National Ethics Report: Have we turned a corner?

Every two years, the Ethics Resource Center releases their latest national survey on the state of ethics in the US.  There are indications that we may have permanently turned the corner on misconduct related to unethical behavior.  Yet, there is still work to be done on retaliation as it remains at a high level.

Perhaps the message is simple:  Continue to focus on ethical behavior while increasing efforts on creating ways for people to report ethical issues in an environment free from retaliation.

Or, even better yet as a client put it:  “Don’t let up on the gas pedal.  And watch your dashboard more often–trusting warning lights when they light.”

I encourage you to read the entire report.  The following are highlights:

Misconduct witnessed by U.S. workers is now at historic lows (41% report observing some form of ethical misconduct), and it is down in all categories including the pressure to compromise standards.

  • 2000: 55%
  • 2003:  46%
  • 2005:  52%
  • 2007:  57%
  • 2009:  49%
  • 2011:  45%
  • 2013:  41%

24% report misdeeds are committed by senior management (C-level, VP)

63% report some form of questionable misconduct, boarding on unethical behavior (slightly down from past surveys):

  • 26% report misconduct is ongoing in their organization—is routine
  • 12% report wrongdoing is essentially company-wide and known

Retaliation against employee whistleblowers continues to be high at 22%–that equates to 6.2 Americans (based on Bureau of Labor Statistics population numbers)

  • 69% supervisor intentionally ignored or treated differently  (new this survey; all others were down)
  • 59% got ‘cold shoulder’ from other employees
  • 54% were excluded by manager/supervisor from decisions/discussions
  • 49% were verbally abused by manager/supervisor
  • 47% promotion or raise was not given
  • 43% were verbally abused by co-workers
  • 38% almost lost their job
  • 33% experience some form of harassment either online or at their home
  • 29% hours or pay were cut

Training and awareness seem to work (these percentages are at their highest)

  • 81% provide ethics training
  • 67% include it in performance measurements
  • 74% communicate wrongdoing internally
  • 2/3 have positive ethics cultures with strong policies, enforcement, and communication and there is a 60-percentage point difference in companies with weak-to-strong cultures

Top 5 observable misconduct (all represent a decrease from previous surveys):

  • Abusive or intimidating behavior 18%
  • Lying 17%
  • Conflict of interest 12%
  • Violating company internet use policies 12%
  • Discrimination 12%
  • One area was new to the report:  falsifying invoices, books, records  at 4% reporting it

What gets reported varies from the above list.  These represent those ethical issues which actually get reported formally in the organization.  Note that the first 4 represent a decrease while the last two represent an increase from previous surveys:

  • Inappropriate gifts or kickbacks 36%
  • Violating company internet use policies 37%
  • Lying 38%
  • Improper hiring procedures 39%
  • Falsifying invoice, books, records 40%
  • Violating contract terms with customers or suppliers 59%

The majority of reporting is done through internal channels.  Only 20% report through an external channel such as a third-party agency or department–usually a governmental or regulatory agency.  Internally, people report to:

  • Person’s supervisor 82%
  • Upper management 52%
  • HR 32%
  • Ethics office 15%
  • Legal 11%


© Copyright 2014, Dynamic Growth Strategies.  All rights reserved.

Whistleblower, Traitor, Hero, Scoundrel

So what do you think of Snowden?

Whistleblower, Traitor, Hero, or Scoundrel?

This current situation seems so easy, right?  And, of course, not to mention the emotional fervor it has created among those who might say “whistleblower and hero” or those who say “traitor and scoundrel”.

Oh but that is government and politics.  It will never happen to any of us.

Yet, today nearly half (45%) of us observe some form of ethical wrongdoing in our workplace or even in our volunteer work, social organizations, or religious institutions.  This can take the form of stealing, harassment, abusive behavior, poor quality, lying, or other nefarious activities.

The good news is that such problems will be reported by two-thirds (65%) who see it.  And guys, we have some work to do.  Women report it more often than men.

Of those who report, most often it is reported to their direct manager or supervisor.  In other cases, it is reported to a senior manager.  This accounts for 66% of all reports.  Clearly, those in leadership and management positions have both a responsibility to act as well as a responsibility to enforce.

So what gets reported?  The following scenarios are reported most often:

  • sexual harassment
  • theft, stealing
  • abusive behavior
  • health violations
  • poor quality
  • substance abuse

Do those who report receive a parade, plaque, or platitudes from leadership?

Well, guess what.  Sometimes leadership and co-workers, instead, retaliate by excluding the person from work assignments, activities and decisions.  It can even lead to verbal abuse and threats of job loss.  Does this happen often?  Studies show that 22% report some form of retaliation.

Ok, so what can leaders do?

Encourage reporting.  Investigate appropriately, objectively, and thoroughly.  Avoid retaliation, even protecting people from it.

But perhaps the most important thing leaders can do is to create an environment and culture that operates ethically—one that includes mechanisms to report without retribution.


© Copyright 2013, Dynamic Growth Strategies.  All rights reserved.

Fortune 500® Companies: A Special Report on Ethical 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

  1. 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 

  2. investigate all reports and treat employees fairly

  3. 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

© Copyright 2012, Dynamic Growth Strategies.  All rights reserved. 

World’s Most Ethical Companies 2012 List

Congratulations to those companies recently recognized by Ethisphere as among the most ethical companies in the world.  To read the full list, click here.  (And congratulations to two companies we have worked with for making the list–Microsoft and Texas Instruments.)

You may also want to browse through their website as there is some useful information and resources.

2011 National Ethics Report: Implications for Leaders

Last week the biennial National Ethics Report was released by the Ethics Resource Center.  To get your own (free) copy, go to

This thorough and enlightening report details the current trends and factors forming our ethical work culture.  There are some intriguing findings, particularly for leaders:

Key Findings

  • Misconduct witnessed by U.S. workers is now at historic lows (45% report observing some form of ethical misconduct), while reporting of misconduct is now at near record highs (65%).

  • Retaliation against employee whistleblowers rose sharply to 22% (compared with 15% in ’09 and 12% in ’07).  When you tie this to the above-mentioned increase in reporting, there are clear implications for leaders and their organizations.

  • The percentage of employees who perceived pressure to compromise standards in order to do their jobs climbed five points from 2009 to 13 percent.

  • Two influences stood out in the unusual shift in trends: the economy and the unique experiences of those actively using social networking at work.

    • 34% say management watches more closely

    • 34% also have a negative view of their supervisor’s ethics (highest in 11 years)

    • 42% report there is a raised awareness about ethics in their organization

    • 30% say that offenders are laying-low until the economy improves

    • 50% of active social networkers report keeping a copy of a confidential document for their next job

    • 50% of active social networkers upload personal pictures on company time using company networks/servers

    • 46% of active social networkers copy software for use on a personal computer

    • 32% of active social networkers feel more pressure to compromise ethical standards

The Ethical Leader

In today’s competitive climate, the need for ethical leadership is stronger than it has been since the Enron-Andersen scandal over a decade ago. 

From the boardroom to politics to government to the sports arena, we are bombarded with examples of leaders who choose to make an ‘easy’ decision rather than the ‘right’ decision.  Often they claim that they technically did nothing wrong.  Yet, ethically they are guilty.

In the tough and competitive times we are in, leaders are tempted to explore all opportunities to increase efficiency and higher profitability.  True leaders, however, will keep in mind the following ethical principles.  Doing so, they will ensure they maintain an ethical culture while providing exemplary leadership.

  1. Examine all elements of your organization’s climate and put safeguards in place for strict policy adherence.

  2. When communicating policies, don’t just print, post, and pray that everyone will follow them.

  3. Build ethical conduct into corporate systems and processes.

  4. Be explicit in expectations.  Don’t leave room for assumptions in critical matters.

  5. Build a robust ethics infrastructure that is self-sustaining.

  6. Publicly commit to being an ethical organization.

  7. Publish your Code of Conduct. 

  8. Separate auditing from other functions.  Independent investigation is key.

  9. Talk with employees at all levels– often. Keep the lines of communication open.

  10. Create mechanisms for reporting suspected violations and suspicious activity.  Protect whistleblowers.

  11. Establish an Ethics Officer/Committee to constantly keep the organization focused and aligned with local, industry, and federal guidelines.

  12. Live your corporate values every day.  Lead by example.

The above is adapted from Business Ethics:  Going Away or Awry, a program we’ve delivered for nearly 9 years for companies, nonprofits, and educational institutions.  It’s based on our own experiences as well as the research from the Ethics Resource Center.


© Copyright 2011, Dynamic Growth Strategies.  All rights reserved.