Wednesday, January 11, 2012

It's that Ethics Thing...Again

Posted by Harry Hertz, the Baldrige Cheermudgeon

I know I frequently write and talk about business (and other) ethics. It's because I think they are so important to reputation (customer loyalty) and to a productive economy. And ethical practices have a significant return on investment, social and financial. So why do I begin a new year with my first post being on this topic? Because the seventh biannual National Business Ethics Survey has just been released by the Ethics Resource Center. And there are some pieces of good news and some really troubling signs.
First the good news, the percentage of employees witnessing misconduct dropped to an all-time low of 45%, down from a high of 55% in 2007. And those who reported the misconduct they witnessed reached an all-time high of 63%, up from a low of 53% in 2005.
The bad news: retaliation against whistle-blowers rose significantly. 22% of employees who reported misconduct say they experienced some form of retaliation. That is up from 15% in 2009. And the percentage of employees who said they experienced pressure to compromise standards was at 13%, compared to 8% in 2009.
Senior leaders and managers set the tone by the ethics they demonstrate. And here the data were the most troubling to me. Confidence in the ethics of senior leaders dropped to 62%, down from 68% in 2009 and matching the all-time low in 2000. And 34% of employees said their direct supervisors do not disply ethical behavior, up from 24% in 2009.
Baldrige Award recipients have long been role models for ethical conduct. We have been writing about the importance of ethics for more than eleven years. And societal responsibility has been a Baldrige core value since the early days of the Baldrige Program. The Baldrige Criteria for Performance Excellence devote one out of 17 items totally to governance, legal and ethical behavior, and societal responsibilities. And a second item is totally devoted to leadership, governance, and societal responsibility results. I encourage you as you start the new year to look at all the Baldrige Criteria, but how about starting with an ethics refresher by looking at Items 1.2 and 7.4, the two items I referenced above.

I wish everyone a good and ethical new year!

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