Friday, June 25, 2010

A Strong Ethical Culture Is Key to Cutting Misconduct on the Job

ERC study shows that employees take cues from top management, pressure from peers to do the right thing

Organizations with strong ethical values – from top executives to middle managers to workers – experience less misconduct, more frequent reporting of misbehavior and less retaliation on the job, a newly released study by the Ethics Resource Center shows.

The study – “The Importance of Ethical Culture: Increasing Trust and Driving Down Risks” – indicates that strong ethical culture in a company has a “profound” impact on the kinds of workplace behavior that can put a business in jeopardy.

According to the study, organizations with stronger cultures find far fewer employees (4 percent) feel pressure to commit misconduct than in weaker cultures (15 percent). Likewise, the rate at which employees observe misconduct by co-workers is nearly twice as high in weaker cultures (76 percent) as in stronger cultures (39 percent).

The report also finds that actions by top managers (and the way they are perceived) have a significant impact on outcomes and that co-worker culture – peer pressure – is particularly powerful in cutting the amount of financial misconduct witnessed by employees.

“The work of the ERC is exemplary,” said Roy Snell, CEO of the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association (HCCA), which sponsored the study. “They have many years of experience and tremendous data. The ethical culture is one of the most reliable measurements of compliance and ethics program effectiveness, particularly when you have such a broad set of comparison data.” This information should help many compliance and ethics officers in their effort to build awareness and understanding of their leadership.”

“The Importance of Ethical Culture” is based on results from ERC’s 2009 National Business Ethics Survey of 2,852 respondents. The survey findings had a sampling error of +/- 1.8 at the 95 percent confidence level. For more information on methodology, go to The NBES survey is conducted every two years and is widely used by chief ethics and compliance officers in business and government and by academicians.

“The NBES data consistently tell us that a strong ethical culture offers the best protection against risky workplace behavior, which can easily land a company on the front page in a very damaging way,” said Patricia J. Harned, Ph.D., president of the Ethics Resource Center. “Rules and a code of conduct are always necessary, but it’s good leadership and peer pressure to do the right thing that often saves the day.”

To view the study, go to

Read the original posting here.

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