Fewer are behaving badly at work, survey finds. What changed?
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Elizabeth Barber Staff writer
Observed misconduct in American workplaces is at its lowest point in almost two decades, an achievement that appears to be related to companies鈥� increasing investment in ethics and compliance initiatives.
A survey of about 6,400 part- and full-time workers in the for-profit sector found that 41 percent had observed misconduct in their offices last year, according to The Ethics Resource Center (ERC), a Virginia-based nonprofit that released its report this month. That鈥檚 an all-time low for the eight times the report has been conducted since 1994, down from 45 percent in 2011 and 55 percent at the highest point six years ago.
鈥淢ore companies have done what they need to do,鈥� says Patricia Harned, president of the ERC.
The report queried respondents about 26 types of misconduct, including fabricating financial data, sexual harassment, lying to employees, and bribing public officials.听
For the third year now, the decline in bad behavior continued, despite an economic rebound. That bucks a long-term trend in the survey data suggesting that when the stock market is up, so, too, are sightings of crooked practices, as companies or employees angle after even bigger rewards.
鈥淭his was very different from what we expected,鈥� says Dr. Harned.
So, how to explain the more ethical doings, even as the economy recovers? A possible explanation is that more companies are implementing ethics and compliance programs, which monitor a company鈥檚 ethical behavior and train employees in good practices.
Some 81 percent of companies now have such programs, according to the report, up from 74 percent two years earlier.
That uptick could be attributed in part to the federal government鈥檚 promise that companies with strong ethics and compliance programs will receive some leniency if accused of wrongdoing. In 2012, in what was a landmark case for such programs, investigators declined to charge Morgan Stanley for a managing director鈥檚 criminal activities, saying the financial heavyweight had done what it could to guard against rogue employee misdeeds.
鈥淪mart business people are starting to notice听that there is a return on their investment in ethics and compliance programs,鈥澨齭ays Tim Mazur, chief operating officer of the Ethics and Compliance Officer Association, based in Waltham, Mass.
Of course, just having an ethics and compliance program is not enough 鈥� such programs can be little more than varnish to otherwise seedy operations.
鈥淚t takes a little bit more work than an ethics and compliance program,鈥� says David Mayer, a professor at the University of Michigan鈥檚 Ross School of Business and a researcher at EthicalSystems.Org, an online hub founded last month to help businesses bolster their ethical performance.听
That additional work includes ensuring that such programs are 鈥渆mbedded within an ethical culture,鈥� says Dr. Mayer. To do so, companies must prioritize ethics, hiring and promoting ethical employees, he says.
The ethics and compliance program鈥檚 status within the organization can also weigh into the office's ethics culture.
鈥淭he positioning of the office is important,鈥� says Lorraine D'Angelo, senior vice president for ethics and compliance at Dragados USA, a construction contractor in Costa Mesa, Calif.
Her office, founded in 2008, reports to Dragados鈥檚 president and has access to the board of directors. Not all such programs have that leverage, reporting instead to lower-level departments.
鈥淥nce you get that status, and people know it鈥檚 supported by the management, then people get the message and things start to change,鈥� she says.
Data from the report suggest that positive revisions in office ethics cultures are both occurring and significant. Some 66 percent of workplace cultures rate as ethical, versus 60 percent in 2011, the report found. In companies with poor ethics cultures, 88 percent of workers observed unethical practices, compared with 20 percent of workers in companies with strong ethical cultures.
The report also found that, of the employees who were aware of just 鈥渟ome鈥� of their company鈥檚 ethics and compliance program resources, half had seen misconduct. But of those who were aware of 鈥渁ll鈥� those resources, that number dropped to 40 percent.
Still, there is room for improvement. The share of workers who actually reported the misconduct in their offices to either internal or external officers was just 63 percent, down from 65 percent in 2011.
And, in a possibly related finding, 21 percent of workers say they experienced retaliation for reporting workplace wrongdoing, barely changed from 22 percent in 2011.
In addition, some 60 percent of observed misconduct involved someone with managerial authority, a sign that it may be even harder to root out. One-quarter of the misconduct was also identified as ongoing, not just a single incident, according to the report.
鈥滿isconduct isn鈥檛 happening as much,鈥� says Harned, 鈥渂ut, where it is happening, it鈥檚 very worrisome.鈥�
