Ethisphere®, the global leader in defining and advancing the standards of ethical business practices, has unveiled the latest volume of its 2023 Ethical Culture Insights Report. The report derives insights produced from Ethisphere’s proprietary Ethical Culture Quotient (CQ) data set, which studies the elements of ethical culture, such as whether employees will report any ethical wrongdoings within their organization.
Data for this report was collected from an Ethisphere survey of over two million global employees from Ethisphere’s client base between 2016 through the end of Q3 2022. The 54-question survey focused on reporting behavior and how the behavior reflected certain realities around organizational speak-up culture.
Key Findings from the Report:
- Ethical culture within businesses increased across the board – Based on Ethisphere’s Eight Pillars of an Ethical Culture, respondents showed more favorable perceptions of their company’s ethical culture during the pandemic. Like all businesses, respondents faced greater turmoil during the last few years. But even amid such trying conditions, the culture of ethics they had in place before COVID-19 grew even stronger – helping to reduce risk, retain talent, and build value within their organizations. However, during the pandemic, although people became more willing to report misconduct and observed more of it, they tended to report it less.
- Claims of bullying increased significantly – In stark contrast to the other 26 types of reported misconduct, Ethisphere’s report found that bullying jumped a shocking 13 percent during the past few years. The report highlights several possible explanations for this significant increase, including the increasing presence of Gen Z employees, who as an age cohort report high levels of workplace bullying, as well as high levels of bullying in general. This increase also correlates with an increase in bullying during the pandemic, especially as people spent more time on-screen.
- Gen Z employees are least likely to report misconduct – While Gen Z represents a smaller portion of the data set from this research, it is interesting to note they are the least likely age group to report bad behavior. When compared to their Millennial, Gen X, and Boomer colleagues, 56 percent of Gen Z employees stated that they did not report misconduct when they saw it because they didn’t believe corrective action would be taken, followed by 47 percent who feared retaliation.
- Managers matter – More than half of respondents (56 percent) named their immediate manager as the avenue by which they reported misconduct, which aligns with prior Ethisphere cultural reports for being the most common method of reporting misconduct. This underscores the importance of businesses preparing their managers to facilitate discussions around raising concerns and proactively set corporate-wide expectations around what reporting, investigations, and actions will entail.
“Culture has become a topic of critical importance to every corporate stakeholder – employees, consumers, investors and regulators. At Ethisphere, sharing our data and expertise – so that all can learn and improve – is central to our mission,” said Erica Salmon Byrne, Ethisphere’s chief executive officer. “Our latest report covers top trends from our global dataset, which has grown to over two million employee responses. With a number that large, we can do multiple demographic data cuts, including a pre-pandemic and pandemic era analysis, a generational analysis, and an update on the importance of managers. Why managers? Our data shows that 62 percent of employees who made a report say they took their concern to their manager. These front-line employees are critical to ensuring that an ethical culture is embedded across an organization and that reports are effectively addressed.”
Reporting Methodology
The data in Ethisphere’s 2023 Ethical Culture and Compliance Perceptions Assessment derives from a confidential, online survey administered by Ethisphere from 2016 through the end of Q3 2022. Over two million employees from around the world responded to a 54-question survey focused on reporting behavior and how the behavior reflected certain realities around organizational speak-up culture, representing the views of employees across the Ethisphere’s global client base. Data classified as “pre-pandemic” was received prior to March 2020.
Questions were presented using the framework of Ethisphere’s Eight Pillars of Ethical Culture and consisted of questions with Likert-scale “strongly agree” to “strongly disagree” response options, multiple select, and open comment questions. Participating companies were provided the ability to configure or remove survey questions. Further details on the reporting methodology can be found in the report.
Ethisphere’s Eight Pillars of Ethical Culture
The Eight Pillars of ethical culture that Ethisphere measures are:
- Awareness of Ethics and Compliance (E&C) Program and Resources
- Perceptions of the Effectiveness of the E&C Function – Training, Communications, etc.
- Observing and Reporting Ethical Misconduct
- Pressure to Compromise Standards to Meet Goals
- Organizational Justice – Perceptions of Wrongdoer Accountability Across Roles
- Manager Perceptions – Supervisor Conduct and Ability to Approach with Concerns
- Perceptions of Conduct, Values and Communications of Senior Leadership
- Perceptions of Values and Priorities Among Peers and Environment
These eight foundational pillars serve as a framework for systematically and objectively capturing employee sentiment on the formal and informal ethical systems of the enterprise. Developed by Ethisphere experts in collaboration with members of its Business Ethics Leadership Alliance (BELA), each pillar is designed to provide insights that lead to clear action and remediation (or praise) where it is most needed. The report provides excellent takeaways for all companies, but also provides data that leaders can use to determine if their ethics programs are lacking and if they need additional help in building a strong culture.