Code of Conduct in Corporation

I. Introduction
Sustainability and globalization are important issues in the world nowadays. It is more increasing
with significantly change on all sector, like technology developed on current days make industry
sector is developing faster (Hammond,2011). Sachs (2015) stated that first concern about this is
economical development. In the business era, there are many changes especially about this. There
are financial crisis in one decades ago which make company has a big trouble about this, like
corruption, scandals, and others that affect significantly to economic sustainability in the world.
Council on Business and society (2013) reported that many spectacular failure in the late of 1990 and
early of 2000. On the other hand, economic condition, since 1990, already grown faster than before.
For example, World wide web, who just still exist for two decades ago, nowadays it become an
effective communication and connecting billion people around the world.
Code of conduct is a set of general principles in the company which become basic values for all
employees to protect the business, and ensure all companys interest will be fulfilled.This code
provide all stakeholder (management, employee, shareholder, and society) to make conducive
economic condition and ensure stability also sustainability in the future.
This paper will explain about code of conduct, related with Sustainable Development, Corporate
Social Responsibility, Business ethics, Leadership, and Corporate Governance. Furthermore, this
paper will discuss about four general principle or code of conduct which useful in the corporate.Code
of conducts that explained are transparency, integrity, caring, and responsibility.
II. Discussion
Code of conduct is important thing in corporation. Code of conduct in corporation can protect
corporation from scandals and make sustainability for them. International Federation of Accountants
(2007) has defined that code of conduct is set of principles, standards, or values about norms which
can guide corporate system about their decisions and procedures. Code of conduct contributes to
make sustainable business and support about vision and mission from the company. Daly (1996)
stated that nowadays moral economy would focused in the future. It means economy is not only
about quantity, but quality will consider too, like social welfare and Gross Domestic Product. Mikael
Johnson et al (2014) stated that in the company level, it means corporate social responsibility (CSR).
In this case, code of conduct can support them and make all component in the company aware about
quality of product as their response to the society, include in environmental aspects. Because of big
crisis and scandals that happened in the world, every nations did more strict to the company,
including about code of conducts. Many code of conducts that applied in the company, four of them
are,
1. Transparency
Transparency is important to provide company in sustainability, ethics, and guidance to make
good corporate governance in the company. Transparency means corporate must provide all
information which needed for stakeholder with easy to access and easy to understand it.
Related with sustainability in corporation, transparency has roles in problem solving about
company problem and maintain sustainability from stakeholder dialogue. Mikael Johnson
(2014) stated that stakeholder dialogue become a solution and support sustainability which it
meets all needs without compromising, like future needs. Transparency provide all
information can accessed easily with stakeholder. Transparency is not means open all
information to the society, but transparency in the corporation also keep secrecy in the
company. Council on Business and Society (2013) has stated that transparency will
contribute corporate governance in trust and support integrity in the business area. In
leadership area, transparency will be more easily to make best decision. Nillson (2015) stated
that decision making process is important thing to make effective and efficient solution for
the problem. Transparency with honesty in the principle has role to support decision making
process in leadership area with data availability for stakeholder to do it.

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 Code of Conduct in Corporation

2. Integrity
Integrity was a code that uphold all values in behavioral ethics to corporate governance code.
Based from Wikipedia, integrity has definition as the quality of honestly and keep much
more about moral principle that can consistently in their norms to ethical standard. Integrity
is a starting point of commitment and promise in the life, like to build trusted in the business
and service perspective. Related with the company, it can become the most important values
before other values to make corporate culture value in the system for the company. Becker
(1998) in Jacobs (2004) stated that integrity become a predictor for the job and a determinant
to trust the company. Jacobs (2004) stated that integrity incorporates a balance between
loyalty in the company and associated with moral humility in the society. Thus, integrity
support sustainability very much. In corporate governance code, integrity showed
successfully aspect in the system. LeClair et al (1998) in Jacobs (2004) defined integrity
management as uncompromising implementation of legal and ethical principles that plays
important role as the strategic planning process of the corporation. In Corporate governance
code, this support them to the future. Violation of integrity make serious problem in the
company,Sebhatu (2015) stated that Volkswagens scandals happened because Volkswagen
violate integrity, especially to the environmental issue. Integrity become importatnt to
support sustainable business. Volkswagens scandal remind to economic system about
integrity.
3. Caring
Based from Wikipedia, Caring has definition as how people can feel sympathy and empathy
to another people in his/her life. Caring is an important norm for the human itself. In
leadership area, caring is important to make solution especially for ethical dilemma. Ethical
dilemma happened because of conflict interest between stakeholders. Caring in the corporate
showed about supporting from the stakeholder when plays their roles in the company. In
leadership area, Johnson (2015) stated that ethical leadership is the solution for ethical
dilemmas in the company. Caring plays its role to make ethical leadership when solved
ethical dilemmas and make sustainability in their decision. Caring in corporate governance
code supports about reflection of implementation code with vision of the company. In Nation
level, caring makes government must oversee and make guidance for all companies about
right way and updating its code for them, like KNKG (2006) which upgrade their code and
implemented more strict to the company.
4. Responsibility
Responsibility is a code of conduct in corporation which fulfill company needs.In general,
from Wikipedia, responsibility has definition as obligation to complete a task with fulfill all
of the requirement for them. This code has main roles in corporation to ensure all expected
target and maintain sustainability in the corporation. This code must applied for all corporate
components and expected for the long term strategy in corporate. Szekely and Knirsch
(2005) have stated that making sustainability needed a responsible leader. Responsible in
leadership will affect more to the employee follow the code. On the other hand, WBCSD
regards CSR as a method which supports companies to fulfil their responsibilities to the
stakeholders, even shareholders as the ownership of the company. Responsibility in
corporate governance code shown with the report from the company. World Business
Council for Sustainable Development (WBCSD, 2002) have stated that sustainable
development reports is a public reports who created by companies to provide all stakeholders
all activities on economic, environmental and social dimensions or its contribution to
sustainable business.

III. Conclusion
Based on text above, it can conclude,

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 Code of Conduct in Corporation

1. Code of conduct is important thing that must considered in the company. Code of conduct in
corporation have rules to guide them into right way and minimize conflict interest between
stakeholders.
2. Transparency as a code of conduct, has many roles in corporate system. Transparency in
leadership system has a roles to support decision making process with open all information
in the stakeholder. The information must be clearly and easy to know. Corporation as the
system implemented transparency in the code of conduct to prevent the system from the
scandals, corruption that make big crisis in the world.
3. Responsibility as code of conduct plays an important role in the system to provide about
consistent and maintain sustainability development in the corporation. Responsibility make
every corporate components do task and report it to the stakeholder as the real evidence
about its job. In leadership, responsibility plays role at ensure all task or strategy have
already finished. Responsibility for corporate can minimize conflict interest and become
problem solving at the company.
4. Caring and integrity as the code of conduct ensure trust and support sustainability in the
corporation.
IV. Reference
Burwell, David and Litmann, Todd. 2006. Issues in sustainable transportation, Int. J. Global
Environmental Issues, Vol. 6, No. 4, pp. 331-347
Council on Business & Society (2013), Corporate Governance and Leadership: White Paper,
ESSEC Publishing.
F Szekely, M Knirsch.2005. Responsible leadership and corporate social responsibility:: Metrics for
sustainable performance. European Management Journal, Vol. 23, No. 6, pp. 628647
Jacobs, David C. 2004. A Pragmatist Approach to Integrity in Business Ethics. Journal of
Management Inquiry, Vol. 13 No. 3, pp. 215-223.
KNKG.(2006). Indonesias code of Good Corporate Governance. Jakarta : National Committee
on Governance.
Nilsson,A Hansen .2004, Acting as a leader, lecture notes distributed in Leadership course at The
University of Karlstad, Sweden on 23 November 2015.
Raine Birger Isaksson Rickard Garvare Mikael Johnson , (2015),"The crippled bottom line
measuring and managing sustainability", International Journal of Productivity and
Performance Management, Vol. 64 Iss 3 pp. 334 355
Rodriguez-Dominguez L., Gallego-Alvarez, I. and Garcia-Sanchez, I. M., (2009), Corporate
Governance and Codes of Ethics, Journal of Business Ethics, Vol. 90, No. 2 (pp. 187-202)
Sebhatu, Samuel Petros .2015, Corporate governance, lecture notes distributed in Leadership
course at The University of Karlstad, Sweden on 7 December 2015.

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