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Company Code of Conduct: Should Your Internet Business Have One?

By October 6, 2015September 21st, 2017Business Contracts, Business Lawyer
code of conduct

Do you really need a code of conduct for your Internet company?

Google’s “don’t be evil” starts the most well-known Internet company code of conduct. For corporate governance, it’s a good starting point.

However, Google’s new parent company (Alphabet Inc.) has raised the stakes with a code of conduct that requires employees (including those who work for subsidiaries like Google) to “do the right thing.”

Is an Internet Business Code of Conduct Necessary for Your Company?

Not really. Just as laws won’t make people more moral (either they’ll obey or they won’t), human nature is such that the highest standards stated in a corporate governance document, such as a code of conduct, will not make employees better people.

If you adopted “don’t be evil” as your standard, the concept of what constitutes “evil” will vary greatly between Employee A and Employee B. Similarly, even with examples, no code of conduct can create a bright line test for what it means to “do the right thing.”

How do you get employees to behave in a way that’s acceptable without a company code of conduct?

Some suggest that a broad philosophy rather than a code will work. For example, there are many ecommerce companies whose owners operate based on the Golden Rule, that is, you should treat others as you would like to be treated.

Character reveals itself through conduct, not a code

As an Internet lawyer, I recommend that the business clients I represent focus on hiring the right type of employee on the front end so that there aren’t disciplinary proceedings later based upon a vague conduct of conduct that’s a recipe for wrongful termination litigation.

One of the best ways to do this is hire all employees on a trial basis (e.g. 90 days) to get a feel for their ethics and competency. A written employment agreement can make it clear what your expectations are for performance by the new hire (tip – a work-for-hire agreement can do the same thing for your independent contractors).

It’s one thing to deceive a job interviewer, get hired, and stay on best behavior for a week or two. However, it’s almost impossible for the unethical or incompetent employee to hide their flaws for three months.

So is it wrong to have an ecommerce company code of conduct?

No. However, understand that a code of conduct isn’t a substitution for prescreening job applicants and new employees on a trial basis to ensure that you’ve got the right type of person working for your Internet business.

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Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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