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Company Code of Conduct and Employee Behavior

The SEC released its final rule to implement a code of ethics under SOX Title 404. The stock exchanges have proposed that each company listed on the exchanges publishes its code of ethics. Discuss whether or not these additional disclosures will both have a positive impact on public confidence and influence investors' behavior. Support your position.

Evaluate the impact that a company's code of conduct can have on promoting positive employee behavior, improved decision making, or the willingness to report unethical behavior of coworkers. Recommend at least two ethical policies that might encourage employees to report unethical behavior.

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The SEC released its final rule to implement a code of ethics under SOX Title 404. The stock exchanges have proposed that each company listed on the exchanges publishes its code of ethics. Discuss whether or not these additional disclosures will both have a positive impact on public confidence and influence investors' behavior. Support your position.

-- In my opinion, the mandatory code of ethics will have a positive influence on public confidence and investor behavior, but the problem extends beyond this principle. The issue isn't really with the code of ethics. Even Enron had somewhat of a code of ethics. The problem is that the SEC needs to ensure the code of ethics is enforced. We can say that it would likely increase investor and public confidence both, as we could compare a company with a code of ethics to a company that does not have a code of ethics. Investors would likely move towards the company with the code of ethics, as it shows corporate governance. However, ...

Solution Summary

This solution evaluates the impact that the code of conduct has on employee behavior, improved decision making, and reporting unethical employee behavior. Ethical policies that would encourage employees to report ethical violations are also thorough discussed. A comprehensive solution is provided.

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