In January of this year, the Bank of America released its amended Code of Ethics, detailing standards, procedures and policies that every employee should uphold and follow. From language on conflict of interest, to conduct, to protocols on confidentiality, and compliance to the law, the Code of Ethics provides clear and concise to-dos and not-to-dos.
One of the most obvious strength of the Bank's Code of Ethics is the fact that it's written in a clear and concise way, not allowing for confusion or misinterpretation. Concepts are defined, examples are given. The Code not only tells an employee what to do, but also what not do.
The Code's clarity extends to the reasons why certain things are important and why certain values are emphasized, where each chapter is introduced by a quote from senior management that reflects day-to-day, relateable situations that rank and file, employees, staff and executives see on a personal basis.
Also, the Bank of America's Code of Ethics is the product of constant revisions, some routine, while others, involved a more painful process of learning. In 2004, the Bank of America amended its Code of Ethics--specifically language on the prohibition of gifts, hospitality and entertainment, and the confidentiality of information--after settling improper fund trading charges for $375 million (Times of India, 2004).
Other than updates due to external events, the Bank is also open to feedback from its employees by giving specific instructions in the event that they might have questions, concerns. The Bank also provides for anonymous submission of concerns.
So while the times and the environment of the Bank is constantly changing, the people behind the Bank of America Code of Ethics adapt to the times and corrects itself along the way, making sure that its own code of conduct is updated, and relevant.
While basically a code of conduct, more than an operations manual, the Bank's Code of Ethics is mysteriously silent about reporting illegal conduct on the part of its customers.
The Bank's Code do have a section on complying with the law, detailing procedure and protocols against money laundering and certain mutual fund activities. They have have also set guidelines of fair dealing and political contributions. They also have a section on reporting illegal conduct made by its employees. The Bank, however, fails to articulate proper reporting customers and clients, either internally to its officers and management, or externally to the SEC, or any responsible federal/state regulatory or law enforcement agency.
This is alarming in light of the prohibition of the disclosure of information about the customer, associate, supplier, as well as the Bank's own information. Taken together, it may be seen as a covert invitation for "hoods in business suits" to come to the Bank.
The Bank's Code of Ethics is also silent on the punishment system for violations on any provisions in the Code.
* * * The Bank's Code of Ethics presents clear and understandable guidelines for all of its employees to follow. To the employees, it tells them what values the Bank is giving more importance to, it's a standard of behavior set by the management for strict compliance by all its members.
To the Company, it's a way to communicate the ideals and behavior guidelines it wants to implement. It sets out, in writing, the right set of values, along with the right protocols of behavior. It also supplements the company's governance efforts as it puts forward explicit rules, procedures, policies that all helps the Bank and its employees to protect its reputation.
To the public, it communicates that they are dealing with a highly-responsive and highly-respectable institution, to which that they can trust their hard-earned money. It communicates that the Bank has various levels of controls, and that responsibility is shared from the higher-ups to the lower ranks. Moreover, the Bank's Code of Ethics is a good marketing tool, expounding on the integrity and reputation of the Bank.
The Bank's Code of Ethics is a good way to keep everybody on the same page, and they are not unique in implementing such a code as most of companies belonging to the Fortune 500 has a similar tool. The benefits of having a code of ethics are too valuable for any company to ignore.
Bank of America Amends Codes of Ethics. (2004). Times of India. Retrieved on 18 April 2008. <http://timesofindia.indiatimes.com/articleshow/609861.cms> Code of Ethics. (2008). Bank of America. Retrieved on 18 April 2008. <http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-govconduct>