Is Bigger Necessarily Better? Recent ERC Survey Examines Workplace Ethics Within Fortune 500

The Ethics Resource Center (ERC), a definitive organization in the ethics and compliance arena, has just released the results of a first-of-its-kind survey of workplace ethics within the nation’s most powerful companies. Conducted in June of this year, the survey marks the first comprehensive pulse-taking of Fortune 500 employees’ views on workplace ethics. The results are startling and, in some instances, sound an alarm for regulators, investors, corporate leaders and corporate ethics professionals alike.

On the positive side, 60% of Fortune 500 companies operated comprehensive ethics & compliance programs as compared to 41% at all US companies. But there appears to be a wide open space where bad things can happen. More than half of all respondents had observed misconduct in the previous 12 months and, hearteningly, nearly three-quarters reported what they witnessed. Employees reported feeling pressure and pressure erodes ethical values. Specifically, the ERC survey found that 16% of employees felt that others pressured them to compromise standards in their jobs and 27% of employees who watched the stock price throughout the day felt pressure to break the rules. Of those who felt pressured, a shocking 90% reported observing misconduct on the job.

The survey findings highlight the importance of good leadership. Where management commitment to ethics was weakest, misconduct soared to 89%. Consistent with other recent surveys, the survey found that employees show a strong desire to stay under the tent. Indeed, a mere 1% of those who reported misconduct made their first report to an external authority. This should give comfort to those in the corporate community that feared the SEC Whistleblower Program would cause employees to circumvent effective internal reporting systems and report misconduct directly to the SEC. However, the bad news is that 17% of these employees went outside the company with a secondary report – largely because they were disappointed with the organization’s response to the reported misconduct.

Now, more than ever, companies – particularly the strongest corporate entities in the world – need to build ethical cultures that engender confidence in employees, investors and the public at large. These findings suggest that the lion’s share of the Fortune 500 have strengthened their corporate integrity programs. But more work remains to be done.

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