Corporate trust is gone, but can it come back?

Todays focus is based on a study that reveals employees thoughts and views about corporate business ethics in the early 21st century. The articles author Russ Warner made a very clever reference to a 2008 movie called The Dark Knight, he believed that the Joker made a very thoughtful observation when he said “You see, their morals, their code, it’s a bad joke. Dropped at the first sign of trouble.” (Warner).

A recent published research survey provided the short article an inside look into corporate fraud and misconduct that was derived from the experiences and perceptions of more than 3,500 employees in the United States.  The articles jumps right into a most recent study by KPMG forensic which released an integrity survey revealing around “73 percent of employees have personally observed or have personal knowledge of misdeeds in their organizations over the past 12 months, while 56 percent said that the actions observed could potentially create a serious loss of public trust.” (KPMG) The industries with the highest “performance ” were the automobile industry, government, and the banking and finance industry.

Employee Confessions

The following highlights some of the challenges voiced by employees:

  • 64% of employees feel pressure to take whatever action needed to achieve business targets
  • 59% believe that results are rewarded in spite of the means needed to achieve them
  • 57% say they lack resources to accomplish their job without cutting corners
  • 59% say they fear losing their jobs if they do not meet their targets

It was stated in the research conclusions that upper management contributes significantly to the problem and “One of the most common drivers of misconduct continues to be attributed to pressure to do “whatever it takes” to meet business goals.” (KPMG). Other cited causes included the belief that employees are not taking the organization’s code of conduct seriously, having in place systems that rewarded results over means, and the fear of job loss if targets are not met. Therefore the Pressures, incentives, inadequate resources, and job uncertainty are all major drivers of fraud and misconduct.

A positive takeaway from the study is that ethics programs and compliance programs have a favorable impact on employee perceptions and behaviors.”The propensity to report misconduct to a supervisor remains high at 78 percent and has increased to 53 percent for reporting to an ethics hotline, up from 44 percent in 2009″ (KPMG). If employers emphasize strong ethics, then overall employee integrity rises. If employers pressure their employees for results at any cost, then integrity decreases, Therefore, Executive management must make good choices and put them into action if employees are going to be enabled and motivated to do what’s right.

If you are interested in a similar article based on ethics and public opinion around the social media please click the study link. The study found nearly all responding to a survey of PR practitioners agreed that the instantaneous nature of social media and blogs “forced organizations to respond more quickly to criticism.” Also a great article from the Harvard business law in 2010 about how businesses are misleading consumers about the “green” products. “Sins of Greenwashing”

What can corporations do to gain public trust back?  

Reference: http://www.huffingtonpost.com/russ-warner/the-do-whatever-it-takes-_b_7821322.html

http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/Integrity-Survey-2013-O-201307.pdf

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