August | 2012 | On Leadership!

The Ethics Resource Center just published a new study of ethical practices within Fortune 500^® companies. Some of the intriguing findings include:

60% of Fortune 500^® companies had a comprehensive ethics and compliance program as compared to 41% of all companies
16% Fortune 500^® employees felt pressured to compromise job standards, as compared with 13% of all US companies
52% reported misconduct over the past year, compared to 45% of all US companies
- 59% at private companies
- 50% at publicly-traded companies
leadership makes a difference: it is 89% where management has a weak commitment to ethics compared to 48% with a strong management commitment
kickbacks, improper payments, and brides are higher in Fortune 500^® companies as compared to the US average of 10%
- Fortune 500^® companies 13%
- privately-held Fortune 500^® companies 18%
74% of Fortune 500^® company employees formally report misconduct (most often to direct manager). This compares to 65% of all US workers.
- top 3 most reported forms of misconduct include:
  - bribes to clients 79%
  - delivering goods not up to specifications 79%
  - bribes to public officials 77%
- bottom 3 least reported forms of misconduct include:
  - inappropriate social networking 49%
  - internet abuse 42%
  - doing personal business on company time 38%–interestingly this is the most common form of misconduct yet it is not always reported
- 71% who report say that their reports were substantiated by their company

Based on these findings, I believe there are three simple lessons for leaders

establish a strong ethics program and culture–policy, communication, compliance, reporting, and support– in all aspects of the organization; it is a core business function
investigate all reports and treat employees fairly
re-commit to ethical business practices with regards to quality, gifts, and employee relationships

To learn more and get a copy of the report, visit www.ethics.org.

On Leadership!