Ethics and compliance officers seeking more guidance on how to achieve and promote workplace integrity—doing what’s right in a professional context—now have a new, first-of-its-kind benchmark report at their fingertips, released today by the Ethics & Compliance Initiative.
Even among high-quality ethics and compliance programs, it can be difficult for ethics and compliance officers to know where to focus their limited resources pertaining to workplace integrity. What’s been missing is factual information: Where are the areas of greatest concern when it comes to workplace integrity? What should leaders worry about right now? What, if anything, can they do about these concerns?
Recognizing the global need for data-driven insights on workplace integrity, the Ethics & Compliance Initiative (ECI) fielded the first-ever “Global Business Ethics Survey” to explore the experiences of employees in the following 13 countries: Brazil; China; France; Germany; India; Italy; Japan; Mexico; Russia; South Korea; Spain; United Kingdom; and United States.
ECI collected a total of 1,000 responses in each country, with the exception of the United States, with 1,046 responses, for a total of 13,046 responses in the GBES data set. GBES, which is the global expansion of ECI’s National Business Ethics Survey, is a rigorous, multi-country inquiry, providing insight into workplace ethics in both public and private sector companies.
The GBES identified four key metrics that provide insight into ethics issues by highlighting the risks that emerge from lapses of workplace integrity. Those four metrics, as analyzed in the report, are discussed in greater detail below.
Pressure to compromise organizational standards. The more pressure employees feel to compromise organizational standards, the more likely the presence of actual wrongdoing.
According to the report, 73 percent of all public- and private- sector employees surveyed who felt pressure also said they witnessed misconduct where they worked. In the absence of pressure, by comparison, a median of only 17 percent said they observed misconduct in their place of business.
Across all sectors, employees in Brazil, India, and Russia—the three countries with the highest overall ethics risks—were more likely to experience pressure to compromise standards and observed misconduct than their counterparts in the other 10 countries surveyed. At the opposite end of the spectrum, employees in Japan and Spain felt the least amount of pressure, and observed the least amount of misconduct.
Based on these findings, ECI recommended in the report that companies take measures to identify the root of such pressure. “If possible, poll your global workforce regarding the presence of pressure to compromise workplace standards or the law to uncover (potential and existing) problems before they become more serious,” the report stated.
ECI also said it’s important to ensure that management and supervisory training and leadership development programs emphasize their responsibility to act as role models for integrity. “Give them the skills to identify and minimize sources of pressure, and train them to continually advocate the organization’s commitment to workplace integrity,” the report stated.
ECI also said it’s a good idea to evaluate internal performance systems, like bonus structures, that might lead to compromised standards: “Ensure that expectations and reward systems are not sending the message that standards are less important than results.”
Observed misconduct. Most acts of misconduct involved management and are likely to occur over a period of more than two years, according to the report. In the private sector, 23 percent of bribery involved “top managers,” while another 32 percent involved “middle managers.”
Examples of specific misconduct cited in the report that managers engage in include:
Abusive or intimidating behavior towards employees;
Accepting bribes, kickbacks and/or inappropriate gifts;
Making decisions or taking actions to benefit the employee, friends, or family over the interests of the company;
Engaging in anti-competitive behavior—such as price fixing or bid rigging; or
Hiding potential violations before onsite inspections.
Top managers within the public sector engaged in misconduct more frequently than top managers in the private sector. “Contracting violations, stealing, offering bribes and retaliation were each much more likely to be committed by top managers in the public sector compared to the private sector,” according to the report.
“Organizations can combat misconduct by focusing their efforts on a few behaviors that are commonplace: abusive behavior and lying,” the report stated. Because perceptions can vary broadly by geographic location and culture, ECI recommends exploring what communication and specific behaviors are problematic.
“Through focus groups, employee surveys or other proven methods, understand what employees are experiencing (both the positive and the negative) and how they perceive the ethics-related actions of their leaders and supervisors,” the report stated. “These methods can also illuminate differences between locations, work groups or other segments of the organization’s employee population, which can help target resources and solutions.”
“To build strong ethical leadership and/or address deficiencies, emphasize integrity as a requirement for promotions to all levels of leadership, establish ethical leadership as an essential job function, and include ethical leadership measures in employee reviews and evaluations,” ECI said.
Recognize that certain misconduct is likely to be a pattern of bad behavior, rather than an isolated incident. When even a single incident occurs, invest the resources necessary to follow the trail and determine whether it is part of a larger, ongoing pattern.
Reporting of misconduct and retaliation against reporters. Countries with the highest reporting rates tend to have the highest rates of retaliation.
One “new and surprising” discovery in the report, ECI said, is the timeframe in which retaliation occurs: “Retaliation tends to happen during a brief window of time immediately following a report; across all sectors, a median of 79 percent of employees who perceived retaliation said it happened within three weeks of reporting.
In 11 of the 13 countries surveyed, at least 90 percent of retaliation occurred in the first six months after the report was made. Globally, a median of only six percent of retaliation occurred after six months or longer after the initial report.
Companies looking to put resources into increasing and encouraging employee reporting should consider tactics identified in ECI’s Blue Ribbon Panel report Principles and Practices of High-Quality Ethics & Compliance Programs. “Possible approaches include training for leaders on how to listen and respond to employee concerns, outreach to and protective monitoring of employees who report misconduct, and publicizing organizational discipline for those who violate anti-retaliation policies,” the report stated.
“Outreach to whistleblowers should be especially strong during the first three weeks after a report is filed,” the report stated. “Similarly, supervisors should provide special support and watch closely for retaliation during this period. Consider systems that monitor the long-term success of employees who report concerns.”
The full findings of the GBES, including a breakdown of country-by-country data can be found here, and its complementary National Business Ethics Survey can be found here.