Category: Ethics and Conduct

Values Statement

Also known as: Value Statement, Statement of Values, Core Values Statement

Simply put

A values statement is a short, written set of principles that describe an organization's core beliefs and how it expects people to behave, make decisions, and treat one another. It is intended to inform and guide the conduct of employees and to communicate the organization's priorities to stakeholders such as customers and staff. It expresses aspirations and philosophical ideals rather than setting out specific rules or legal obligations.

Formal definition

A values statement is a concise declaration of an organization's core principles and guiding beliefs, used to inform and shape decision-making and behavior across the entity, including under pressure. It typically functions as a normative reference point, often described as a moral or philosophical foundation, rather than as a binding legal requirement, and it is generally distinguished from an organization's mission statement (its purpose) and vision statement (its aspirational future state). As an aspirational governance artifact, a values statement is voluntary in most contexts and derives its practical force from how consistently it is embedded, reinforced, and reflected in conduct; on its own it is not a control, a compliance obligation, or evidence of operating effectiveness. Its specific content, adoption, and use vary by organization, sector, and jurisdiction.

Why it matters

A values statement matters because it articulates the core beliefs and guiding principles an organization uses to inform decisions and behavior, including under pressure. In governance terms, it can serve as a normative reference point, often described as a moral or philosophical foundation, that helps align conduct across an entity and communicate priorities to stakeholders such as customers and employees. When consistently embedded and reinforced, it can shape the culture within which controls, risk management, and compliance activities operate.

At the same time, its significance should not be overstated. A values statement is generally voluntary and aspirational rather than a binding legal requirement, and it is not itself a control, a compliance obligation, or evidence that controls are operating effectively. Its practical force depends on how consistently it is reflected in actual behavior and decision-making rather than on the document alone. Boards, management, and assurance functions should be careful to distinguish a stated value from a demonstrated one; a gap between the two can signal culture risk even where the written statement is well drafted.

Because its content, adoption, and use vary by organization, sector, and jurisdiction, a values statement is best understood as one input among many. It typically complements, but does not substitute for, codes of conduct, policies, and the substantive controls and monitoring that address legal and regulatory requirements.

Who it's relevant to

Boards and their committees

Boards typically set and oversee the tone at the top, and a values statement can be one expression of the organization's intended culture and priorities. Directors are generally concerned with whether stated values are genuinely embedded and reflected in behavior, as opposed to remaining a document with no operational effect. This is an oversight interest rather than a duty to draft or operationalize the statement itself.

Management

Management generally owns the development, communication, and day-to-day reinforcement of a values statement, and connects it to related instruments such as codes of conduct and policies. Because the statement derives its force from consistent conduct, management is typically responsible for how it informs decisions and behavior across the organization.

Compliance and ethics functions

Compliance and ethics professionals may reference a values statement as part of the broader culture and conduct environment. It is important to note that the statement is aspirational and not itself a control or compliance obligation; these functions still rely on codes, policies, and substantive monitoring to address binding legal and regulatory requirements.

Internal audit and assurance functions

Assurance functions may consider whether an organization's stated values are reflected in actual conduct, treating any gap as a potential indicator of culture risk. A values statement on its own is not evidence of control design or operating effectiveness, so it should not be relied upon as assurance without corroborating evidence of behavior.

Employees and external stakeholders

A values statement is intended to inform and guide the conduct of employees and to communicate the organization's priorities to stakeholders such as customers and staff. Its usefulness to these audiences depends on how consistently the organization actually behaves in line with the stated principles.

Inside Values Statement

Core Values

A concise set of guiding principles, such as integrity, accountability, respect, or transparency, that articulate the behaviors and standards an organization expects of its directors, officers, and employees. These are typically aspirational statements rather than binding legal obligations.

Behavioral Expectations

Descriptions of how the stated values are intended to translate into day-to-day conduct and decision-making. This element connects abstract principles to observable actions, though the specificity varies widely by organization.

Relationship to Culture and Tone at the Top

Language linking the values to the organization's ethical culture and to the tone set by the board and senior management. A values statement is generally one input into culture, not a guarantee of it.

Connection to Codes and Policies

A reference point that often informs, but is distinct from, a code of conduct, ethics policy, or compliance program. The values statement typically expresses principles, while codes and policies set out more specific, sometimes enforceable, rules.

Stakeholder Orientation

Statements reflecting the organization's intended commitments to stakeholders such as shareholders, employees, customers, and the community. The scope and emphasis depend on the entity type, sector, and governance philosophy.

Common questions

Answers to the questions practitioners most commonly ask about Values Statement.

Is a values statement the same as a code of conduct?

No. A values statement articulates the principles and behavioral aspirations an organization considers important, whereas a code of conduct typically translates those principles into specific, enforceable rules and expectations governing employee behavior. The values statement is generally aspirational and non-binding, while a code of conduct often carries disciplinary consequences and may reference legal and regulatory obligations. The two are complementary: values frequently inform the drafting of a code, but they are distinct documents serving different purposes, and neither is a substitute for the other.

Does adopting a values statement satisfy an organization's compliance obligations?

Generally, no. A values statement is typically a voluntary expression of organizational culture rather than a legal requirement, and its existence alone does not demonstrate compliance with statutes, regulations, or listing rules. Compliance obligations are usually met through specific controls, policies, monitoring, and documented processes owned by the compliance function, not through aspirational statements. A values statement may support an ethical culture that reinforces compliance efforts, but it should not be treated as evidence of compliance in itself. Requirements vary by jurisdiction, sector, and entity type.

Who is typically responsible for developing and approving a values statement?

Practice varies by organization, but development is often led by management, frequently with input from employees and other stakeholders to promote relevance and buy-in. The board or a relevant committee commonly reviews and endorses the statement as part of its oversight of organizational culture and tone at the top, while management generally retains responsibility for embedding and operationalizing the values day to day. The specific allocation depends on the entity's governance structure and should be defined so that oversight and operational roles remain distinct.

How can an organization embed a values statement so it influences behavior rather than remaining symbolic?

Embedding typically involves integrating the values into practical mechanisms such as recruitment and onboarding, performance and reward frameworks, decision-making processes, training, and internal communications. Consistent modeling of the values by senior leadership and the board is generally considered important to credibility. Alignment between stated values and actual practices, including how the organization responds when values are tested, tends to determine whether the statement shapes behavior. The appropriate approach depends on the organization's size, sector, and culture, and is a matter for professional judgment.

How should the effectiveness of a values statement be monitored or measured?

Measurement is generally indirect, since values are difficult to quantify directly. Organizations commonly rely on indicators such as employee engagement or culture surveys, whistleblowing and grievance patterns, exit interview themes, and behavioral observations, interpreted together rather than in isolation. Assurance functions may assess whether the values are reflected in policies and practices as part of broader culture-related reviews. Any such indicators should be understood as proxies with limitations, and their selection depends on organizational context and available data.

How often should a values statement be reviewed and updated?

There is no universal requirement governing review frequency; it is generally a matter of good practice and judgment. Many organizations review their values periodically or when significant change occurs, such as mergers, restructuring, shifts in strategy, or events that test the organization's culture. Overly frequent changes can undermine the perceived stability and authenticity of the values, so reviews are often balanced against the need for consistency. The appropriate cadence depends on the organization's circumstances and governance arrangements.

Common misconceptions

A values statement is legally binding and creates enforceable obligations.

A values statement is generally a voluntary, aspirational document rather than binding law. Enforceable obligations typically arise from statutes, regulations, listing rules, contracts, or specific policies and codes, not from the values statement itself, though in some circumstances stated commitments can inform legal or reputational expectations.

Having a values statement demonstrates that an organization has a strong ethical culture and effective compliance.

A written statement is a design element, not evidence of operating effectiveness. Culture and compliance depend on how values are embedded, reinforced, and monitored in practice. A statement can exist alongside significant conduct or control weaknesses if it is not operationalized.

Approving and publishing the values statement is a management task with no board involvement.

While management typically drafts and operationalizes the statement, the board (often through the full board or a relevant committee) commonly holds an oversight role in setting tone at the top and reviewing the organization's values and culture. The precise allocation depends on the entity's governance structure.

Best practices

Clarify the document's status by distinguishing the aspirational values statement from binding policies, the code of conduct, and legal or regulatory requirements, so readers understand what is enforceable and what is guiding.

Assign clear ownership: have management responsible for drafting and embedding the values in operations, and the board or an appropriate committee responsible for overseeing tone at the top and periodically reviewing the values.

Connect stated values to concrete behavioral expectations and to related policies and controls, rather than leaving them as abstract principles disconnected from day-to-day decision-making.

Periodically review the values statement to confirm it remains aligned with the organization's strategy, stakeholder commitments, and the requirements applicable to its jurisdiction, sector, and entity type.

Seek evidence that values are operationalized, through training, communication, and monitoring, recognizing that a published statement alone does not establish culture or compliance effectiveness.

Tailor the statement to the organization's actual context and avoid overstating commitments the entity is not prepared to support, since gaps between stated values and observed conduct can carry reputational and, in some circumstances, legal consequences.