defining the indicators for measuring effectiveness and its CSR, and it also influences the ethical behavior in companies. Therefore, they are important to make the company ethical and an important step for corporate image.

Following the classification by Stohl et al. (2009), three generations of codes can be distinguished in relation to the process of globalization, and according to their relative focus. The first generation focuses on the legal dimension of corporate that seeks protecting individuals from organizational wrongdoing. The second generation extends the attention towards the relationship with internal and direct stakeholders, with prominence of the employees. Finally, the third generation is triggered by globalization, causing international corporations look for mechanisms to transcend cultural differences and transmitting a well-founded core of principles and behavioral standards shared by corporations and individuals.

Following this classification, we reviewed the codes of ethics of the 50 Most Admired Companies of the World ranked by Fortune in 2009, to analyze whether their thematic contents have evolved in the same path as the public demand. We classified their content, aligned with the literature on codes of ethics, according to five basic dimensions: ethics and corporate culture, regulation and compliance, stakeholders and internal organization, community and implementation.

We found that the codes of the most admired companies of the world seem to be closer to “codes of conduct” rather than to “codes of ethics” or “codes of CSR”. Normative and control orientation are dominant, attempts to encourage reflection and ethical growth in the organization are weak, and the concern for social responsibility is very low. These codes of ethics resemble “first generation” codes rather than “second”. In this sense, contrary to its public acceptance, the philosophy of CSR is scarcely present in the codes of the most reputable companies, which are still governed by traditional rules related to immediate economic success, normative compliance and internal management.

Read the full paper ‘Ethical codes and corporate responsibility of the most admired companies of the world: Toward a third generation ethics?’ published in the journal Business and Politics

Bibliography

Stohl, C., Stohl, M., & Popova, L. (2009). A new generation of corporate codes of ethics. Journal of Business Ethics, 90 (4), 607-622.