Employees rate ethics environment - Update - Brief Article

Internal Auditor, Feb, 2002 by Al Holzinger

A MAJORITY OF WORKERS across the spectrum of U.S. industries believe their organization is highly ethical but its top management is not, according to new research.

Fifty-nine percent of the nearly 2,800 respondents to a survey by Walker Research believe they are employed at a highly ethical enterprise. In contrast, only 49 percent of respondents think the senior management of their firm possesses high integrity.

However, basis for this distrust is unclear from the research. Fifty-six percent of respondents say the importance of ethics has been well-communicated throughout the firm, and 55 percent say they have never experienced pressure to cut corners on ethical or compliance matters. Moreover, only 29 percent of respondents report knowledge or even suspicion of ethics or policy violations over the preceding two years.

Among respondents who say they know of an ethical breach, the most commonly cited violations were: lying to supervisors, 26 percent; unfair treatment of employees, 26 percent; improper use of business resources, 21 percent; conflicts of interest, 20 percent; theft, 19 percent; falsifying records, 18 percent; and sexual harassment, 15 percent.

Forty-eight percent of respondents say they would feel comfortable reporting an ethics violation, yet only 35 percent with knowledge or suspicion of such behavior reported it. The top three reasons for not reporting ethics violations were insufficient facts, belief that the organization would not respond appropriately, and lack of a system that ensures confidentiality.

The economic sectors where ethics were reported to be highest were financial services, technology, and insurance. In contrast, the industries that received the lowest ratings were transportation, retail, government, and manufacturing.