Has ethics reporting stalled? The recently released 2013 National Business Ethics Survey of the U.S. Workforce, states that overall the rate of employees reporting ethics or fraud concerns has held near steady in the last several years, increasing from sixty-three percent to sixty-five percent between 2009 and 2011, but dropping back to sixty-three percent in 2013. (ERC, 2014)
A closer examination of the details shows that observed misconduct dropped four percentage points from 2011 to 2013, which may account, in part for the drop in reporting of observed misconduct. However, such reporting dropped significantly more than four percentage points in many categories, which is a cause for some concern.
As the ERC so aptly states, every non-report is a lost opportunity to identify and correct problems and to prevent their reoccurrence. Think of the benefit to the organization if more people who observed misconduct followed up by reporting it. So what can organizations do to raise the reporting rate? Here are some general guidelines:
— Lead from the top. Senior managers must personally ensure there is an open and ethical culture throughout the organization.
— Remove any stigma. Actively encourage employees to report concerns.
— Communicate the processes and mechanisms for reporting misconduct, typically a combination of an ethics hotline, an internal ethics officer or department, direct communication with supervisors or other managers, and training to support it all.
— Listen and act promptly. When an organization is seen to take prompt and appropriate action in response to reports of wrongdoing, it encourages employees to make the effort to report.
— Protect employees from retaliation. Fear of retaliation from either management or co-workers is one of the major reasons employees fail to report observed misconduct. Apply sanctions to those who fail to protect employees from retaliation.
— Strive for a positive work environment that promotes support, trust, and transparency. The ERC National Business Ethics Survey informs us that seventy-two percent employees who said they receive positive feedback from their supervisor for ethical conduct reported observed misconduct, compared to fifty-one percent who received no such recognition. Employees who trust that their supervisors conduct their lives ethically are also more likely to report misconduct, as are employees who are confident that top management is transparent about critical issues that affect the organization.
Even organizations with strong ethics cultures will benefit when more employees are willing to report misconduct that they observe. The Ethical Advocate Blog has addressed the importance of strong ethics cultures before. See, for example, “Ethics Program Effectiveness” and “The Financial Case for a Deeply Embedded Ethical Culture.” Ethical Advocate can help you reinforce your strong ethics culture by providing ethics and compliance training and confidential and anonymous hotlines. Please contact us for more information.
Ethics Resource Center. National Business Ethics Survey of the U.S. Workforce, 2014.