CHAPTER ONE: GENERAL CODE OF ETHICS

Introduction

One of the problems of SMEs is that they have a marginalized code of conduct. This is because such organisations employee relatives and sometimes it is difficult to strictly impose the code of conduct when a family member breaches it. But for equity purposes the organization’s code of conduct must apply to every employee. Having a selective approach can negatively affect the organisation in many ways such as employee turnover, production losses due to low morale and bad reputation. Honest employees will either be demotivated or leave the organisation if the company does not use fairness when enforcing code of conduct. When it comes to employment code of conduct there must be no sacred cows if the SME organisation is really determined to grow and succeed. One of the advantages of enforcing code of conduct is that it provides employees with guidance in maintaining the legal, ethical and cultural values of the organization. It is important to note that the code of the organisation must be drawn from the Constitution of the Country, Labour statutory, and Collective Bargaining agreements for the industry.

A code of ethics is a set of principles intended to guide professionals in conducting business with honesty and integrity. Practically, a code of ethics supports the organization’s mission and values, thereby acting as guideline on establishing organisational ethical principles routed in the organization’s core values. It also defines the standards to which professionals are held. The following general code of ethics can be imposed to all employees in the organisation through induction, continuous training and the day-to day management of the organisation.

a) Coode of Honesty:

This is the first and foremost requirement for there to be a perfect contract of employment between the employer and the employee. Both the employer and the employee are required to engage in utmost good faith during the whole employment period. To uphold this code both the employee and employer are not allowed;

The employee is not allowed to;-

1) Have potential to, pay or receive any bribes in order to obtain or maintain business.

2) Carry out any act of dishonesty or intentionally misrepresent the facts in any business transaction.

3) Falsify corporate records, hide improper activities or fail to accurately reflect the organization’s business.

4) Generally, an employee must apply universal moral and ethical standards like trustworthiness, respect, responsibility, fairness, caring, and citizenship in all employment relations and business transaction.

#NB It is important to note that code of ethics works as guideline to business best practices such maintaining honesty, integrity, and professionalism. Any violation of code of ethics can lead to disciplinary hearing and mitigation process. Laws are there to regulate business conduct between employer and employee together with all interested stakeholder. Above all ethical conduct has proved to benefit the organization and society in the long term. The concept aligns with triple bottom line theory of profit, people, and planet meeting the growing expectations of socially responsible customers, employees, Employers and investors.

The main types of codes of ethics include

a. Compliance-based

b. Value-based

c. Professional codes of ethics.

b) Code of Political engagement and Community Activities

One of the mistakes some SMEs organisations make is that they publicly side themselves with certain politicians or political parties. This is a path to destruction because the company is not a political entity and it must distance itself from dirty politics. Hence there must be a code that guides employees’ political engagements keeping in mind that all citizens have the right to exercise their political right without any hindrance from the employer. The following should be inserted in the code;

1) Employees may participate on an individual basis only, and outside the organization premises.

2) The organization encourages employees and managers to practice their rights/responsibilities as private citizens and not as organization employees.

3) However, the organisation may participate in community services such as cleaning campaign, awareness and other activities that are of national interest.

c) Conflict of Interest:

The organization’s conflict of interest policy must be clear and understood by all especially managerial employees. Most of the SMEs employee relatives and they’re sometimes jealousy hence they start looking for ways to form a similar line of business stealing resources and customers of the organisation. Conflict of interest occurs when a person's or entity's vested interests raise a question of whether their actions, judgment, and or decision-making can be unbiased. Another area is when a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another.

In general terms conflict of interest can be defined as a situation in which someone cannot make a fair decision because they will be affected by the results of their decision. These situations can involve both personal and professional loyalties, but they almost always have a professional impact. Mostly, the person or team can't perform their duties appropriately because it could mean betraying their interests to one of the parties within the situation. To avoid such instances an organisation must have some of the following codes outlined in the Human Resources Manual Book.

1) Do not compete with the business where you’re employed.

2) Never let your work at the organization be influenced by personal or family interests.

3) Do not profit from insider knowledge, such as insider trading.

In order to have a comprehensive conflict of interest code must it cover all areas of business operations including the following.

i. Contractual or legal obligations

ii. Loyalty and relationships to family and friends

iii. Money

iv. Inside knowledge

v. Reputation and status

vi. Professional duties

vii. Business interests

d) Code of Accounting and Record Keeping:

Money handling is one of the most important functions for any organisation. There must be money handling policies and procedures for all transactions to avoid any negative loopholes such as theft, money laundering, unaccountability, unnecessary buying etc.

1) The business files must reflect all components of transactions.

2) Appropriate records must be kept for all transactions.

3) It is the responsibility of the employee to maintain these standards.

4) Employees are expected to co-operate fully with internal and external accountants/ auditors.

5) Accounting information must not be falsified or concealed under any circumstances and an employee whose activities will cause false financial reporting will be subject to disciplinary action.

e) Code of Confidentiality/ Information Disclosure:

Information disclosure is very important in an organisation. Leaking or selling of employee information to the general public and unauthorized personnel is strictly prohibited. This information includes employee health status, age, address, salary, grade, benefits, employment conditions etc.

However, every employee may disclose their concerns and such information to the Human Resources Dept. or any other senior personnel designated for handling employees issues. The employee may also report their concerns directly to his/ her manager any personal situation or transaction that may be confidential and affect their work.

f) Code of Dress Code:

One of the best strategies an organisation can use for marketing and culture development is through company dress code. An organisation must put into policy the dress code for identity and safety purposes. The organization attracts attention when it best presents itself a courteous, smart and efficient image. Personal appearance and dressing of employees is one vital element such that-

1) Employees are expected to adhere to organization uniform during working hours.

2) Employees who have not predefined uniform are expected to be appropriately and neatly dressed in business clothes in addition to a neat tie at all times, and should not wear jeans or casual clothes.

3) Employees are required to maintain a high standard of cleanliness and personal hygiene.

4) Employees are not allowed to be chewing a gum inside the office.

g) Code of Health and Safety:

Employee Health and Safety is critical in the organisation hence there must be a separated SHE file/policy specifically designed to safeguard employee wellbeing at work. The main Health and Safety rules are;

1) Employees are expected to wear PPE where it is required

2) Employees are required to adhere to safety standard/procedures established

3) Employee are required to exercise personal hygiene and health awareness programs

4) Employees are required to follow work procedures when operating machines

h) Code of Personal data:

Employee personal data is very important to the organisation and any changes to personal details during employment with the same organisation must be notified to the Human Resources Department. In Zimbabwe some of the organisations ended up having cemetery to bury their employees because the companies did not have such employees’ full information like address, phone number and next of keen.

NB: Any personal data of employees should always be treated as confidential.

i) Code of Gifts to or from third parties:

The organisation must have a policy for handling of gifts as a way of avoiding manipulation of employees by the business suppliers or clients. The giving or accepting of favors/gifts to or from a client, potential client, supplier or potential supplier of goods or services to the organization is not permitted unless what is given is of nominal value, or if refusal to accept would be considered discourteous or harmful to the organization. The organisations need to formulate a policy on what gifts are acceptable such as T-Shirts, Calendars, Stationery, Notepad, and other small items of nominal value. A cash gift needs to be regulated and authorized.

A cash gift value shall not be more than...............

TO BE CONTINUED...!