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CMA Intermediate · Business Laws and Ethics · Business Ethics and Emotional Intelligence

A manufacturing company issues a written document setting out the values it expects all employees to follow and the standards of conduct in dealings with customers, suppliers and colleagues. What is this document generally called?

A written document stating an organisation's values and the standards of conduct expected from employees in dealing with customers, suppliers and colleagues is called a code of ethics or code of conduct. The other documents deal with constitution or public offers, not behaviour.

  1. ACode of ethicsCorrect
  2. BMemorandum of association
  3. CProspectus
  4. DStatement in lieu of prospectus

Explanation

A written statement of an organisation's values and expected standards of behaviour for its people is a code of ethics (code of conduct). The memorandum of association defines the company's constitution and objects, the prospectus invites the public to subscribe to securities, and a statement in lieu of prospectus is a filing by a company that does not issue a prospectus; none of these sets out conduct standards.

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