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ACCA Applied Knowledge · Business and Technology · Corporate codes of ethics

Which of the following is a benefit to a company of having a published corporate code of ethics?

A published code of ethics sets out clear standards of expected behaviour and so helps build trust with stakeholders. It cannot guarantee ethical conduct, replace legal requirements, or ensure higher profits, which are overstated claims.

  1. AIt guarantees that no employee will ever act unethically
  2. BIt sets out clear expected standards of behaviour, helping to build trust with stakeholdersCorrect
  3. CIt removes the need for any laws or regulations to apply to the company
  4. DIt ensures the company will always earn higher profits than its competitors

Explanation

A published code communicates the standards expected of staff and shows stakeholders the company's commitment to ethical conduct, which builds trust. It cannot guarantee behaviour, replace the law, or ensure higher profits, so the other options overstate what a code achieves.

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