E. CODE OF ETHICS

Some companies include a detailed section of policies relating to business ethics and conduct in a company handbook or manual. This can include, for example, a detailed discussion of anti-trust laws as they pertain to relations with competitors, suppliers, customers, distributors, and international transactions. Ignorance of the law is no excuse and companies must be aware that violations for breach of ethics can be substantial. For example, a violation of many of the anti-trust laws may constitute a criminal offense, subjecting the company to fines up to $1 million, and individual participants to jail sentences up to three years.

TIP: One way to minimize potential problems is to include a section of general legal requirements in the handbook so that employees, particularly those in sales, will understand what they can and cannot do under the law (e.g., that they cannot accept secret gifts or discuss pricing policies with competitors). Schedule an annual one day (or shorter) seminar on ethics for your key executives and managers. Some companies bring in private counsel to discuss recent developments in the laws and cover common areas of confusion.