In the wake of large-scale corporate scandals and frauds like Enron, WorldCom and Volkswagen, a trend of aggressive legal mechanisms regulating the code of conduct of companies has been set in motion in several countries. In India, Clause 49 of the Listing agreement provides for the mandatory requirement of a code of conduct for the board of directors. The purpose of this paper is to analyse the need for a code of conduct in the effective transparency of company policies thus, better corporate governance by making a comparative analysis between provisions given under Sarbanes Oxley Act (US) and Clause 49 of Listing Agreement in India relating to Code of Conduct. The implication of the study showcases the pros and cons as to the flexibility of code of conduct, measures to be taken to induce compliance with provisions of the code. It also suggests as to how regulatory bodies should deal with companies in event of non-compliance by companies.