A code of ethics is a set of principles to guide a nonprofit organization’s decision making and activities, as well as the behavior of its employees, volunteers, and board members. The purpose of adopting a formal code is to provide employees, volunteers and board members with guidelines for making ethical choices in the conduct of their work on behalf of the organization. Honesty, integrity, and fair practices create a solid foundation that earns the public’s trust. A code of ethics is the expression of that solid foundation. When board members of a nonprofit adopt a code of ethics, they are expressing their commitment to ethical behavior. 
Resources and Sample Documents
National Council of Nonprofits: Ethics and Accountability in the Nonprofit Sector
National Council of Nonprofits: Conducting an Ethics Audit at Your Nonprofit
National Council of Nonprofits: Does your nonprofit need a code of ethics?
Guidestar: How Ethical Is Your Nonprofit?
Association of Fundraising Professionals (AFP): Guidelines, Codes, Standards
Independent Sector: Principles for Good Governance and Ethical Practice Resource Center
Nonprofit Quarterly: Nonprofit Accountability and Ethics: Rotting from the Head Down October 26, 2012
Stanford Social Innovation Review: Ethics & Nonprofits Summer 2009
National Council of Nonprofits: Ethical Leadership