Why a Code of Ethics for a home or small business?

We saw Conrad Black, Martha Stewart, Enron, Tyco, and countless other titles as their career or business shall be examined to see "what went wrong?" Headlines screaming of insider trading, companies cooking their books and other scandals involving business executives mostly to large companies. Even today, many are questioning the ethics of lenders and investors in the subprime market, as people are losing their homes to foreclosure and investors are losing their money through direct or indirect involvement. Why is money lent to people who could not afford the payments when the normal market rates should take effect? Because lenders bundle these loans without identifying the inherent risk of their buyers?

Scandals like these tarnish the reputation of business in general, including the small business owner. Investors perceive a higher risk customers are more cautious, and the financial sector is reluctant to extend credit. Despite this, many small business owners that a written code of ethics unnecessary. There are even more home businesses that do not believe that a code of ethics is necessary for them. This assumption is simply false. There is a huge advantage to have a written code of ethics for small business including your home business.

A code of ethics identifies suppliers, customers, contractors and employees whose behavior is normal and what is not. We will face ethics violators in the normal course of business and we must stand firm to our ethical code and to avoid dealing with these people.

A written code of ethics identifies the fundamental principles that are considered essential in managing a business of integrity and character. Communicate this on your website and other informational materials will give you an advantage in the market. If you live by it, you have the advantage of being able to sleep at night.

A good code of ethics will have some basic ingredients, such as compliance with applicable laws, conflicts of interest in order to avoid sexual harassment or other, work safety, environmental concerns, industry regulations, rules and practices and the accuracy of financial information. Be careful however, as a culture or society rules may not be the same as yours. For example, some local incentives that require "special" to pay in order to obtain or carry on business. Or it may be that the oppression of the people there, where the business will occur. What will be the rules around this? The code of ethics must address these problems.

The code of ethics must fit with the personality, values ​​and mission of the particular small business. As hard as it may seem, ethics is a very personal thing. For example, a person may think that immoral (at least to that person) to sell a product of questionable value, while another will say that the valuation is made by the buyer and to withhold the good from the sale would be immoral. (This example assumes that no fraud or misrepresentation has occurred). It will help if you can include stakeholders in the development of appropriate parts of the code of ethics, in order to obtain a second opinion.

In the examples above, a code of ethics was in place, but have been ignored, misunderstood, or the people involved have justified their transgressions as "the greatest good." Thus, the fact of having an ethical code is not sufficient. Post your code of ethics, and establish a reporting system that could include accepting anonymous complaints. Even if you do not want to promote a culture of "Tattle-Tales", stakeholders need a way to inform someone of any ethical violations, they may see. The most important thing is to show others that you live by the code of ethics yourself. Living by a set of high values ​​garner the trust and confidence in business and you. Will then be available to discuss areas of interest to you.

Failing to act on violations of ethics disable even the best intentions of your own efforts because they do not announce and support your code of ethics for stakeholders makes it virtually meaningless. In formulating the code of ethics policy, specify what consequences go with deficiencies and violations. Your leadership skills will be tested as you strive to keep people in ethical conduct. But it's worth the peace of mind ....