We Are Whelchel & Carlton, LLP

The importance of business ethics and principles

On Behalf of | Jun 29, 2023 | Business & Commercial Law

Business ethics outlines various policies that Georgia companies should follow involving subjects such as appropriate practices and policies on corporate governments, discrimination, social and fiduciary responsibility and similar areas. While American law frequently guides business ethics, it also has a symbiotic relationship as ethics can also shape laws.

Defining business ethics

Business ethics helps define business and commercial law by ensuring that a certain level of trust should exist between companies and the consumers they serve. In other words, everyone receives fair treatment. The rise of business ethics occurred n the 1960s as consumers showed an increasing concern over social responsibility. Since then, the concept has evolved.

Principles of business ethics

Understanding what drives ethical behavior is essential, as a lack of moral principles can contribute to the downfall of businesses and the people who work for them. The 12 general principles of business ethics are the following:

  • Leadership
  • Accountability
  • Integrity
  • Respect for other people
  • Respect for laws
  • Responsibility
  • Honesty
  • Transparency
  • Compassion
  • Fairness
  • Loyalty
  • Environmental concern

Practicing good business ethics is important because it offers a code of behavior that every employee should follow and can benefit the company in brand growth and recognition, customer retention, growth and more.

What are the types of business ethics?

Many different types of business ethics exist, but the most important categories are social responsibility, transparency and trustworthiness, fairness and practices involving technology. Entrepreneurs, especially new entrepreneurs, often need help navigating the business ethics landscape. Most companies should have a code of conduct, guiding principles, reporting procedures and training programs to enforce ethical behavior.

Businesses should also have a standard procedure for employees to report unethical behavior when it occurs. Guidelines and practices should also make it clear that employees reporting such actions will not suffer retribution.