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Ethical Corporation Magazine -
21 November 2005

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Strategy & Management: Ethics

A new study shows ethical misconduct in the workplace is widespread despite a rise in formal ethics programmes
According to the 2005 National Business Ethics Survey released last month, more than half of US workers have observed at least one type of ethical misconduct in the workplace, a slight increase from 2003, despite greater awareness of formal ethics programmes. And employee reporting of such instances of misconduct fell by 10% from 2003.

The survey of 3,000 US workers, conducted by the non-profit group Ethics Resource Center, examines trends in workplace ethics, implementation and impacts of formal ethics programmes, ethics cultures within organisations and factors that pose risks of misconduct.

Nearly 70% of employees report their organisations have implemented formal ethics training programmes, up 14% from 2003. And 65% say there is a place in their organisation where they can seek ethics advice.

Patricia Harned, president of the Ethics Resource Center, says regulation resulting from the Enron collapse and other corporate scandals has prompted a renewed emphasis on corporate ethics. But despite significant investment of resources by companies in ethics and compliance programmes, little change is being seen as a direct impact of the programmes, she says.

The key, says Nell Minow, editor of the Corporate Library, is that we are better at identifying ethics violations after the fact than at preventing them. And the study, she says, shows just how ineffective �programmes� are.

Companies, Harned advises, need to take a closer look at the role workplace culture plays.

Change of culture

Sandra Waddock, professor of management and senior research fellow at the Center for Corporate Citizenship at Boston College, agrees. Just implementing an ethics programme and telling employees to �be better�, she says, is not going to change the culture of an organisation.

�You need to work systemically at many different levels, and in particular you need to change the rewards system to change the culture of an organisation,� she says.

Ethics has to be a part of every single transaction and communication, from the job interview to the performance evaluation and pay and bonuses, Minow stresses.

Although formal ethics programmes alone may help some employees make the right decisions, Waddock says, they only address the symptoms and not the real problem � that people are rewarded for short-sighted decisions that seem to improve short-term, bottom-line results.

�Companies are companies and the reason they are putting so much pressure on employees for short-term results is because they are under the same pressure from Wall Street,� she says.

It is easy, Waddock says, to get caught up in that culture and think �everybody is doing it, so it must be okay�. Ethics programmes, she says, can only go so far in countering that pressure when the rest of the system is working against it.

Therefore, ethics programmes, while important, must be merely a part of bigger strategy, she says.

Perhaps most importantly, Minow says, ethics can only truly be communicated by example.

It is clear it takes more than simply implementing an ethics programme to instil ethics in the workplace. Improving ethics in business requires living the spirit of those programmes in every aspect and transaction � beginning at the top, and often transcending the wishes of the stock market.

Useful links
www.ethics.org
www.thecorporatelibrary.org

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Article sourced from

Ethical Corporation Magazine -21 November 2005

Strategy & Management: Ethics

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Ethical Corporation Magazine -
21 November 2005