Ethical Misconduct

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Ethical misconduct prevalent in workplace
Internal Auditor, Dec, 2005 by A. Millage
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DESPITE AN INCREASE IN the number of formal ethics programs in the workplace, ethical misbehavior is on the rise. According to a recent survey by the Ethics Resource Center (ERC), more than half of 3,000 U.S. workers polled have observed at least one type of ethical misconduct in the past year. The "2005 National Business Ethics Survey" (NBES) sought workers' opinions on workplace ethics trends, the implementation and impact of formal programs, the ethical culture of organizations, and factors that pose risks of misconduct. The ERC has conducted four such surveys in the past 11 years. This year's findings reveal that although ethics and compliance programs make a difference, their impact is related to the culture in which they are situated. Related Results

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"[Organizations] have invested significant resources in ethics and compliance programs, but we are not seeing much change in the direct impact these programs are having," said Patricia Harned, president of the ERC, in a release. "Organizations need to evaluate what will work most effectively, including a closer look at the role workplace culture plays." Seventy percent of employees from organizations with a weak ethical culture reported observing at least one type of ethical wrongdoing, whereas only 34 percent of employees from organizations with a strong ethical culture said they have witnessed misconduct. The NBES defines misconduct as any behavior that violates the organization's ethics standards or the law. Abusive or intimidating behavior toward employees (21 percent) and lying to employees, customers, vendors, or the public (19 percent) were the two most common types of misconduct observed by survey participants. Other lapses in ethical behavior observed by respondents include: * A situation that places employee interests over organizational interests (18 percent). * Violations of safety regulations (16 percent).

* Misreporting of actual time worked (16 percent).
* Discrimination on the basis of race, gender, age, or similar categories (12 percent). * Theft (11 percent).
* Sexual harassment (9 percent).
Fifty-two percent of those respondents who observed misconduct said the conduct violated their organization's standards, while 4 percent said it broke the law. Forty-four percent said the misconduct violated both company standards and the law. Misconduct was found in all sectors, with 29 percent of respondents in government agencies, 26 percent in nonprofit organizations, and 25 percent in publicly traded and privately held companies observing inappropriate behavior. The smallest organizations--those with fewer than 25 employees--were least likely to have employees who observed ethical misconduct. Other findings from the survey include:

* Among the 52 percent of respondents who had observed at least one type of misconduct, 36 percent witnessed two or more violations. * Sixty-five percent of respondents said their organizations have a place where they can seek ethics advice. * Fifty-five percent of respondents have reported ethical misconduct to management, which is down 10 percentage points from the 2003 NBES. * Sixty-nine percent of employees said their organizations have implemented ethics training, which is up 14 percentage points from the 2003 NBES. In fact, five of six elements of a formal ethics and compliance program measured by NBES have increased over time. Written standards of conduct, ethics training, mechanisms to seek ethics advice or information, means to report misconduct anonymously, and discipline of employees who violate ethical standards have all increased, with evaluation of employees' performance based on ethical conduct...
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