Increasing Employee Reporting Free From Retaliation

Insights From The National Business Ethics Survey® 2013

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ECI’s latest National Business Ethics Survey (NBES®), reveals that culture, leadership and values-based ethics and compliance (E&C) programs make a big difference in increasing employee reporting of workplace misconduct free from retaliation. The research shows that in organizations with effective, values-based ethics and compliance programs, employee reporting of wrongdoing increases by 61 percent. These values-based program efforts also decrease retaliation by as much as 93 percent. The likelihood of retaliation against reporters is also lessened in instances where employees believe that individuals at all levels of the organization are held accountable if they violate company standards or the law.

This study was created by the Ethics Research Center (ERC), the research arm of ECI, and made possible in part by support from KPMG LLP.


KPMG International’s trademarks are the sole property of KPMG International and their use here does not imply auditing by or endorsement of KPMG International or any of its member firms.


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The State of Ethics in Large Companies

A Research Report from the National Business Ethics Survey® (NBES®)

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Large companies can dramatically improve their integrity by implementing effective ethics and compliance programs to reduce employee misconduct and improve every key measure of workplace behavior.  On average, large companies (90,000 or more employees) with effective programs face half of the rules violations as those without effective programs.  Their employees experience less retaliation for blowing the whistle on rule-breaking and feel less pressure to compromise standards.

Drawing on data from ERC’s most recent National Business Ethics Survey®, the study also credits effective programs and strong ethics cultures for making it more likely that employees will report wrongdoing when they see it.   Nearly nine of ten employees (87 percent) who observe violations at large companies with effective programs report those violations for action by higher ups, compared to just 32 percent who report wrongdoing when programs are lacking.  That’s significant because reporting is essential for identifying and eliminating potential ethics risks.

“Companies that invest in ethics reap an enormous return,” ERC CEO Patricia Harned said. “Better workplace ethics cuts business risks by reducing the chance that serious ethics problems will throw companies off course and distract them from their core business.”

The report “The State of Ethics in Large Companies” is the first released by ERC as part of the
Ethics & Compliance Initiative.

The report was made made possible in part by support from our sponsor:

Center for Audit Quality

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Ethical Leadership

Ethical Leadership: Every Leader Sets a Tone
A Research Report from the National Business Ethics Survey® (NBES®)

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Employee Views of Leaders’ Personal Conduct Drives Perceptions of their Ethical Leadership.  Workers’ Judge Leaders Primarily by Three Factors.

Corporate leaders who are perceived by their employees as demonstrating strong personal character are much more likely to be perceived as setting a strong tone from the top.

It is often said that a strong tone for ethics begins at the top,” ERC Chief Executive Officer Patricia Harned said. “The value of this report is that it specifically identifies the most important things that leaders can do to set that tone.

ERC also found, however, that direct supervisors also can have a significant impact when comes to modeling good behavior, keeping promises, and upholding company standards. It concluded that ethics is increasingly a 24-7 job because workers expect their managers to behave ethically off the job as well as in the workplace.

Everything a leader does sets a tone,” Harned said. “Leaders and companies need to recognize that the line between public and private gets less clear every day.

ERC recommended that companies that want to support strong ethical leadership should:

  • Seek out personal character when hiring and make 24-7 integrity a job expectation.
  • Educate managers about the way employees evaluate leaders
  • Encourage leaders to share credit for success and seek honest feedback from employees.
  • Annually review business objectives and policies to ensure they promote ethical performance.

This report was made possible in part by a generous contribution by our sponsor, the Raytheon Company.

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Past NBES Research

   First implemented in 1994, the NBES is the national benchmark on business ethics.  

NBES 2013 of the U.S. Workforce
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NBES 2013 reveals substantial good news about the state of ethics in American workplaces.  Observed misconduct is down for the third report in a row and is now at a historic low; the decline in misconduct is widespread; and the percentage of workers who said they felt pressure to compromise standards also fell substantially.

NBES of the Construction Industry
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No industry in America is immune to ethics challenges. In truth, certain industries are just inherently more “at risk” for facing ethics issues depending on the kind of work they do. The construction industry is one such industry, especially given the contexts in which companies conduct business, the safety risks that are inherent to their work, and the performance pressures they face.

NBES of Social Networkers
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Social Networking is changing the workplace. Ethics Resource Center data, first in the 2011 National Business Ethics Survey and subsequently in a supplemental survey of social networkers conducted in 2012, make clear that social networking is now the norm and that a growing number of employees spend some of their workday connected to a social network. More than one in ten employees are “Active Social Networkers” (ASNs) who spend at least 30 percent of their workday linked up to one or more networks.

2011 National Business Ethics Survey (NBES)
Released: January 2012
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From 2009 to 2011, 45 percent of U.S. employees observed a violation of the law or ethics standards at their places of employment. Reporting of this wrongdoing was at all-time high – 65 percent – but so too was retaliation against employees who blew the whistle: more than one in five employees who reported misconduct they saw experienced some form of retaliation in return. According to the 2011 National Business Ethics Survey® (NBES): Workplace Ethics in Transition, ethics cultures in business are also at their weakest point since 2000.

Employee perspectives on ethics truly matter because they provide a real view of what is happening within organizations. Such input helps leaders assess effectiveness and risk using models based on real – not theoretical – information.

2011 NBES Supplemental Reports

2009 National Business Ethics Survey
Released November 2009
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The 2009 NBES Supplemental Research Briefs:

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