By Jared Nielsen, Marketing —
As a small business owner, any fraud that occurs in your company results in direct financial losses for you personally. The same goes for shareholders in a large corporation. Those with ownership rights in companies have a high incentive to keep fraud in check. However, those same shareholders also need to keep costs low, and a million-dollar investigation to uncover a $100 fraud is definitely not cost effective. Simple, cost-effective tools to minimize losses are essential in any organization to prevent financial loss.
The Benefits of a Written Code
One of those simple tools is a written code of ethics and conduct. A simple mission statement about how the company is going to act with regards to ethical questions instills a higher level of honesty in the workers. This is possibly the cheapest fraud prevention tool available. It only costs you a few hours of time and the cost of printing. But it helps define what is acceptable in the company. Taking the gray area out of a lot of decisions means less justification of unethical conduct. If an employee can decide that what they are doing is in a gray area, he or she can quickly make corrections to comply with the standards of the organization. This method helps employees be more honest and allows them to govern themselves rather than rely on external enforcement.
Another main benefit of a code of conduct is it gives the company an official stance when there is a violation. With a written code of conduct, organizations walk on much safer legal ground when they can prove to employees when violations occur that there needs to be disciplinary action. The code also makes monitoring violations easier. When using EyeDetect to evaluate employees, you can present questions that are taken directly from the code of conduct. By asking, “Have you ever violated number five of the code of conduct?” gives employers a much better basis to evaluate employees
By instituting a code of conduct and ethics, a company can promote a more honest work environment. They can define what they consider appropriate actions for employees and can then better follow up on how employees are adhering to the standards. Clear expectations lead to fairer evaluations and fair treatment for employees.