Following our recent networking event at the Tokyo American Club with a host of Japanese ethics and compliance professionals, we received a number of thoughtful questions about codes of conduct, global enforcement cultures, and practical governance challenges. We did not have time to answer them all live, so Dean Rogers, LRN’s Senior Vice President for APAC, sat down with Ty Francis MBE, LRN’s Executive Team Member and Chief Advisory Officer to pose them again for this written Q&A.
Q1 - Dean Rogers
How far should companies go in requiring suppliers and business partners to meet the same ethical and compliance standards as their own?
Ty Francis MBE:
You should expect suppliers to meet the same principles, even if not always the same policies. What matters is alignment on values and outcomes. The 2025 Code of Conduct Report shows that third-party management now appears in over 80% of leading codes and continues to grow as a risk topic.
A strong approach includes three practical steps:
- Define non-negotiables.
Fraud, bribery, human rights protections, data handling, and anti-retaliation expectations should always apply to partners. - Tier and tailor expectations.
A small logistics provider will need different documentation than a multinational distributor. Align expectations proportionately to risk. - Build monitoring into the relationship.
Regular attestations, periodic training access is always advised. Solutions like LRN’s Catalyst Supplier, our new management platform designed to help companies train and manage their third-party suppliers, can deploy your code of conduct and ethics training, and includes features for supplier registration, onboarding, customized training, and reporting to help companies meet new regulatory requirements related to supply chain risk management. Ensure you maintain clear reporting channels strengthen cultural alignment. Consider giving key suppliers access to your helpline or a parallel mechanism.
This is not about forcing your code onto others. It is about ensuring that conduct across the value chain supports your brand, your legal requirements, and your culture.
Q2 - Dean Rogers
Can you share an example of an ideal Code of Conduct that reflects the eight key components?
Ty Francis MBE:
The most effective codes incorporate all eight dimensions of our framework: tone from the top, values, applicability, speaking up, risk topics, knowledge reinforcement, usability, and design.
Several examples in the report illustrate this well:
- Tone from the Top: Sony's code features a leader message that integrates company values directly on the same page, reinforcing what the company stands for.
- Purpose & Values Orientation: Shionogi Group's values are clearly stated, and the code includes behaviors that support those values.
- Speaking Up: Howard Hughes' reporting procedures are clearly outlined, confidentiality and anonymity are covered, and multiple resources are provided for reporters.
- Risk Topics: PG&E's risk topics are listed and grouped logically, with emerging risks like AI included to keep content relevant and timely.
- Knowledge Reinforcement: Western Union's code uses callout boxes for definitions, links to policies, and “Do’s and Don’ts” that connect behavior to real scenarios.
- Usability: Persol Group's code is web-based and interactive, accessible from any device, and provides analytics on user engagement.
- Look & Feel: Electronic Arts' visual design uses brand elements to grab attention and reinforce ethical principles.
These examples illustrate how leading organizations operationalize each dimension to create effective, engaging, and practical codes of conduct
The ideal code is not the longest or most detailed. It is the one employees can actually use, understand, and navigate at the moment of decision.
Q3 - Dean Rogers
What tangible business benefits come from improving a Code of Conduct, especially for a privately held company?
Ty Francis MBE:
Privately held companies often underestimate the strategic value of a modern code. Three benefits stand out to me.
First would be risk reduction and better decision-making. Employees increasingly rely on the code as a resource. Only 49% of employees in Japan say they have used their company’s code of conduct as a resource, compared to 70% of the global respondents. This points to the need for Japanese companies to position their codes as useful resources for employees and to communicate why they should do this and how they can easily access the code. Better engagement means fewer surprises.
Second would be Investor and customer confidence. Even private firms are evaluated by stakeholders, regulators, and supply chain partners. A high-quality code signals maturity and reliability.
Finally, cultural cohesion and operational consistency. Japanese companies particularly value harmony and clarity. A well-designed code becomes a shared reference point that strengthens decision-making across business units.
A modern code is a business asset. It supports performance, protects the brand, and prepares the company for future growth or even a future IPO.
Q4 - Dean Rogers
Japan often relies on work rules for enforcement rather than Codes of Conduct. How can Japanese companies ensure their codes feel useful, not symbolic?
Ty Francis MBE:
This is a common challenge. Work rules in Japan are legally binding, so employees often see the code as secondary. The solution is to differentiate purpose. But work rules tell people what they must do... a good code explains why the organization acts the way it does, and how to exercise judgment.
The 2025 Code of Conduct Report shows that usability features like policy links, decision-making models, and resources highlighted in the code all increased in prevalence. These features help a code function as a practical tool rather than a compliance document.
I'd recommend starting small with maybe three approaches that I think would work well in Japan.
Use scenarios. Scenario usage remains low globally at 30%, but it is one of the most effective tools for Japanese employees, who prefer context-driven guidance. Next would be to integrate the code into manager communications. Middle management communication is a global weakness, with only 53% of frontline workers hearing about the code from their manager. Improving manager engagement is key in Japan’s hierarchical culture.
Then, I would recommend tying the code to purpose and values, not rules. This elevates the code to a cultural guide, helping employees navigate situations where work rules alone do not provide clarity.
Q5 - Dean Rogers
Boards In Japan often approve the code, making updates slow. How do we balance the need for agility with governance.
Ty Francis MBE:
The best approach is to separate content governance from content maintenance. The board approves the foundational elements: purpose, values, and core commitments. Management maintains the operational elements: emerging risks, new laws, updated examples, and resource information.
The 2025 global data shows that 45% of companies now update their codes annually in some way, whether that’s their CEO message or adding new policies like AI or updates to whistleblower laws. That trend is rising because risks change faster than board cycles. You can preserve governance integrity and still move quickly by adopting.
A modular code structure with sections like AI, data risk, and reporting mechanisms can be updated regularly without board-level reapproval. Board should be nose in fingers out.
32% of companies globally now use digital or web-based codes. This allows for real-time updates while keeping core principles stable. Some companies make use of a clear governance charter. This is usually a document used when board approval is required and allows management to update content independently.
Q6 - Dean Rogers
How do large companies integrate regulatory compliance areas (product, ESG, trade) with ethics and culture programs? What governance models prevent silos?
Ty Francis MBE:
Mature organizations move from parallel programs to integrated governance grounded in shared values. The eight dimensions of an effective code offer a unifying structure. Three models work particularly well:
- A cross-functional ethics steering committee. Representatives from legal, HR, ESG, product, compliance, operations, and risk meet regularly to ensure alignment. This model ensures consistent messaging, common definitions, and shared data.
- A single enterprise code of conduct Instead of separate codes for product compliance, ESG, and trade, a unified code defines the principles, and specialist policies sit underneath.
- Data-driven prioritization. Leading companies use analytics from training engagement, helpline trends, and code usage. With more organizations offering web-based codes, analytics become central to managing risk holistically.
We should reinforce that using data analytics isn’t just about measuring activity, it’s about measuring outcomes. collecting “100% completion data is now table stakes. It’s the bare minimum.
Also, integration is not about consolidation. It is about coherence. When employees hear one ethical voice instead of five, compliance becomes part of how the company operates, not another checklist.
Q7 - Dean Rogers
What should global companies keep in mind when aligning their code to ethical principles and external standards (for example RBA) without creating double standards?
Ty Francis MBE:
The key is to anchor everything in your values and purpose, then align external frameworks beneath them.
Start with three questions:
1. What ethical commitments define us, regardless of geography? Values transcend borders. They should drive your expectations everywhere.
2. Where do external standards supplement our commitments? RBA, UNGP, and customer-driven requirements should reinforce your values, not replace them.
3. Can employees clearly see how external expectations map to our internal ones? Crosswalks, scenario examples, and simplified policy links help prevent contradictions.
The Code of Conduct Report highlights that purpose and values orientation is one of the eight defining dimensions of effectiveness. Codes that start with values avoid the trap of inconsistent regional expectations.
A few practical tips. Use a single global code with local addenda for legal variations. Avoid tightening standards only for certain regions or suppliers. Explain the why when introducing external frameworks so employees understand the principle behind the rule.
Consistency builds trust. And trust builds ethical culture.
Q8 - Dean Rogers
Could you give our attendees some final thoughts?
Ty Francis MBE:
Modern codes of conduct are no longer static documents. They are practical tools that help people make better decisions in real time. The shift we see globally is clear: companies that treat their code as an operating guide, not a legal manual, see stronger engagement, better culture, and fewer incidents.
Thank you to everyone in Tokyo who joined us and submitted such thoughtful questions. We hope this extended Q&A serves as a useful reference as you continue to evolve your programs. If you would like a follow-up session with Dean and his team, they would be delighted to continue the conversation. And I look forward to seeing you all during my next trip in the New Year.
