Code of Ethics

Syllabus: Code of Ethics (UPSC GS IV)
Source: PTI

Context

The Institute of Chartered Accountants of India (ICAI) is revising its Code of Ethics to allow advertising and firm websites. This marks a progressive step towards professional autonomy and modernization of ethical standards in India’s accounting sector.

About the Code of Ethics

Definition:
A Code of Ethics is a formal set of principles that guide professional conduct, ensuring individuals act with honesty, integrity, and accountability. It protects public trust by balancing personal conscience with institutional responsibility.

Purpose:
It helps professionals make morally sound decisions during ethical dilemmas, ensuring credibility, fairness, and respect for public service.

Key Features of a Code of Ethics

1. Defines Mission and Values:
   It expresses an organization’s core mission and ethical vision, turning values into daily professional practice.
2. Outlines Conduct Norms:
   It specifies acceptable and unacceptable behaviour, setting clear moral boundaries that protect professionalism from misuse.
3. Guides Decision-Making:
   Acts as a moral compass in situations where the law is silent, promoting decisions based on conscience and fairness.
4. Encourages Ethical Compliance:
   By embedding transparency and responsibility, it transforms compliance into a value-driven practice.
5. Ensures Accountability:
   It provides a benchmark for evaluating ethical conduct and disciplinary action, making ethics enforceable rather than symbolic.

Types of Codes of Ethics

1. Compliance-Based Code:

• Focuses on legal adherence and procedural discipline.
• Ensures integrity through deterrence, where violations attract penalties.
• Promotes the idea that discipline safeguards morality.

2. Value-Based Code:

• Goes beyond legal obligations to encourage self-governance and moral reflection.
• Emphasizes inner conviction—ethics guided by conscience rather than fear of punishment.

3. Professional Code:

• Applicable to specialized fields such as law, medicine, or accountancy.
• Combines technical competence with moral responsibility.
• Ensures character complements expertise to sustain public trust.

Importance of a Code of Ethics in Public Office

Integrity in Governance:
Ensures that administrative decisions are made ethically, keeping both means and ends pure.

Public Trust and Legitimacy:
Transforms authority into public service.
Example: The Supreme Court’s 2024 verdict on Electoral Bonds reaffirmed that ethical conduct strengthens institutional legitimacy.

Conflict Prevention:
Sets moral limits that deter corruption and misuse of procedural loopholes.

Cultural Standardization:
Creates uniform ethical behaviour across departments.
Example: Mission Karmayogi integrated ethics training across ministries through structured modules.

Accountability Reinforcement:
Turns responsibility into a personal value rather than an externally imposed rule.

Challenges to Implementing a Code of Ethics

• Ambiguity in Interpretation: Vague ethical clauses allow selective enforcement.
• Commercial Pressures: Profit motives often overshadow moral considerations.
  Example: Pharmaceutical marketing scandals revealed how incentives compromised doctors’ ethics.
• Lack of Ethical Education: Without moral training, compliance becomes mechanical.
• Regulatory Overlaps: Multiple oversight bodies cause confusion and weaken accountability.
• Weak Enforcement: Delayed action reduces deterrence, making ethics appear ceremonial.

2nd ARC Recommendations on Code of Ethics

1. Comprehensive Public Service Code:
   Integrate integrity, empathy, and impartiality as core operational virtues.
2. Institutional Ethics Committees:
   Create ethics cells to guide officers during real-time ethical dilemmas.
3. Mandatory Ethics Training:
   Conduct regular modules to turn ethical understanding into daily habit.
   Example: LBSNAA’s GYAN LMS trains probationers through scenario-based simulations.
4. Ethical Appraisal Systems:
   Evaluate officers not just for efficiency but for integrity.
   Example: The CVC’s Integrity Index Rating links promotions to ethical conduct.
5. Legal Empowerment:
   Strengthen legal backing so that ethical violations carry enforceable consequences.

Conclusion

ICAI’s reform reflects a national transition from rule-based compliance to virtue-based professionalism. By institutionalising ethics through law, education, and policy, India is building a culture where trust becomes the currency of governance. True integrity, as Aristotle said, is not a single act but a consistent habit—an essential trait for a responsible and ethical public life.