Although there have been substantial advances over the last decade in corporate and organizational commitment to ethics, many areas of institutional ethics continue to cry out for reform, as Enron, WorldCom and other corporations and nonprofits have proven.
Oddly enough, however, the U.S. workforce is not entirely disheartened. According to the National Business Ethics Survey 2003 (NBES), employees are more positive about the ethics of their workplace than they were in 2000. Observed misconduct dropped to 22 percent of the respondents, from 31 percent in 1994. The survey, conducted by the Ethics Resource Center, also presents evidence that employees in organizations with solid ethics programs—especially those with a formal ethics office, code of conduct, integrity training and hotlines—are more positive about the integrity of their organizations and appreciate what ethics bring to the workplace.
Perhaps this is the Enron effect. With the revelation of improprieties, leaders and organizations have been far more proactive. They understand that ethics and integrity are not abstract concepts, but a critical part of a healthy company, organization or agency. But is this a fleeting moment on the U.S. landscape, or something that will be profound and lasting?
For example, the report finds that small and medium size companies are less likely to have ethics programs and that, as a result, they may be more at risk. Many of these smaller companies are traded publicly and do not seem able to comply with the requirements of the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley requires public companies to have a code of ethics for financial officers and a way of reporting misconduct to a responsible person. Under the legislation, companies are required to disclose amendments to, or waivers of, the code of ethics relating to any of those officers. And a vulnerable small- or medium-size company that acts as a subcontractor or supplier may also put a larger company at risk.
The survey also shows that younger, newer workers are less likely to report misconduct because of the fear of retribution and feel more pressure to withhold information or even lie. Nearly half of all nonmanagement employees in 2003 say they did not report the misconduct they observed. This is likely prompted by the finding that ethics rhetoric used by chief executive officers is often inadequate. CEOs are not communicating and demonstrating the importance of ethics enough. They are failing to create, empower and support discrete ethics functions within their organizations.
The extent to which employees consider that they are being treated by their managers and colleagues with respect, dignity and honesty affects their personal and financial well-being as well as the short-term and long-term productivity of corporations, governmental agencies and nonprofit organizations. The less shining results in the survey should thus provoke questions among organizations about how well their current ethics programs are working.
Stuart Gilman, Ph.D. is president of the Ethics Resource Center based in the Washington, D.C. The survey results can be accessed at www.ethics.org.
