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TRANSCRIPT
Corporate Ethical Culture InsightsLive Webcast | November 8, 2017
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Before We Get Started
§ Today’s presentation and recording will be provided via email after the webcast
§ BELA members can access the materials directly from the resources center on the members site
§ Please submit questions via the chat function on the left-hand side of your screen
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Speakers
Erica Salmon ByrneEVP
Ethisphere
Douglas AllenDirector, Data & Advisory Services
Ethisphere
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Agenda
§ About Ethisphere§ The Eight Pillars of Ethical Culture§ Why Your Employees Are Not Reporting & Other Trends§ Power of Demographic Analysis
§ Culture Quotient Engine§ Implementation Considerations: Lessons Learned
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MEASURE AGAINST STANDARDS
Our corporate ethics standards, vetted by leading experts and used
for 10 years, provide an independent, objective measurement
tool critical to drive business decisions and stakeholder
interaction.
RECOGNIZEEXCELLENCE
We recognize programs and companies who’ve proven that their
programs and practices are extraordinary and provide
mechanisms to help communicate those recognitions.
INSPIREADVANCEMENT
Ethisphere’s global summits, roundtables and publications capture
the leading voices in the field. And our corporate membership group provides unparalleled networking
opportunities.
Ethisphere is the Global Leader in Advancing the Standards of Ethical Business Practices
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Actionable DataDrives Decisions
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Ethisphere’sBenchmark Data
Industries Represented
Greatest representation from Manufacturing, Healthcare, Financial Services, Utilities
HeadCount 40% have greater than 10,000 employees worldwide
FinancialFootprint 71% generate more than $1B (USD) in annual revenue
GlobalReach Input from 28 languages; nearly 40 percent outside U.S.
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Awareness of the Program &
Resources
Perceptions of the Function
Observing & Reporting
MisconductPressure
Organizational Justice
Manager Perceptions
Perceptions of Leadership
Perceptions of Peers and
Environment
Ethisphere’s Eight Pillars of an Ethical Culture
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Pillars Earning the Highest and Lowest Employee Perception Scores
Awareness of the Program & Resources
Perceptions of the Function
Manager Perceptions
Observing & Reporting Misconduct
Pressure
Organizational Justice
Perceptions of Leadership
Perceptions of Peers and Environment
92%
89%
87%
87%
70%
71%
74%
84%
94%
67%
59%
49%
47%
41%
19%
1%
It is the right thing to do
Corrective action is necessary
My manager will support me
Senior leadership will support me
The reporting is anonymous
My co-workers will support me
If I don't do it, no one else will
Other (Please specify):
Percentage of Respondents Who Indicated They Would Be Willing to Report Misconduct if Observed
Leadership support is critical, but
doing the right thingis the primary reason why employees are willing to
report a concern.
Why Are Employees Willing to Report?Because It’s the Right Thing to Do
40%
40%
30%
21%
10%
9%
6%
I don't believe corrective action would be taken
I fear retaliation
Lack of anonymity in the reporting process
The person who committed it was senior level
I’m not concerned
Other
I am not sure whom to contact
Percentage of Respondents Who Indicated They Would Not Be Willing to Report Misconduct if Observed
Fear and a lack of transparency are leading causes for why employees are
not willing to report
Why Aren’t Employees Willing to Report?Fear and Lack of Transparency
Where are Employees Reporting?Managers Over Hotlines.
62%
32%
18%
17%
8%
7%
7%
My immediate manager
Human Resources representative
My manager’s manager
Compliance & Ethics representative
Compliance web reporting portal
Other
Compliance reporting helpline
Percentage of Respondents That Reported Misconduct in Past 12 Months
Don’t over-invest in communication channels that your employees aren’t using.
Employees are nearly 8x more likely to go to their Immediate Manager with concerns instead of using the Reporting Helpline or Web-Based
Portal
0.67
0.62
0.81
Disciplinary Actions Are Taken
The Rules Are the Same for All
If I Raise A Concern, It Will Be Investigated
n = 143,290
Proportion of Favorable Responses to All Responses
Inequitable Treatment Driving Factor in Low Sense of Organizational Justice
Occasionally, Frequently, Rarely, or Declined to Answer
n = 163,150
Percentage of Overall Respondents
77% 23% Do You Experience Pressure to
Compromise the Code, the Law, or Policy?
“Never”
Nearly One-Quarter of All Employees Experience Some Degree of Pressure
Do You Experience Pressure to Compromise the Code, the Law, or
Company Policy?
35% 65% Do You Experience Pressure to
Compromise the Code, the Law, or Policy?
What Type of Pressure Do You Feel?
Moderate, Strong orDeclined to Answer
“Weak”
Percentage of Respondents Experiencing Some Degree of Pressure
33%
27%
25%
22%
19%
9%
9%
8%
5%
Middle management
My immediate manager
Senior leadership
Co-workers
Customers
Business partners
Subordinates
Suppliers
Other (Please specify):
Percentage of Respondents Who Experience Some Degree of Pressure
Nearly a quarter of employees indicate feeling some level of pressure to compromise policy, the
Code, or law to achieve business goals.
Those in positions of authority are the top three most commonly cited sources of this pressure.
Positions of Authority Remain the Most Common Sources of Such Pressure
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Pressure and Org Justice Pillars Show the Most Variability Between Companies
Pressure Pillar 42 point spread between highest and lowest scoring companies with a standard deviation of 10.6
Organizational Justice 35 point spread between highest and lowest scoring companies with a standard deviation of 8.5
While other Pillars demonstrate an average spread of 18 points between the highest and lowest performer…
If left unchecked, a sense of unequal treatment and underlying tone of getting the job done “at any cost” can erode an otherwise healthy organizational ethical culture
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Retaliation Against Whistleblowers
Source: National Business Ethics Survey | Retaliation: When Whistleblowers Become Victims
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Retaliation Significantly Decreases Employee Engagement
Source: National Business Ethics Survey | Retaliation: When Whistleblowers Become Victims
The Power ofDemographic Analysis
Why Drill Down?
Common Demographic Qualifiers
Benchmark & Determine How to Implement
• Location (region, country, state/province, city, plant)
• Job level
• Unit, Plant or Division
• Tenure
• Bargaining vs. Non-Bargaining
• Age or Generation
• Gender
Job Level, Geographic, Tenure and Age/Generation
lend well to comparative analysis
Implementation Considerations:
To embed or not to embed?
8985
78 78 78
5 years or less 6-10 years 11-20 years 21-30 years 30+ years
Years Employed at the Company
n = 1,365
Percentage of Respondents Who Responded Strongly Agree or Agree on Whether They Would Be Willing to Report Misconduct if Observed
How Employment Classification andTenure Can Impact Results
I believe disciplinary actions are taken when individuals engage in unethical behavior or misconduct at the Company.
If I raise a concern about unethical behavior or misconduct, I believe the Company will fully investigate it. Results by Tenure.
Implementation ConsiderationsThe “How” of Measuring Ethical Culture
Sample vs. Population How culturally and geographically diverse is your population? Access to technology?
Internal Communication Resources
Success is contingent on a coherent and well-coordinated internal communication strategy
Change Management/Preparing Leadership Prepare for acting on results
Structure vis-à-vis Other Efforts Input from 28 languages; nearly 40 percent outside U.S.
Measurement Timing Conflicting with other measurement efforts? Skewed results from regional holidays/events? Periodic vs. pulse?
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Empowering You to Make Meaningful Efficient Changes
Thank YouContact Us
Erica Salmon [email protected]
(720) 251-0891
Douglas [email protected]
(480) 397-2665