Ethics Bubble?

Image by ecstaticist via Flickr

Just spent some time reviewing the Ethics Resource Center's 2009 National Business Ethics Survey . There's some very interesting data in the report - some of which seems contradictory, which means I'm going to be spending more time this weekend digging into the details.

On the positive side, the survey revealed that:

• Misconduct at work is down
• Reporting of observed misconduct is up
• Ethical cultures are stronger, and
• Pressure to cut corners is lower.

But before we start congratulating ourselves too much, however, there were some cautionary data as well. For instance, 30% of people who observed behavior that constituted a "red flag" (activities that may be indicative of material fraud or questionable actions taking place) said they did NOT report it. You can't take appropriate action to mitigate potential misconduct if you aren't aware of it!

Furthermore, there is an interesting analysis of results from past Business Surveys that may suggest we are in an "ethical bubble."


If you look at the chart, you'll see that in the last economic downturn, reported misconduct also decreased, but as the economy improved, misconduct rose with it. While the sample may be a bit small, the parallels between the S&P Index and observed misconduct are fairly consistent. The ERC surmises this may be because in hard times management may talk (and inspect) more on the importance of high standards. Thus, misconduct goes down.

This really has me thinking...On one hand, I know that most of our clients are putting their money where their mouth is - allocating resources to ethics and compliance programs and making a true commitment to fostering an ethical culture. I don't see this changing as we exit the down turn. But the chart is revealing. Curious as to your thoughts - are we really in a bubble? Is this latest good news fleeting?

I'll leave you with the advice the ERC has for Ethics and Compliance Professionals:
Focus on culture and collect data! Now is the time to assess your culture and put in place processes - especially regarding the collection of potential violations of your stated code of conduct - for how you manage issues and events that expose your organization to risk.