According to an April 2007 report from Deloitte & Touché, employees are more likely to commit ethical transgressions on the job when they see their supervisors doing the same.

About 40% of the surveyed workers said that behavior of management was the top factor in influencing ethics on the job, with 35% saying the behavior of direct supervisors was the most prominent factor.

And the financial costs are staggering.

Moral analysis is rarely a defined part of management decision making. Ethical issues are generally managed by exception. And the financial costs are staggering.

According to a 2005 National Business Ethics Survey, employees in organizations with a weak ethical culture reported a much higher level of observing at least one type of misconduct than employees in an organization with a strong ethical culture (70% compared to 34%).

Aside from one’s own ethical parameters, the financial cost is almost impossible to comprehend. Fraud is rampant with 50% of all organizations experiencing fraud at any given time and the average company losing 5% of its annual revenue to fraud. It’s about ethics and it’s about the bottom line.

Tone at the top is widely acknowledged to be the most important factor in influencing ethics at the workplace, yet ethics is a responsibility that must be assumed by every employee in the company.