Code of Conduct
A code of conduct sets the ethical and professional standards that all people in your business must uphold — a cornerstone of good corporate culture.
What is a Code of Conduct?
A code of conduct is a formal document that sets out the ethical principles, professional standards, and behavioural expectations that apply to all directors, officers, and employees of an organisation. It covers conflicts of interest, gifts and entertainment, confidentiality, use of company assets, reporting obligations, and the consequences of violations.
For Australian businesses, a code of conduct supports governance obligations under the Corporations Act 2001 for directors, and demonstrates to customers, investors, and regulators that the business takes ethical conduct seriously. In listed companies, ASX Governance Principles recommend a code of conduct as part of sound corporate governance.
When do you need a Code of Conduct?
- ✓When establishing governance and conduct standards for a growing business
- ✓Before listing on a stock exchange or seeking institutional investment
- ✓When applying for government contracts that require conduct standards documentation
- ✓When operating in regulated industries where ethical conduct requirements apply
Key provisions to include
Core Values
The ethical principles and values that underpin all conduct standards in the organisation.
Conflicts of Interest
How employees must identify, disclose, and manage actual or potential conflicts of interest.
Gifts & Entertainment
Acceptable gift and entertainment thresholds and the process for disclosing exceptions.
Confidentiality
Obligations to protect business and third-party confidential information.
Use of Company Assets
Appropriate use of company property, systems, and resources.
Fair Dealing
Obligations to deal honestly and fairly with customers, suppliers, competitors, and colleagues.
Reporting & Whistleblowing
How to report suspected violations and the protections available for reporters.
Enforcement
Consequences of code violations, including disciplinary action and termination.
Common mistakes to avoid
Creating a code of conduct that is generic and not tailored to the specific risks and culture of the business
Not communicating or training employees on the code — a code that employees have not read or understood provides limited protection
Not including a clear reporting mechanism — employees need to know how to raise concerns safely
Frequently asked questions
Is a code of conduct legally required in Australia?
Not for all businesses. However, listed companies are expected to have one under ASX Governance Principles. Companies in regulated industries (financial services, healthcare, government supply) may be required to have one by their regulator or customer. All businesses can benefit from a well-drafted code regardless of legal requirement.
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