Recent headlines about the Coldplay “Kiss Cam” incident and the Nestlé executive affair have sparked questions about how much an organization can (or wants to) protect its reputation when its leaders’ personal actions become public. For nonprofits, where trust and mission alignment are essential, this conversation is not just a matter of interest, but a crucial aspect of organizational management.
One question many boards and HR leaders are asking:
Does it make sense to require a morals clause for the CEO or executive team, or would a professionalism policy provide better protection? To answer that, it is helpful to understand what each approach entails and how it differs from a standard code of conduct.
What a Morals Clause Does
A morals clause is a contractual agreement, usually found in an executive’s employment contract, that allows the organization to take action, including termination, if the individual’s personal behavior damages the organization’s reputation or contradicts its values.
- Scope: Often broad, covering both personal and professional conduct.
- Trigger: Actions that bring public scandal, harm the brand, or conflict with the nonprofit’s mission.
- Enforcement: Usually tied to a contract; HR and legal counsel must define what qualifies as “moral violations” and what remedies exist.
These clauses are standard in entertainment and sports and are not commonly used in nonprofits. When they do appear, they are typically reserved for the CEO, president, or high-visibility spokesperson roles.
What a Professionalism Policy Covers
A professionalism policy is an internal organizational guideline (not a personal contract) that defines behavioral expectations for all employees, including leaders.
- Focus: Maintaining respectful, ethical, and mission-aligned conduct at work and in work-related settings.
- Trigger: Behavior that disrupts the workplace, undermines trust, or conflicts with organizational values.
- Enforcement: Tied to disciplinary processes and employee handbooks; apply broadly rather than to a single contract.
Professionalism policies, being easier to implement across an organization, provide a practical and comprehensive solution. They may be considered for inclusion in an employee handbook or leadership handbook, setting clear expectations about how personal decisions and public actions affect the workplace and instilling a sense of reassurance and confidence in the workforce.
How a Code of Conduct Differs
A code of conduct is a foundational policy that outlines the organization’s ethical and behavioral standards. It often includes:
- Compliance with laws and regulations
- Conflicts of interest
- Confidentiality
- Proper use of organizational resources
- Standards for respectful, inclusive treatment of others
The difference:
- A code of conduct is typically legal and compliance-driven, covering all employees.
- A professionalism policy adds practical behavioral expectations and tone.
- A morals clause is a contractual safeguard for an individual executive.
What About HR Executives?
HR executives, while sometimes not as publicly visible as CEOs, except in these two public incidents, play a crucial role in representing the organization’s integrity and setting the tone for workplace culture. Their management of compliance, employee relations, and risk mitigation is integral to the organization’s functioning, and their credibility is critical. Their conduct, therefore, must align with the organization’s values to maintain trust and confidence across the entire workforce.
For this reason, many organizations hold HR leaders to the same behavioral standards as the CEO and other top executives. In some cases, a morals clause in the HR executive’s contract or a clearly worded professionalism policy can provide the organization with needed protection and reinforce the expectation that HR leadership must model ethical and mission-aligned behavior.
Key Considerations for Nonprofits
- Reputation and Funding: Donors, members, and community partners expect nonprofit leaders to embody organizational values.
- Mission Alignment: A clear professionalism policy can help employees — including executives and HR leadership — understand that personal actions may have organizational impact.
- Enforceability: A morals clause requires precise legal language and careful negotiation; it is best handled with employment counsel.
- Consistency: If you adopt a morals clause for leadership, ensure internal policies explain how the organization holds all employees accountable to core values.
A Balanced Approach
- Code of Conduct: Foundation for everyone.
- Professionalism Policy: Adds clear, culture-specific expectations and behavioral guardrails.
- Morals Clause: Extra protection when a single leader’s personal actions could seriously harm the mission or reputation.
Nonprofits that combine these tools set clear expectations, protect their culture, and reinforce trust, especially when their CEO, HR executive, or other high-profile leaders represent the mission to the public.
If you have any HR questions or concerns, please contact us at HRServices@501c.com or (800) 358-2163.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.
(Images by The Yuriarcurs Collection and Billion Photos)
