Ethics and Employees

Surveys and Trends

On this page

• New Workplace Trends Report Notes Improvements for Employees in Hong Kong
• ILO Identifies Challenges to Integrating Female Workers into Formal Economies by Region
• Study Shows Child Labor on the Rise on Indian Cotton Farms
• Surveys Show Corporate Investors, Recruiters Putting Larger Stock in Ethics
• Report Encourages Preventive Health Care in Indian Corporate Sector
• Auditors Assess Companies' Ethical Culture
• Employees Grade Their Companies' Ethical Environments
• Survey Says Work-Life Balance Can Impact Ethical Behavior
• ILO Study Examines Global Working Hours, Policy
• ILO Reports Lack of Progress on Gender Discrimination
• Top 50 Companies for Diversity in the US
• U.S. Job Bias Charges Up in 2006
• U.S. Lags in Family Friendly Workplace Policies
• Employee Confidence in U.S. Management Declining
• Culture & Corruption: Conference Board Survey
• MBAs and CSR: Net Impact MBA Opinion Study
• Barriers and Drivers in Ethical Behavior
• KPMG 2005-2006 Integrity Survey
• Czech Business Ethics Survey
  
• US Corporate Attitudes to Ethics Survey
• International Business Ethics Review

* * *

New Workplace Trends Report Notes Improvements for Employees in Hong Kong

A 2008 study from the University of Hong Kong and CSR Asia finds significant improvements in work-life balance for Hong Kong based employees compared to the same study that was conducted in 2004.  However, problems still exist for many employees such as pressure to work long hours and health problems due to excessive work.

In July 2006, the work week was reduced from five and a half work days a week to five days a week in the public sector, with many more private companies following suit.  The policy change, according to Richard Welford, the author of the report, seems to have had a significantly positive effect on the happiness of Hong Kong employees.  Although a good majority of survey respondents said they have too much work to do and are often stressed, more people said they were happy with their jobs than people who said they were unhappy.

Many improvements since 2004

Working hours have been reduced by five hours a week and staff turnover has significantly improved.  More companies have also instituted flexible working hours to compensate for working late.  In 2004, 34% percent of the respondents said flexible working hours were offered; whereas 46% said the same in 2008.  More people are staying in their jobs and are overall, said they were satisfied.  When asked to rate their level of satisfaction with their jobs on a scale from one to five, with 1=very unhappy and 5=very unhappy, the average rating was three.  Job satisfaction was also very similar for both men and women.

Employees still working excessively

Despite these improvements, some disturbing results appeared.  Employees are still working long hours overall, and many are working unpaid overtime.  In 2008, the range of working hours spanned from 44.5 for Government employees to 54 for those in Financial Services.  Many people feel they are expected to work late.  The reasons many survey respondents gave for working late was, “I can’t leave before my boss” and “I don’t want to be the first to leave the office.”  Some employees actually said they are less productive because they know they will be expected to work late. 

Regularly working late into the evening is especially common for people aged 30 and under (65.7%). On average, around 52% of people work overtime regularly. Males were also more likely to work late and work unpaid overtime.

Health problems common

The survey results suggest that health problems are still a serious issue.  A total of 82.5% of respondents said they suffered from stress and 75.4% from lack of exercise due to long working hours. In addition, negative health effects including poor diet (46.4%), exhaustion (45.6%), insomnia (31.6%) and depression (27.6%) were also problems that arose.

As a result, sick leave is often used more often because of working long hours, and most survey respondents said the amount of annual leave was unfair.

The report states that the health statistics are particularly alarming.  Welford, the author of the report, encourages companies to remember that such illnesses can become a financial burden to themselves and taxpayers who must spend more in regards to medical expenses. In addition to the financial burden, health problems are likely lead to lower productivity and effectiveness of workers.

Posted 5/2/08

Back to Top

* * *

ILO Identifies Challenges to Integrating Female Workers into Formal Economies by Region

Comprehensive report states North Africa has the largest gender gap, whereas East Asia has been one of the most successful in achieving gender equality

Integrating women into the workforce and providing them with decent work opportunities has long been a challenge across the globe.  The International Labor Organization’s Global Employment Trends for Women assesses the progress that has been made in nine different regions.  According to a new target added to the Millennium Development Goals, “full and productive employment and decent work for all” is essential to reducing poverty.  The ILO states that at the global level, elss than 70 women are economically active for every 100 men.  Governments have an obligation to develop policies that give women an equal chance at finding decent work, and employers have an obligation to ensure proper working conditions and fair wages for both genders.

There have been improvements overall for the integration of women into the workforce, but change has been slow.  The ILO admits that additional information would be useful in determining where the real problems lie, such as indicators describing decision-making power, earnings, violence at the workplace, social protections, credit market access, etc.  However, in most regions, this information was not available.  More research should be done in order to determine how specific barriers can be eliminated.

Sub-Saharan Africa

• Very high labor market participation rates for both sexes, but “decent and productive employment with implied decent earnings, social protection, fundamental rights at work and social dialogue is certainly the exception rather than the rule.”
  
  
• High rates of poverty mean a poor person will have to accept any job available in order to subsist, lessening the options for education and acquiring skills.
  
  
• Overall, the number of males working in the formal labor market is higher than the number of women.  The ILO attributes the gap to the necessity for females to occupy themselves at home with the daily subsistence activities of poor households, rather than other factors like workplace discrimination.
  
  
• Men are moving more quickly out of the agricultural sector into other more economically secure jobs, while women are left to more vulnerable working conditions.  Men’s share in the service sectors is almost twice as high as women’s.
  
  

The challenge to both the public and private sector is to capitalize on the high economic activity of sub-Saharan African women by making it easier for them to enter jobs of higher productivity and improving working conditions.

North Africa

• Lack of decent work is less of a problem, whereas integrating women into the formal labor market more generally is a significant challenge.  North Africa has the largest gender gap in the number of women participating in the formal labor market and the highest unemployment rates for both sexes.
  
  
• There has been an increase in investment in education for young girls, but that has not yet contributed to their integration into the workforce.
  
  
• Some employers openly give preference to male jobseekers, and for those women who have gained access to education often do not wish to take up the type of jobs that are available to them.
  
  
• Most formally employed workers are in the agricultural sector.  For those workers who receive a salary, the gender gap is minimal.  What this probably means is that those women who do find employment – those that usually come from higher income background – are typically well protected in terms of security and income.
  
  

The challenge is to capitalize on the region’s comparative advantage – its human capital – to trigger a shift toward higher productivity products and services.  Well-educated women should also be given an equal chance to have access to these jobs.

Middle East

• This region has the second lowest labor participation rate and second highest gender gap out of all the regions the ILO surveyed.  On the other hand, the region also had the highest increase in female labor force participation over the last 10 years.
   
• Of women in the region that do formally work, half are in the service sector, and the rest are mainly in agriculture.  The number of women in agriculture is actually increasing, contradicting the global trend.  It is much harder for women to find decent work in the agricultural industry than in industry or service.
  
  
• The number of women in unsalaried work is significant when compared to men.  In 2007, the ILO found 43.3 percent of women were in “vulnerable employment” compared to 28.2 percent of men. 
  
  
• The situation for women is similar to North Africa in that a very small minority of women can find decent jobs, but the rest are completely shut out of the labor force.  This could be due to increasing cheap migrant labor in the region, according to the report.
   

The challenge is to motivate women to enter the formal workforce, to encourage society to accept new economic roles for women and removing existing barriers to economic integration.

Latin America and the Caribbean

• High rate of women participating in the labor force and the gender gap in this area is decreasing.  However, the number of men working compared to women is still considerably higher.
  
  
• The agricultural sector is decreasing overall.  The region is unique in that more men are in agricultural jobs, whereas women are dominating the services sector.  The female share of this sector is the second highest behind the Developed Economies and the EU, according to the report.
  
  
• The high female unemployment rate and the number of women in low-productivity jobs are the main concerning trends in this region.
  
  

The challenge is to boost job creation overall and improve working conditions so that women have access to not just any jobs, but decent jobs.

East Asia

• The economic status for this region is at virtually full-employment, with the highest number of females working and the smallest gender gap in the world.
  
  
• A slight decrease in the ratio of working men to working women in this region indicates that women have the highest degree of freedom to choose whether they want to work or not - many young women are opting to stay in school. 
  
  
• There is very little difference in the sectoral shares between the sexes.
  
  
• However, women are still more likely to be in vulnerable employment than men and working conditions could be called into question. 
  
  

The challenge is that due especially to long working hours, women are vulnerable to an imbalance in family and working life.  Employers should work to include proper benefits that take this issue into account.

South-East Asia and the Pacific

• There is a smaller gender gap in labor force participation and the number of youth employed is decreasing – a positive sign that more are choosing to stay in school.
  
  
• However, unemployment rates are increasing for women.  It is particularly difficult for young women to find jobs.  Given that unemployment is high overall, employers are more willing to take older, more experienced workers.
  
  
• The overall increase in employment in the services sector was driven primarily by women.  The number of women gaining salaried work is increasing as well.
  
  

Gender inequality in the region is less of a challenge, but policies can help protect women from situations of occupational segregation that leave them with only the low-paid, low-productivity jobs in the services sector.  There should be a greater focus on education and skills development.

South Asia

• Labor participation rates among women are low.  According to the report, compared to 100 men active in labor markets, only 42 women participate.
  
  
• Low workforce participation among women could be due to the unequal access to quality education.  Women often end up having lower skills than men and drop out of the labor force.
  
  
• South Asia strongly depends on agriculture, which accounts for almost half of total employment.  Women’s share in this sector is much higher than men, leaving them more vulnerable to indecent working conditions.
  
  
• Strong shift toward the industrial sector where there is a low gender gap. 
  
  

There are still too many people, especially women, without access to decent work, the report says. The challenge is to help women profit from a shift toward more productive sectors and a relatively low unemployment rate.  Equal access to quality education should be emphasized and more opportunities should exist for women to enter non-traditional economic roles.

Central and South-Eastern Europe (non-EU)

• Equality in labor force participation has maintained a fairly even distribution.  About 80 women are economically active per 100 men.
  
  
• Unemployment is high for both youth and adults, but for young women the rate is higher, a concerning trend for the future. 
  
  
• Huge increases in the service sector included both men and women.
  
  

Some inequality trends continue.  Planned economies had better wage equality than industrialized or developing economies and young women are more likely to drop out of the labor force.  The challenge for this region is to boost job creation to absorb more female employees and keep a close eye on factors that could contribute to lower wages for women and discrimination.

Developed Economies and European Union

• This region has the smallest gender gap worldwide in relation to those participating in the labor market.  Unemployment rates continue to be higher for women than men, but rates are lower than 10 years ago. 
  
  
• More workers are moving from industry into the service sector, especially women.
  
  
• Gender inequality surfaces when more specific indicators are analyzed.  This is the only region that the ILO was able to study this closely, because these same indicators were not available in other regions.  A pay gap between men and women is still significant.  There are more men in employer positions and men account for nearly 90 percent of the board members of leading companies. 
  
  

The challenge for the region will be to encourage more women to work, and create the necessary conditions to allow them to do so, to support an aging population.  A focus should be placed on raising workers’ skills and maintaining a proper balance for women managing both work and family life.

Posted 3/18/08

Back To Top

* * *

Study Shows Child Labor on the Rise on Indian Cotton Farms

A study, jointly commissioned by several international organizations, gives an in-depth picture of the child labor situation that is currently taking place in five Indian states.  Data shows that between 2006-07, there were approximately 416,460 children employed on farms, with 54 percent younger than 14 years of age.

Children are mainly hired on the basis of a long-term contract with local farmers, who are subcontracted by Indian cotton seed companies and larger multinationals, specifically Monsanto and Bayer.  As there has recently been more pressure on multinationals to comply with human rights laws, there are less children working on farms contracted by Monsanto and Bayer than those contracted by Indian companies. 

Trends

Cotton seed production has significantly increased with the introduction of the BT gene in 2002.  Monsanto has patented the BT gene and has sublicense agreements with all Indian companies that use the gene in production. Due to the high demand for hybrid seed cotton, the total area of production in several Indian states has expanded, as well as their workforce. 

Due to the nature of cotton seed production, many farmers prefer to hire female children because they believe girls have more nimble hands and a better work ethic.  Using children allow farmers to easily control them, most children will work longer hours than adults, and farmers can pay children substantially less. 

According to Sivaramakrishna, a seed farmer in Mahaboobnagar district, Andhra Pradesh, “Cross- pollination work is very labor intensive and a large number of laborers is required to do this work. It is also delicate work and needs to be handled carefully. We prefer young girl children for this task because with their delicate fingers (nimble fingers) they can handle this work better than adults. They also work more intensively than adults. We can control them easily. They listen to us and do what ever we ask them to do. The most important thing is labor costs. Nearly half of our investment goes towards payment of labor charges. The wage rates for children are far lower than adult wages. We can reduce our labor costs considerably if we hire girl children. If we want to hire adult labor we have to pay higher wages. With current the procurement price we get from the seed companies we cannot afford to pay higher wages to the laborers.”

There are numerous risks involved for children working on these farms.  Almost 90 percent of the children are school dropouts or never went to school.  They suffer chronic illnesses from inhalation of poisonous pesticides, which have already caused three deaths.  Employing children under unsafe working conditions for below minimum wage rates violates many national laws and international human rights laws. 

Case Studies

Individual case studies were conducted in four states – Andhra Pradesh, Karnataka, Tamilnadu, and Gujarat.  Andhra Pradesh and Gujarat are the largest producers of cotton seed and have gained the most attention for child labor practices.  However, they are also areas where local NGOs, media, social investor groups, and international organizations have been the most active.  The external pressure has led Monsanto and Bayer to develop motivation campaigns, issue price incentives to growers not to employ children, black list farmers who do, and financially support special schools for child laborers in hopes they will go on to regular schools.  Due to these actions, the proportion of child labors to the total workforce on Monsanto farms in Andhra Pradesh dropped from 10 percent in 2005-06 to four percent in 2006-07.  Similarly, the proportion on Bayer farms in the same area dropped from 20 percent in 2005-06 to 11 percent in 2006-07. 

Unfortunately, some conditions have not changed.  The terms of employment still largely remain long-term contracts where farmers pay loans and advances to the children’s parents.  Working conditions also continue to be very unsafe.  Two female minors were raped and killed in 2006 on cotton seed farms and three children died from pesticide in 2004.  Migrant children are treated the worst.  They often endure physical abuse and chronic illness without access to medical care; and farmers will withhold wages and force children to work long hours.

Advocacy groups are fairly active, but this report shows child labor is still a major issue in India.

This study was commissioned by OECD Watch, Deutsche Welthungerhilfe, the India Committee of the Netherlands, Eine Welt Netz Nrw, and the International Labor Rights Forum.  Click here to see the full report.

Posted 10/18/07

Back To Top

* * *

Surveys Show Corporate Investors, Recruiters Putting Larger Stock in Ethics

According to 2007 rankings, a focus on ethics seems high on the priority list

Corporate Rankings

Many media outlets annually publish rankings of the top companies and top business schools as a way of tracking trends in the corporate sector. It is striking to note that the Barron’s 2007 ranking of the World’s Most Respected Companies and The Wall Street Journal’s 2007 Recruiters’ Top Business Schools give high marks to those companies and schools with strong ethical fiber.

Barron’s bases its list of winners on a survey of American money managers, who determined that, in making their selections, what inspires respect is a combination of:  32% strong management; 25% sound business strategy; 21% ethical business practices; 9% competitive edge; 7% shareholder orientation; 4% consistent revenue/profit growth.  The not insignificant importance attached to ethical behavior clearly was an influence in both Berkshire Hathaway and Johnson & Johnson respectively taking the first and second positions.

Despite its reputation as a huge money maker, many investors often cited Berkshire Hathaway, the conglomerate founded and run by Warren Buffet, as a company that shows leadership, specifically Buffett’s “vision, patience, boldness, and modesty.”  It is also telling that in the past year, Buffett pledged his close to $40 billion fortune to the Bill and Melinda Gates Foundation, a multi-million dollar charity fund.

As for Johnson & Johnson, which took second place, Barron’s notes that, “the durability of a hard-won reputation might be most evident in the repeat performance of J&J at or near the top of the list. In most respects, the company is in a rut. Its stock has been moribund, about flat for almost two years in a hull market. The company has faced troubling safety issues...Yet, investors consistently give J&J the benefit of the doubt, owing to generations of prudent management, shareholder attentiveness and careful cultivation of trusted brands. Additionally, Barron’s reports that more than one respondent cited J&J’s recall of Tylenol from store shelves after a cyanide scare back in the 1980s as lasting evidence of the company’s integrity.

Barron’s described the trend in this year’s ranking that “corporate respect must be earned over a span of decades. While scandal or corporate-governance abuses can quickly empty a company’s reservoir of goodwill with investors and others, highly respected companies tend to retain their high marks even during lulls in stock performance or profitability.” 

The list of 10 “most respected” according to Barron’s are Berkshire as number one, followed in order by Johnson & Johnson, Toyota Motor, Procter & Gamble, General Electric, Microsoft, Nestlé, Apple, Cisco Systems, ExxonMobil. 

Business School Rankings

According to the Wall Street Journal survey, Dartmouth College’s Tuck School of Business ranked #1 as recruiters’ favorite MBA programs.  Remarkably, "when asked which graduates come out with the strongest ethical standards, recruiters named Dartmouth most often, followed closely by Brigham Young,” the school that placed second in the rankings.  Some well-respected universities placed lower on the list than in the past. The WSJ reported one respondent who cited “Students weren’t as prepared for interviews and were somewhat more arrogant than in the past. Overall, I would say the students seemed ultra-relaxed and felt that they didn’t need to try to impress the interviewers but rather the interviewers should try to impress them.” 

The most important characteristics that recruiters said they look for are interpersonal and communication skills, a teamwork orientation, personal ethics and integrity, analytical and problem-solving abilities, and a strong work ethic.

Posted 9/19/07

Back To Top  

* * *

Report Encourages Preventive Health Care in Indian Corporate Sector

Per Capita Government Health Expenditure in India Is One of the Lowest in the World

The state of Indian health care has changed dramatically over the past couple decades, but a focus on preventive health care is still in its early stages.  The Indian Council for Research on International Economic Relations released a study, called “The Impact of Preventive Health Care on Indian Industry and Economy,” that shows the impact preventive health care can have on economic success.  In India, per capita government health expenditure in India is one of the lowest in the world – US$7, as against US$2,548 in the United States. The report found that almost a quarter of respondent firms lose approximately 14 per cent of their annual working days due to sickness.

The researchers of this report recognize the increased awareness in the corporate sector of the importance of preventive health care for business, but the public sector has not caught up.  Therefore, this report focuses on making specific policy recommendations that will put preventive health at the forefront of corporate governance programs.

Key findings:

• Blue-collared workers face a higher risk of disease compared to medium- and senior-level employees
  
  
• Acute diseases (diarrhea, flu, malaria, dengue, etc.) have the highest prevalence, while lifestyle (or chronic) diseases are on the rise.
  
  
• India’s national income losses due to heart disease, diabetes, and stroke are projected to exceed US$200 billion over the next 10 years; however, with preventive measures, an accumulated economic growth of US$15 billion could be expected.
  
  
• Senior-level management most prone to lifestyle diseases
  
  
• Less than one-third of companies surveyed do not feel preventative health care is necessary
  
  
• Of the 288 respondents, only six offered a comprehensive preventive health plan (preventive health check-ups, regular health screening, facilities for exercising, stress relieving techniques, and lifestyle-related advice)
  
  
• Only one-third of companies have follow-up policies that come after preventive health check-ups
  
  
• 56 percent of respondents had undergone preventive health check-ups, and almost all thought they were beneficial

Recommendations for the Government of India:

• Tax exemption for medical expenses if preventive health care measures are instituted
• Corporate tax breaks to those companies that provide preventive health care facilities to their employees
• Preventive health care voucher system, financed by the government, but delivered through the private sector
• Institute the health policy reforms suggested by the National Health Policy 2002 talks
  
  

Recommendations for the corporate sector:

• Conduct health audit of all employees at regular intervals through preventive health check-ups
• A proper follow-up of preventive check-up reports should be done through treatment, lifestyle and other forms of counseling, gym recommendation, etc.
• A whole range of preventive health care measures should be provided to the employees in consultation with medical experts, not just health checkups
• Employees should be made to bear the partial cost of curative treatment, which will encourage them to adopt a preventive health care lifestyle
• Preventive health care awareness camps should be organized for employees so that they appreciate the usefulness of preventive health care
• Schemes like vouchers that put purchasing power in the hands of employees, while ensuring that they are used for intended purposes could be considered as an efficient means of providing the whole range of health care measures

To read more information about the report, click here to view the .pdf version.

Posted 9/17/07

Back To Top

* * *
Auditors Assess Companies’ Ethical Culture

Oversight Systems, Inc, a provider of automated monitoring solutions, conducted a survey of 86 fraud examiners in late 2006. The results reveal that three-quarters of the respondents feel institutional fraud is more prevalent today than in 2002. The following graphs represent the survey's key findings.

Changing a company's culture is one of the most difficult tasks, but it is also a necessary component of reducing financial misconduct. The survey found that 56 percent of respondents said they have personally observed financial misconduct within the past year. Just one-third of respondents indicated immediate concern by business leaders following the arrest and prosecution by high-profile executives while only 13 percent indicated a perception of great corporate vigilance and 11 percent saw no change in institutional oversight.

According to Dana Hermanson, Dinos Eminent Scholar Chair of Private Enterprise at Kennesaw State University, “If there is a culture of never missing targets, some people will cheat to make the numbers. Their rationalization is that they are just doing what the top people want them to do. Directors and executives need to clearly communicate that ethics come before making targets. If this message is not consistently communicated, then the organization is headed for trouble.”

Participants were asked to select the three main reasons institutional fraud occurs. Four out of five fraud examiners conspicuously chose the pressure “to do whatever it takes to meet goals” as the most common reason behind institutional deceit. Executives seeking personal gain was identified as another major cause of fraud (71 percent), followed by the mentality that “I won’t get caught” (41 percent) and the delusion that they do not consider their actions fraudulent (40 percent). Just five percent indicated that a lack of understanding laws and accounting regulations was a reason behind such fraud.

In order to prevent corruption, the most common response, 43 percent of the total responses, was setting the right tone at the top. Visible prosecution and internal controls were also cited as helpful measures. Whistle-blower protections garnered a notable 12 percent score in curbing fraud.

To read the full report, click here to view the .pdf version.

Posted 8/23/07

Back To Top

* * *

Employees Grade Their Companies' Ethical Environments

Five years after Sarbanes-Oxley, most American employees give publicly traded companies high marks for ethics.

Almost 70 percent of employees at publicly traded U.S. companies – those under the purview of the five-year-old Sarbanes-Oxley Act – gave their employers an “A” or “B” grade for encouraging ethical conduct, according to a new survey by the Ethics Resource Center. However, the survey found that roughly one in seven give their employers a below-average grade or failing grade, with the lowest marks most likely at companies with fewer than 100 employees.

Moreover, the national ERC survey found that a significant share believe their organizations reward employees for getting good results, even if they use ethically questionable practices:

Asked, “How often does your job conflict with your personal values?”

When asked to grade their organizations’ efforts to encourage ethical conduct on a scale of A thought F, with A being the best, employees of all publicly traded companies surveyed judged their workplaces as follows:

A – 35 percent
B – 34 percent
C – 18 percent
D – 10 percent
F – 4 percent

According to previous ERC studies, employee perceptions of corporate ethics are driven by several factors – awareness of the importance of ethics as initiated by top management, an organizational culture that reinforces the importance of ethics, and the presence of an ethics and compliance program (including internal controls) that detect misconduct taking place.

This most recent national poll confirms previous indications that smaller organizations are more challenged and have more work to do in encouraging ethical work environments.

Please visit the Ethics Resource Center's website to read more information.

Posted 8/7/07

Back To Top

* * *

Deloitte & Touche USA Survey Says Work-Life Balance Can Impact Ethical Behavior

Management and supervisors play a direct role in helping to create a positive ethical culture in the workplace.

A recent sruvey revealed there is a strong, positive relationship between good work-life balance and ethical behavior at work.  The 2007 Deloitte & Touche USA LLP Ethics & Workplace survey also showed that the behaviors of management and direct supervisors, coupled with positive reinforcement for ethical behavior, are the top factors for promoting ethical behavior in the workforce.

According to the survey, a combined 44 percent of workers cite high levels of stress (28 percent), long hours (25 percent) and inflexible schedule (13 percent) as the causes of conflict between their work responsibilities and personal priorities, hence contributors to work-life imbalance. Sixty percent of employed adults surveyed think that job dissatisfaction is a leading reason why people make unethical decisions at work, and more than half of workers (55 percent) ranked a flexible work schedule among the top three factors leading to job satisfaction, second only to compensation (63 percent).

Management and direct supervisors also have a big impact on influencing ethical behavior and creating an ethical work culture. Employed adults ranked the behavior of management (42 percent) and direct supervisors (36 percent) as the top two factors contributing to the promotion of an ethical workplace.

"In order to encourage high ethical standards within our organizations, we first have to provide an environment that is conducive to ethical behavior," said Sharon L. Allen, Chairman of the Board at Deloitte & Touche USA. "However, management and leadership have a huge responsibility in setting examples for their organizations and living the values they preach if they want to sustain a culture of ethics."

Posted 6/20/07

Back To Top

* * *

Working Time Around the World: Trends in Working Hours, Laws and Policies in a Global Comparative Perspective

Most men are working too much, while most women cannot work enough. On a global scale, many find inappropiate working hours to be a major challenge to overcoming poverty.

In a new study released on June 7, 2007, Sangheon Lee, Deirdre McCann and Jon C. Messenger of the International Labor Organization analyzed the distribution of working hours in over 50 different countries.  Results indicated that although there has been some progress in regulating normal working hours in developing and transitioning countries, one in five workers are still working more than 48 hours per week.  Peru is at the top of the list, with 50.9% of its workforce working over 48 hours per week, followed by the Republic of Korea at 49.5%, and Thailand at 46.7%.  In more industrialized countries, the figures are lower.  The United Kingdom has only 25.7% of its workforce working over 48 hours per week, and the United States has 18.1%. 

The study highlights several problems associated with long working hours.  There is less time to be spent with family and greater hazards for workplace injury.  A significant observation is the growing gender gap in working hours.  On average, men are working longer hours than women, which is often a necessity just to survive.  Alternatively, women, in almost all cases, are more likely to work short hours.  They are forced to give up longer hours at a paid job to have time for unpaid work, such as caring for family or those who are ill.  In both cases, it is still very difficult for these workers to break the cycle of poverty.

The researchers suggest two key reasons why it is difficult to regulate working hours – the expanding service sector and the growing number of those involved in informal employment.  Industries such as wholesale and retail trade, hotel and restaurant service, transport, storage and communications are all sources of longer work hours.  In addition, as much as 50% of those employed in the developing world work in the informal sector, with 30% of self-employed men working more than 49 hours per week. 

The study also provides a number of suggested policy points designed to advance decent work in the area of working time. Some of these policy suggestions include:

Posted 6/14/07

In related news... ILO Reports On Asian Labor Conditions: Prospects Shocking. “One thing is clear: doing business as usual is not sustainable over the long term,” said ILO Director-General Juan Somavia. “Asia is experiencing unprecedented growth and development. At the same time, vulnerabilities arising from environmental pressures, economic insecurity, shortcomings in governance and unequal income distribution pose a threat to the region’s future development.”

Recent ILO conference data emerged that noted despite stunning economic growth, more than 50 per cent of the Asian work force, or 900 million workers, still survive on less than US$2 per person, per day. Unemployment rates are slightly higher than ten years ago at 4.7 per cent in 2006, compared with 4.2 per cent in 1996, while the incomes of many workers have deteriorated. About 1 billion people face poor working conditions, lack of job security, benefits and career opportunities. They have less access to information and enjoy fewer market opportunities, voice and representation to articulate their interests.

By 2015, the persistence of the informal economy in Asia, the explosive growth of many Asian countries’ urban populations, and the increase in service-sector employment will combine to significantly expand the urban informal economy.

Posted 9/5/07

* * *

New ILO Global Report on Equality at Work 2007

Despite major progress, workplace discrimination persists and is taking on new forms.

May 10, 2007: The International Labor Organization has released a comprehensive report Equality at work: Tackling the Challenges. It provides a global picture of job-related discrimination, citing both progress and failures in the struggle to fight discrimination ranging from traditional forms such as sex, race or religion, to newer forms based on age, sexual orientation, HIV/AIDS status and disability.

The conclusion is that, “Despite major advances in fighting discrimination at work, mounting inequalities in income and opportunities and significant and persistent forms of workplace discrimination are causing growing concern.”

ILO in Geneva stated that a major theme of the Report is the persistence of gender gaps in employment and pay and the need for integrated policies addressing sex discrimination in remuneration and occupational segregation by sex, while reconciling work and family responsibilities. For example, the report states that throughout the European Union, the difference in average gross hourly earnings between women and men across the economy throughout all establishments has remained high at 15 per cent.

Female labor force participation rates continued to rise significantly, currently at 56.6 per cent, thus narrowing the worldwide gender gap in labor participation rates. However, the report states, progress has been uneven with North America at 71.1 per cent, 62 per cent in the European Union, East Asia and the Pacific at 61.2 per cent and the Middle East and North Africa at 32 per cent.

A key measure of women's improvement is the availability of good-quality jobs for women in legislative, senior official or managerial (LSOM) positions with higher participation rates indicating a reduction of discriminatory barriers. Women still represent a distinct minority in such positions throughout the world, holding only 28.3 per cent of these senior jobs. There is uneven progress across the regions with North America at 41.2 per cent, Latin America and the Caribbean at 35 per cent and the European Union at 30.6 per cent. This indicator has seen the most growth in South Asia, where it has nearly doubled in nine years, however women in this region still hold the lowest share of these jobs at 8.6 per cent.

Noting that the efforts by ILO member States to stamp out workplace discrimination have moved forward significantly, the report says, "The condemnation of discrimination in employment and occupation is today almost universal, as is the political commitment to tackle it."

The need to combat discrimination at work is more urgent than it was four years ago, said ILO.  "In the face of a world that appears increasingly unequal, insecure and unsafe", adding that "significant and persistent inequalities in income, assets and opportunities dilute the effectiveness of any action aimed at combating discrimination. This may lead to political instability and social upheaval, which upset investment and economic growth."

Posted 6/11/07

Back To Top

* * *

The Top 50 Companies for Diversity in the US

Survey Shows Connection Between Workplace Diversity and Stock Performance

DiversityInc, a monthly US-based business magazine that reports on diversity in the workplace, has released its fourth annual list of the Top 50 Companies for Diversity, which demonstrate consistent strength in the four areas the survey measures: CEO Commitment (the most heavily weighted), Human Capital, Corporate Communications and Supplier Diversity.

According to DiversityInc, for the fourth year in a row, the Top 50 companies, expressed as a stock index, beat the Standard & Poor's 500, the Dow Jones Industrial Average and the Nasdaq, demonstrating the connection between superior diversity management and sound corporate governance, which produces a consistent return on equity for investors.

The list is determined by responses to a 230-question survey sent to any company requesting it that has more than 1,000 employees, which is also is used to determine 8 specialty lists - Recruitment & Retention, Supplier Diversity, African Americans, Latinos, Asian Americans, Executive Women, GLBT Employees, and  People With Disabilities.

Key Findings Include:

- People of Color: Twenty-five percent of Top 50 companies' management are people of color, compared with 12 percent people of color in management nationwide

- Same Sex Couple Benefits: One hundred percent of the Top 50 offer domestic-partner benefits for same-sex couples, compared with 53 percent of Fortune 500 companies

- Gender Orientation: Seventy-four percent of the Top 50 include gender orientation in their nondiscrimination policies, compared with only 24 percent of the Fortune 500

- Supplier Diversity: Top 50 companies spend 9.7 percent of their procurement budgets with minority- and women-owned suppliers, compared with just 2 percent nationally

- Executive Compensation: Ninety-six percent of the Top 50 companies link executive compensation to diversity goals

The Top 50:

1. Bank of America
2. Pepsi Bottling Group
3. AT&T
4. The Coca-Cola Co.
5. Ford Motor Co.
6. Verizon Communications
7. Xerox Corporation
8. Consolidated Edison Co. of New York
9. JPMorgan Chase
10. PepsiCo
11. Wachovia
12. PricewaterhouseCoopers
13. Sodexho
14. Procter & Gamble
15. Blue Cross and Blue Shield of Florida
16. Novartis Pharmaceutical Corp.
17. Johnson & Johnson
18. Merck & Co.
19. Deloitte & Touche USA
20. Wells Fargo
21. Turner Broadcasting System
22. Citigroup
23. American Express
24. Prudential Financial
25. Cox Communications
26. Colgate-Palmolive
27. Kaiser Permanente
28. Sprint Nextel Corp.
29. Sempra Energy
30. Abbott
31. KeyBank
32. General Mills
33. Health Care Service Corp.
34. General Motors
35. Eastman Kodak Co.
36. HSBC-North America
37. Comerica
38. Cummins
39. MGM MIRAGE
40. Allstate
41. Wal-Mart Stores
42. DaimlerChrysler
43. Ernst & Young
44. Bausch & Lomb
45. Darden Restaurants
46. FedEx Express
47. Marriott International
48. Starwood Hotels & Resorts Worldwide
49. Comcast
50. Hewlett-Packard Co.

Posted 3/27/07

Back to Top

* * *

In 2006, Job Bias Charges in U.S. Edged Up For First Time in Four Years

Race and Sex Discrimination, Retaliation Most Frequently Filed Cases,
Reports Government Agency

The U.S. Equal Employment Opportunity Commission (EEOC), which enforces federal laws prohibiting employment discrimination, revealed in its 2006 Fiscal Year data that it received a total of 75,768 discrimination charges against private sector employers last year, up from 75,428 in 2005 and the first increase in charge filings since 2002.

Among the findings:

1. Charges based on race, sex, and retaliation were the most frequent allegations, as in past years. 
2. All charges – except age and equal pay - edged up from in 2005.
3. A record 4,901 pregnancy discrimation charges were filed with the EEOC and with state and local Fair Employment Practices Agencies combined.

"These figures tell us that discrimination remains a persistent problem in the 21st century workplace," said EEOC Chair Naomi C. Earp. 

The chart below, also online at http://www.eeoc.gov/stats/charges.html, depicts the number of charges by category from 1997 to 2006:

For more on the statistics and EEOC see http://www.eeoc.gov/stats/enforcement.html

Posted 2/7/07

Back to Top

* * *

U.S. Lags in Family Friendly Workplace Policies

Research by McGill and Harvard Universities highlights gap in
government oversight of corporate workplace conditions

U.S. policies to ensure decent working conditions for families still lag dramatically behind those of all high-income countries and many middle- and low-income countries, according to a study released on February 1, 2007 by McGill University's Institute for Health and Social Policy (IHSP).

Using updated and expanded data from her 2004 Harvard University study, IHSP Director Dr. Jody Heymann, finds in The 2007 Work, Family, and Equity Index: How Does the U.S. Measure Up? that:

• Maternal Leave: Out of 173 countries studied, 168 guarantee paid maternal leave, with 98 of these countries offering 14 or more weeks of paid leave. The U.S. provides no paid leave for mothers. Lesotho, Liberia, Swaziland and Papua New Guinea are the only other countries studied that do not guarantee leave with income to mothers.
  
  
• Paternity Leave: Sixty-five countries grant fathers either paid paternity leave or paid parental leave, with 31 of these countries offering 14 or more weeks of paid leave. The U.S. guarantees fathers neither paid paternity nor paid parental leave.
  
  
• Breastfeeding: At least 107 countries protect working women's right to breastfeed and the breaks are paid in at least 73 of these countries. The U.S. does not guarantee the right to breastfeed, even though breastfeeding is demonstrated to reduce infant mortality one-and-a-half to five-fold.
  
  
• Sick Days: At least 145 countries provide paid sick days for short- or long-term illnesses, with 127 providing a week or more annually. The U.S. provides unpaid leave only for serious illnesses through the Family & Medical Leave Act, which does not cover all workers, and has no federal law providing for paid sick days.
  
  
• Annual Leave: One hundred and thirty-seven countries require employers to provide paid annual leave. The U.S. does not.
  
  
• Maximum Length of Workweek: At least 134 countries have laws that fix the maximum length of the work week. The U.S. does not have a maximum work week length or a limit on mandatory overtime per week.
  
  
• Day of Rest: At least 126 countries mandate that employers provide a day of rest each week so workers are not required to go for long periods without a day off. The U.S. does not.

"More countries are providing the workplace protections that millions of Americans can only dream of," said Dr. Heymann, the study's lead author, founder of the Harvard-based Project on Global Working Families and Director of the McGill Institute for Health and Social Policy.

"The U.S. has been a proud leader in adopting laws that provide for equal opportunity in the workplace, but our work/family protections are among the worst. It's time for change."

Posted 2/5/07

Back to Top

* * *

Employee Confidence in Values of U.S. Senior Management Declining

Fewer Than Half of U.S. Workers Trust Their Bosses, Study Finds

American employees' confidence in the values of their companies' senior management has declined over the past two years, according to a survey by Watson Wyatt Worldwide, a global consulting firm.

Watson Wyatt’s WorkUSA® 2006/2007 survey of 12,205 full-time U.S. workers across all job levels and major industries showed that only 55 percent believe that thier senior management behaves consistently with the company’s core values (down from 57 percent in 2004) and only 49 percent of employees said they have trust and confidence in the job senior managers are doing (down from 51 percent in 2004).

“This dip in ratings is concerning because employees’ attitudes about their senior leaders are a key factor in building engagement,” said Ilene Gochman, national practice director for organization effectiveness at Watson Wyatt. “People want to work for companies where they have confidence in the organization and trust what senior management is doing. Fostering that trust is especially important in today’s global market as it creates an environment in which employees understand that changes to the workplace may be necessary to remain competitive.”

The survey also found considerable disparities among companies in the frequency of senior management’s communication with employees. Forty-three percent of employees reported that their firm’s senior management takes an active, visible role in communicating to employees, down from 45 percent in 2004.

“Communication is often thought to be the direct supervisor’s role,” Gochman said, “but companies can create stronger teams and fuel excitement about the future if senior managers lay out the broad frameworks the firm will follow and supervisors reinforce that message. By engaging employees, such communication has a direct impact on the bottom line.”

For more on the Watson Wyatt WorkUSA® 2006/2007 survey click here.

Posted 1/8/07

Back to Top

* * *

Building a Corporate Culture of Compliance is the Key Driver in
Widespread Use of Anti-Corruption Programs

The commitment of senior corporate management leadership and personal convictions are the most important drivers in company decisions to strengthen anti-corruption programs, according to a Conference Board report. Resisting Corruption: An Ethics and Compliance Benchmarking Survey, written by Conference Board principal researcher Ronald Berembeim, was released on Dec. 5, 2006. It is based on a mid-2006 survey of 165 multinational companies conducted by The Conference Board in collaboration with the Ethics and Compliance Officer Association (ECOA).

Management, Culture Main Drivers For Anti-Corruption Programs

Thirty three percent of those surveyed say senior management leadership and conviction is the single most important factor in their company's decision to develop an anti-corruption program.

Companies now, as in a similar 2000 survey by The Conference Board, seldom cite a bottom-line rationale for anti-corruption programs. Instead, they cite legal (e.g., General home country prohibitions were picked as the single most important factor by 27 percent of the participating companies while 7 percent accorded Sarbanes-Oxley Section 404 (2002) this designation) or ethical (bribery is wrong — 13 percent) considerations as justifications for investing in anti-corruption initiatives.

Significantly more respondents (two-thirds) say that their company has a formal anti-corruption program in the current survey than in the 2000 survey (half). Company anti-corruption statements are also more detailed and precise than they have been in the past. For example, descriptions and labeling of corrupt practices and discussion of structures and procedures that support the company's anti-corruption policy are today much more common than six years ago.

Anti-corruption programs are subject to high levels of review. More than three-quarters of the survey participants report or, in some cases, have dual reporting relationships to a C-Suite executive, board member or board committee.

Chief legal officers are much more likely to be involved in all phases of the program (development, implementation, monitoring) than they were in the past. In addition, companies are now more likely to seek outside assistance in some aspect of their anti-corruption program. Nearly one-third (32%) used outside counsel compared to the 21% that did so in 2000, and 18% used a consultant. The 2000 survey did not ask if companies used consultants.

China Major Challenge to Implementing Anti-Corruption Programs

More than 40% of the survey participants do business in China, Brazil, Mexico, and India, countries that are at high risk for corrupt practices in business. According to 36% of the companies active in China, that country poses "the greatest overall challenge to the company's operations because of the level of corruption."

Facilitation payments (a fee paid to an individual who performs no necessary services) may be the most vexatious anti-corruption policy issue. However, in recent years, the trend has been for companies to become more restrictive in the policies that allow employees to make these payments. In 2000, 19% of the surveyed companies said that within the last three years their policy has become more restrictive. In 2006, 27 companies moved in this direction.

The most common reason given for the institution of more restrictive facilitation policies was the company's involvement in some kind of global anti-bribery network such as Transparency International or the International Chamber of Commerce Significantly more companies now say that hotlines or helplines can be effective (40% compared with 18% in 2000). But the highest number of companies (11) cited whistleblowing programs as the anti-corruption measure that was ineffective.

Disclosure of Corruption Incidences Rare

Other than Internet posting, company sharing of information regarding anti-corruption programs and disclosure of corrupt practices (even in sustainability reports) are rare.

For the Full Report Follow This link

Posted 12/12/06

Back to Top

* * *

Study Shows Most U.S. and Canadian Business Students Are Ethically Minded

A Net Impact Study of MBA Student Opinions on the
Relationship between Business and Social/Environmental Issues

To view as .pdf

Between September 15 and October 15, 2006 Net Impact -  a nonprofit organization with over 130 student and professional chapters on 4 continents, whose mission is to grow and strengthen a network of leaders who are using the power of business to make a positive net social, environmental, and economic impact – conducted an online survey to measure current opinions among U.S. and Canadian MBA students about the relationship between business and broader social and environmental issues. It sent a 31-question, online survey to club leaders at 100 MBA programs in the U.S. and Canada, asking them to send the survey to their student body email list.

Response Rates
• 2,112 current MBAs responded
• 87 programs were represented
• 41 programs had 10+ student responses
• 13 programs had 50+ respondents

Respondent Profile
 70% of respondents are in the 1st year of their program
• 87% are in a full-time MBA program
• 37% of respondents are currently Net Impact members; 38% would consider or like to learn more; 25% are not interested in joining
• 68% are originally from the United States; 85% are at school in the United States
• 45% of respondents are female; 34% are people of color

 
Findings
Only 1/3 of respondents prefer to work in medium to large businesses five to ten years in the future, down from 2/3 immediately following business school.

Five to ten years after you received your MBA degree, which employment site would you prefer at that time? (N = 2113)

Immediately after you receive your MBA degree, which employment site do you most prefer to work in? (N = 2111)

The majority of students express an interest in learning about corporate social responsibility, sustainability, international development, and social entrepreneurship during their MBA.

Please indicate whether or not you would like to learn more about any of the concepts while you are pursuing your MBA. (N=2104)

The majority of students say that CSR (corporate social responsibility) should be integrated into core (required) business school classes.
• Overall, 78% agree with this statement
• For students not interested in Net Impact membership, 64% agree

The majority of students say that during their career they will seek a job that is socially responsible.
• Overall, 79% agree with this statement
• For students not interested in Net Impact membership, 60% agree

The majority of students say that business professionals should take into account social and environmental impacts when making business decisions.
• Overall, 89% agree with this statement
• For students not interested in Net Impact membership, 81% agree

The majority of students say they believe that businesses should work towards the betterment of society [such as a healthier environment, the eradication of poverty, and other societal issues].
• Overall, 81% agree with this statement
• For students not interested in Net Impact membership, 66% agree.

Few students believe that most corporations are currently working towards the betterment of society.
• Overall, 18% agree with this statement
• For students not interested in Net Impact membership, 24% agree

Women are more likely than men to seek socially responsible careers (87% v 74%).

Registered Democrats are more likely than registered Republicans to seek socially responsible careers (86% v 68%).

Conclusion
Current MBAs believe that social and environmental issues are important considerations for business. They think that social and environmental topics should be integrated into the business school curriculum. Most students will look for jobs during their career that are socially responsible, and many plan to look beyond the traditional employment site of MBAs, medium and large businesses. MBAs believe business employees should consider the social and environmental implications of business decisions, and they believe that currently few corporations are improving society.

Further analysis of these results will be published in December 2006, with analysis of responses by geography, public v. private institution, and citizenship of respondent.

For further information, please contact Net Impact Executive Director Liz Cutler Maw at 415-984-3300 x306 or lmaw@netimpact.org.

Posted 11/2/06

Back to Top

* * *

Employee Decision Making: Barriers and Drivers in Ethical Behavior

To download as .pdf

In March 2006 the Institute for Supply Management (ISM), the world’s largest supply management* association, released the findings of its survey of 1,245 supply managers and employees that interact with them concerning ethical behavior within their organizations. In analyzing the surveys findings, ISM differentiates between two types of unethical behaviors (1) Deceitful Practices, which include activities such as inventing (making up) a second source of supply to gain competitive advantage and purposefully misleading a supplier in a negotiation; and (2) Subtle Practices, such as sharing confidential information about one supplier with another supplier and allowing gifts or entertainment to influence sourcing decisions. While most of the surveys were initially sent to supply managers, the questions and findings are relevant to company-wide ethics policies and cultures, and provide useful information for companies seeking to improve their ethics programs and policies by learning which factors most influence ethical behavior.

The following, excerpted with permission from the report**, are ISM’s findings on what barriers to ethical practices and drivers of unethical practice most influence employee decision making:

BARRIER-RELATED FACTORS APPLIED TO ETHICAL PRACTICES

Tables 2 and 3 list a set of conditions that can affect ethical behavior. The presence of one or more of the conditions can facilitate subtle or deceitful practices. These 10 barriers were entered into a multiple regression analysis for each of the sets of practices, and those barriers that significantly relate to the practices are highlighted in each of the tables. In the case of deceitful practices, differing standards across functions, a lack of internal consequences for unethical activity, business priorities taking precedence over ethical practices, supplier pressures to engage in unethical activity and pressure to perform within the respondent’s organization all lead to significantly higher levels of unethical practices. Regarding subtle practices, ineffective training, regulatory complexity and supplier pressures were all significantly related to higher levels of unethical activity.

These findings have several interesting implications. First, it would appear that a lack of training, defined as either a total lack of training or providing ineffective training, can lead to higher levels of subtle practices. This would suggest that providing more and better training might lessen employee involvement in subtle practices. Conversely, the finding of no relationship between a lack of training and deceitful practices suggests that employees will engage in deceitful practices regardless of training provided. It is likely that employees are already aware that these deceitful practices are unethical, and that training will not affect their decision of whether to engage in these activities. Instead, deceitful practices are affected by a lack of internal consequences (including a failure to enforce internal sanctions and punishments against unethical behavior), business priorities taking precedence over ethical behavior and pressure to perform well by meeting or exceeding metrics, often with associated time pressures. These findings suggest that organizations might lower the incidence of deceitful practices by attempting to refocus their culture from one of a strict and perhaps short-term goal of improving the bottomline to one that considers the bottomline in concert with ethical issues. Many of these issues are discussed in more depth next.

* Adjusted R2 from multiple regression analysis = 0.1710 (F = 21.61, p<.0001). Bolded items are significantly related to the Deceitful Practices dependent variable.

Table 3: Barriers That Enable Subtle Practices*

* Adjusted R2 from multiple regression analysis = 0.0832 (F = 10.07, p<.0001). Bolded items are significantly related to the Subtle Practices dependent variable.

DRIVERS OF ETHICAL PRACTICES

Six potential drivers of unethical practices are shown in Tables 4 and 5. Two of these drivers result in significantly lower levels of deceitful practices — individual employee values and a people-oriented organizational culture that promotes corporate citizenship — and one antecedent results in significantly higher levels of deceitful practices — an organizational culture (also see Appendix 1) that focuses on short-term bottomline gains. These same relationships hold in the case of subtle practices. In addition, subtle practices can be lessened through the development and use of written corporate policy that includes explicit sanctions and punishments for unethical behavior. The survey results suggest that individual values are a key facilitator of ethical behavior in the case of both deceitful and subtle practices. Some of the comments by survey respondents to our open-ended questions perhaps best summarize this finding:

“Ethics are part of a person’s values. If the person is ethical, then their dealings with suppliers will be on a good basis.”

“Integrity is who you are when no one else is looking. It comes from within.”

“I believe that the moral character is the most important factor in ethical behavior. Especially since the people who know the rules generally know how to get around them, if they want to.”

Respondents also suggested that the values of individuals could be further supported by a company’s culture:

“Ethics begin with the quality and moral values of the employees, and fortunately we have very good people. The company, in turn, is supportive of their efforts.”

“The standard is the highest ethical behavior. It is a subject covered in interviews when hiring senior employees. The standard and example are in the culture.”

“It is all up to the individual. I must add, however, that the environment surrounding the individual will go a long way to help sway the individual’s train of being.”

“Ethical behavior is brought with the employee when employment begins. The working environment can and often does influence those with moral/ethical boundaries that are not well-defined. That makes the selection of employees with high standards critical. It also points to the responsibility of the employer to provide a working environment that requires/expects only the highest level of ethical behavior, and models such behavior at all levels of management.”

Conversely, an organizational culture that focuses on short-term gains can lead to higher levels of unethical practices among employees, as shown in Tables 4 and 5, and as highlighted by this comment:

“I believe that the business trend of always beating the last quarter profits is hurting organizations ethically. People are always creating arms-length relationships because there might be something better down the road. In fact a strong supply base can only be built around those suppliers who are fair to their customers and also to themselves. Until U.S. businesses understand this, there will always be room for those unethical suppliers who are just trying to make a quick sale for this quarter’s numbers.”

Finally, the use of policies and procedures appears to reduce subtle ethical practices, but not deceitful practices. One explanation for these findings is that communication of policies can create awareness of some of the subtle, “grey” ethical issues that might exist. Conversely, the deceitful practices consist of activities that most employees already recognize as being ethical improprieties, mregardless of the presence of ethical policies and procedures. As was stated by one study participant regarding policies and training:

“Most people know right from wrong — but the ‘grey’ cases, which are most of the situations, can be problematical.”

* Adjusted R2 from multiple regression analysis = 0.1279 (F = 29.98, p<.0001). Bolded items are significantly related to the Deceitful Practices dependent variable.

* Adjusted R2 from multiple regression analysis = 0.0792 (F = 18.04, p<.0001). Bolded items are significantly related to the Subtle Practices dependent variable.

USE OF SURVEY RESULTS

The survey was designed to provide practical information and suggestions for use by management across disciplines and by supply professionals. Compare and contrast the policies and procedures of your organization to get a sense of how you measure up to the results of the study. Then use the study results to determine where you can most effectively influence individual behaviors and company practices.

For the Full Report, “Social Responsibility and the Supply Management Profession: A Study of Barriers and Drivers of Ethical Practices,” see ISM’s website, or follow this link.

KPMG's 2005-2006 Integrity Survey

Between 2000 and 2005 the U.S. experienced a wave of corporate scandals followed by the passage of a wide variety of new regulations. KPMG Forensic’s 2005-2006 Integrity Survey, based on the perceptions of over 4,000 employees in U.S. companies, seeks to guage what effects these reforms have had on corporate misconduct.

The survey is divided into five sections with graphs explaining the details of its findings:

1. Overall Results (the prevalence, nature, prevention, and detection of misconduct; corporate response to misconduct; and the perceived corporate
    
2. Comparison of 2000 and 2005 Data
   
   
3. Impact of Ethics and Compliance Programs (with roughly the same categories as Section 1)

4. Meeting the Regulatory Challenge (explanations of reforms that have taken place between 2000 and 2005: Sarbanes-Oxley of 2002; new corporate governance listing standards in the New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotation (NASDAQ) system; new federal sentencing guidelines that require the establishment of corporate codes and ethics programs for certain organizational defendants, amendments to the Department of Justice’s prosecution policy for organizational defendants; and court rulings that increase director and officer liability for their employees’ misconduct.
   
   
5. Background and Methodology of the Survey (the results of the survey are based on responses from 4,056 U.S. employees, spanning all levels of job responsibility, 16 job functions, 11 industry sectors, and 4 thresholds of organizational size)

Executive Summary of KPMG’s 2005-2006 Integrity Survey:

Nearly three out of four employees reported that they had observed misconduct in the prior 12-month period, with half of employees reporting that what they had observed was serious misconduct that could cause “a significant loss of public trust if discovered.”

Between 2000 and 2005, employees reported:

- Consistent levels of overall misconduct, with 74 percent reporting in 2005 that they had observed misconduct, compared with 76 percent in 2000

-Consistent levels of serious misconduct, with 50 percent in 2005 characterizing the misconduct they had observed as serious, compared with 49 percent in 2000

Although the level of observed misconduct has remained constant, employees reported that the conditions that facilitate management’s ability to prevent, detect, and respond to fraud and misconduct within companies are improving.

Between 2000 and 2005, employees reported the following positive changes in conditions and attitudes:

- Pressure to engage in misconduct to meet business objectives has decreased.

- The adequacy of resources available to meet targets without cutting corners has improved.

- Apathy and indifference toward codes of conduct have declined.

-Comfort levels in using a hotline to report misconduct have risen.

-Confidence that appropriate action would be taken in response to alleged improprieties has increased.
- Confidence that whistleblowers would be protected from retaliation has increased.

- Perceptions of chief executive officers and other senior executives as positive role models have improved.

- The perception that top management is approachable if employees have questions about ethics or need to deliver bad news has increased.

-The perception that business leaders would respond appropriately if they became aware of misconduct has increased.

Employees who work in companies with comprehensive ethics and compliance programs reported more favorable results across the board than did those who work in companies without such programs. For instance, employees who work in companies with such programs reported fewer observations of misconduct and higher levels of confidence in management’s commitment to integrity.

At companies with ethics and compliance programs:

- Employees reported fewer observations of misconduct.

- A significantly higher percentage of employees reported that their colleagues felt motivated and empowered to “do the right thing.”

- A significantly higher percentage of employees reported that their colleagues felt comfortable raising and addressing ethics concerns.

- A significantly higher percentage of employees believed their CEOs and other senior executives valued ethics and integrity over short-term business goals.

For the full survey please see KPMG’s website here.

Back to Top

* * *

Back to Top

* * *

U.S. Business Views of Critical Ethics Issues

An important survey of corporate attitudes to ethics has been published by the Center for Corporate Citizenship at Boston College , supported by the U.S. Chamber of Commerce. Survey results include:

Executives fall into two camps regarding business’ role in society. Slightly more than six in 10 perceive business as balancing the interests of multiple stakeholders, including investors, employees, consumers, communities, and the environment. The remaining respondents take a more compliant perspective focused on fulfilling employee and shareholder obligations. And while all companies engage in similar corporate citizenship activities, large companies are far more likely to have an expansive definition of their role in society. Among large companies:

Engagement is largely driven by internal considerations – seventy-three percent of companies cite their company’s traditions and values as the primary actuating factors – and few respondents name employees (16%), top management (10%), or middle management (8%) as hindrances in their corporate citizenship efforts. Despite this internal recognition of corporate citizenship importance, 54% of executives report that a lack of resources is their biggest barrier. And while executives clearly view their role as societal stewards as important, the findings suggest a modest gap between executives’ expressed attitudes and the actions companies are actually undertaking.

.

The findings do reveal that, across the board, companies are actively engaged in public life. Private sector involvement in social issues includes environmental protection, supporting education, and economic development in our poorest communities. The means by which each company relates to society is unique, and there is no one universal corporate citizenship strategy.  Details at The State of Corporate Citizenship in the U.S.: Business Perspectives in 2005.

Back to Top

* * *

International Business Ethics Review
Spring/Summer 2005, published by the International Business Ethics Institute

The Review contains an article by former Lockheed and World Bank ethics executive Anita B. Baker on international developments in evolving common ethics standards. The article examines a range of codes and initiatives. Dr. Baker notes that an increasing number of companies are developing their own codes of conduct by drawing from “over 100 sets of international standards and guidelines.” Convergence in a number of areas appears to be evolving, and an increasing number of academics are researching this fertile area.

Back to Top

.

.

.

.