Ethics Resource Center Releases Findings on Workplace Misconduct at Fortune 500® Companies

July 24, 2012


Corporate investment in ethics pays off -- employees are more willing than ever to report wrongdoing they observe. Yet levels of misconduct and retaliation remain high. 

Arlington, VA - The Ethics Resource Center (ERC) released today, “The National Business Ethics Survey® of Fortune 500®1 Employees: An Investigation into the State of Ethics at America’s Most Powerful Companies,”  indicating that compared to all companies in the U.S., the highest revenue companies show a higher incidence of misconduct.  

Major findings from the study included: 1) just over half of workers (52 percent) at the highest revenue companies had observed misconduct in the previous 12 months, compared to 45 percent at all companies in the U.S.  2) Seventy-four percent of employees at the Fortune 500®  businesses reported misconduct when they saw it, compared to 65 percent on average for all businesses in the U.S. 3) Sixteen percent of workers at the Fortune 500® companies felt pressure to break the rules, compared to 13 percent at all companies in the U.S.   4) Whistleblowers were slightly more likely to experience retaliation at Fortune 500® companies than at companies in the U.S. overall.
The results of the ERC’s report were released today at the NASDAQ MarketSite.  This study, focused on the Fortune 500® companies, is the most recent in a series of surveys conducted by the ERC.  The ERC has fielded a biennial National Business Ethics Survey (NBES®) since 1994, generating private sector benchmarks on ethics in the workplace. The last NBES was completed based upon 2011 data. The ERC, a nonpartisan nonprofit, makes findings from the NBES research available at no cost to help foster more ethical workplaces. Throughout the years, the NBES has been expanded into a series, making it possible to focus on specific areas of interest.   The new study enables the ERC to compare Fortune 500® companies’ ethics information against all companies in the U.S.
“Strong ethics programs at the Fortune 500® companies are paying off in higher reporting rates,” ERC President Patricia J. Harned said. “That’s important because reporting provides businesses with an opportunity to catch problems early and fix them before they become more pervasive.”
ERC Chairman, and former U.S. Congressman, Michael Oxley added: “The Fortune 500® companies are the leaders of our economy with a lot of revenue and a lot of jobs. Our country also needs them to be ethical role models. The report shows that most companies have strong ethics and compliance programs that could help them do better in the years ahead.” 
The study also showed that greater public scrutiny and pressure for growth, especially at publicly-traded companies, create pressure to compromise standards and tend to result in more misconduct at the country’s high revenue businesses. Employees who feel pressure at work are twice as likely to observe misconduct as those who do not.
Past ERC research has shown that companies with strong programs and cultures consistently report lower levels of misconduct and higher levels of reporting – the two core measures of ethical performance. ERC said the best way for companies to reduce ethics risk is to invest in effective ethics programs and build strong ethics cultures, and it offered specific suggestions for building ethical cultures. 
The report reflects a survey of 2,172 workers at U.S.-based companies with annual revenues of $5 billion or more. The survey was conducted from June 7-13, 2012.
1. FORTUNE 500® from FORTUNE, 5/21/2012 © 2012 Time Inc. Used under license. FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of Licensee (the Ethics Resource Center). FORTUNE is not affiliated with this survey or its creators.