| Author's Name: Mark Schultz
Date: Wed 24 Feb 2016
A code of conduct is becoming a more utilised document to assist individuals and organisations establish the benchmark for and expectations of behaviours of members of the board and therefore by extension, all other persons working in the organisation. The benefits are many and both newly established and existing boards should incorporate a code of conduct into the governance framework.
There is an expectation that board members of both non-profit and for profit organisations will always act in good faith, be fair and impartial, with honesty and integrity and in the best interests of their organisation at all times. However, what a board does not want to be confronted with is an interpretation issue/discussion/debate on what all these words mean in terms of actual behaviour. To avoid this, it is highly recommended that a board develops a code of conduct, and that all board members, in the first instance, should participate in the construction of this governance document so that there is no ambiguity in interpreting what it actually means.
Furthermore, before a new board member is appointed, the code of conduct should be discussed and the potential candidate signs off to having both read and understood the intent and standards of the code. In this way, collectively and individually, all board members understand the behaviours that are expected in participating at the highest level of leadership and governance in the organisation.
On an annual basis, the board should review its code of conduct to ensure it reflects current expectations and it should also take a moment to reflect on its collective and individual performance over the past year.
The board sets the standards for the whole organisation and there cannot be two sets of rules. The code of conduct and its embodiment in day to day operations and activities will make a valuable contribution to creating and maintaining the right culture across the whole organisation. For this reason alone, it is a core component of good governance.