Ethical Challenges in the Workplace
A recent survey on global business ethics was conducted by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA). There were approximately 2,000 respondents from close to eighty countries. The survey ‒ Managing Responsible Business: A Global Survey on Business Ethics -- explored some key ethical questions by focusing on four business challenges:
Ethical culture - The moral nature of an organization and the framework and architecture to support it, including formal roles and responsibilities, codes of conduct, and other policies.
Accounting for ethics - The range and types of information collected and analyzed and how such information is reviewed and used.
Ethical dilemmas and pressures - The types of threats that employees and management accountants, in particular, face.
Business issues - Core areas of ethical concerns for business and how they're prioritized.
The key findings include the following:
Companies are recognizing the importance of establishing an ethical culture against a backdrop of a more competitive business environment.
- 80 percent of survey respondents reported that their organization has a code of ethics or a similar document to guide staff about ethical standards in their work.
- 57 percent provide training on ethical standards at work.
- 25 percent offer incentives for staff to uphold the organization's standards of ethical conduct.
- 60 percent said their board of directors has formal responsibility for ethics; 49 percent said it's the responsibility of the CEO.
The survey revealed both good and bad news when it comes to the collection and reporting of ethical information. While more firms are gathering information, it's still only a minority, which indicates there's a gap between what firms say and what they do.
- 36 percent of organizations collect ethical information, and 40 percent report ethical information.
- 61 percent feel it's important to collect and analyze ethical information, but only one in five believes their organization will do so in the near future.
- 62 percent collect ethical performance information as part of the organization's regular management information gathering processes; 45 percent collect information in separate focused exercises, such as staff surveys.
The survey shows that although the majority of respondents see their organizations as ethical, they're experiencing greater pressure to act unethically.
- 35 percent said they feel under pressure to compromise their organization's standards of ethical conduct. This has increased since a previous survey done in 2008, when 28 percent felt under pressure.
- 23 percent have personally observed conduct that has violated organizational ethics standards and/or policy in the last twelve months. Of those respondents, a majority (69 percent) reported it, despite 26 percent feared that they could be regarded as troublemakers. Of the 69 percent, only half felt satisfied about the way their ethical concern was handled.
- 22 percent said they perceive the most pressure to compromise ethical standards of conduct comes from "working with colleagues from different functional areas within the organization."
There's a wide range of ethical business issues that can impact business success, and some have a greater impact in particular sectors and regions. Security of information, bribery and corruption, conflict of interest, and environmental impact are issues management accountants are likely to encounter.
- When asked what ethical issues are relevant to their organization, 91 percent cited security of information, 78 percent said bribery, 74 percent reported conflict of interest, and 73 percent said environmental impact.
- 86 percent said they contribute to managing the ethical performance of their organization by "upholding their professional code," 83 percent said "ensuring the integrity of management information," and 80 percent said "leading by example."
I have previously blogged about ways to establish an ethical organization culture. Some of my suggestions were not directly addressed by the survey. In some respects the survey information over-simplifies how to create an ethical culture in an organization. Written policies, codes of conduct, and other externally-oriented tools have less to do with establishing an ethical culture than creating trust in senior management. Senior management may have a code of ethics, ethics training, an ethics officer, ethics hot line, and all the other tools that, on the surface, make it seem ethics is a valued commodity. However, they may not “walk the talk” of ethics and since employees may not be listening, the trust essential to establish an ethical culture may not occur.
Blog posted by Steven Mintz, aka Ethics Sage, on July 2, 2012