In December, Global Compliance released its
annual ethics forecast for the coming year; the long and the short of it was that ever-increasing ethics pressures spelled “stormy weather ahead.” As our experts wrote, “There appears to be no safe haven for those hoping to escape the global trend towards increased ethics and compliance demands…” With the arrival of the new year, the Ethics Resource Center (ERC) released its
2011 National Business Ethics Survey – and not surprisingly its results support what our own experts predicted…but with a twist.
What twist? A recovering economy was beginning to weaken companies’ ethics cultures, but the trend had not yet affected the average employee. As the survey states, “With the return of organizational profitability, the strength of organizations’ ethics cultures fell sharply in the 2011 NBES, even as individual employees – still anxious about their personal income and job security – have generally continued to uphold company standards.”
In other words, 2011 captured a moment in time when trend lines had not yet aligned in the face of an economy that showed signs of recovery while still generally being perceived as poor. The survey provided ample statistics that supported this dichotomy. First the survey’s good news:
- “The percentage of employees who witnessed misconduct at work fell to a new low of 45 percent. That compares to 49 percent in 2009 and is well down from the record high of 55 percent in 2007.“
- “Those who reported the bad behavior they saw reached a record high of 65 percent, up from 63 percent two years earlier and 12 percentage points higher than the record low of 53 percent in 2005.“
Now for the bad:
- “Retaliation against employee whistleblowers rose sharply. More than one in five employees (22 percent) who reported misconduct say they experienced some form of retaliation in return. That compares to 12 percent who experienced retaliation in 2007 and 15 percent in 2009.“
- “The percentage of employees who perceived pressure to compromise standards in order to do their jobs climbed five points to 13 percent, just shy of the all-time high of 14 percent in 2000.“
- “The share of companies with weak ethics cultures also climbed to near record levels at 42 percent, up from 35 percent two years ago.“
It is expected that as the economy continues to improve, these two trend lines will align with the good news becoming bad and employee misconduct rising across the board. This is the historical cycle that’s come to be expected – a resurging economy gives rise to resurging misconduct. What’s particularly disturbing – though not surprising to those in the know – is what the current temporary divergence in trends says about ethics cultures in organizations: bad behavior is by and large driven from the top. As the economy begins to improve, it is those in positions of power who abandon standards first and exert pressure on subordinates to do the same – or retaliate against them when they don’t.
We’ve said it time and time before: without a committed and consistent tone from the top, the ethics culture of any organization is bound to flounder. It may sound like a broken record, but unlike records, this message seems to be in no danger of becoming outdated.