Final answer:
A code of ethics applies to individuals within an organization, including the board of directors, executives, and employees, but not directly to users of the product or service. It guides professional conduct to align with both legal and ethical standards and reflects corporate responsibility and governance.
Step-by-step explanation:
A code of ethics applies principally to the individuals within the organization, which includes the board of directors, executives, and employees. It is designed to guide their professional conduct, ensuring that their actions align with both the legal standards and the ethical expectations of their roles within the business. Users of products or services are typically bound by terms of service or use policies, which are separate from an organization's internal code of ethics.
Organizations across various sectors, including corporate responsibility, technology, engineering, and professional services, establish codes of ethics to preserve the integrity of their industry, support sustainable practices, and uphold the reputation of their profession. For example, the IEC Software Engineering Code of Ethics and Professional Practice mandates software engineers to produce software that is safe and respectful of user privacy and environmental impacts, highlighting the extensive reach and importance of ethical commitments in professional settings.
The code of ethics not only affects the actions of employees but also has implications for the wider corporate governance as it influences the decision-making of the board of directors, reflecting the interests of shareholders and stakeholders.