THE SAFE & OPEN CULTURE ISSUE - INSIGHTS FROM THE 2023 ETHICAL CULTURE REPORT FEATURING EATON, LRN, THE MEKONG GROUP, & MORE - Ethisphere Magazine
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THE SAFE & OPEN CULTURE ISSUE
INSIGHTS FROM THE 2023 ETHICAL CULTURE REPORT
FEATURING EATON, LRN, THE MEKONG GROUP, & MORE
WINTER 2023
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CODE: MAGAZINE2023
Table of Contents
03 MASTHEAD
05 DISPATCHES FROM THE ETHICS ECONOMY
06 IN THE NEWS
08 BELA OF THE BALL
12 SPECIAL SECTION:
THE 2023 ETHICAL CULTURE REPORT
14 WHY THIS & WHY NOW
16 DIVING INTO THE DATA
20 TRANSPARENCY & TRUST
P.30
23 10 TAKEAWAYS
26 GET READY FOR THE GLOBAL ETHICS SUMMIT!
30 HOW LEADERS AT EATON OWN ETHICS
34 BUILDING A BETTER TRAINING PROGRAM
38 BREAKING THE CHAINS OF MODERN SLAVERY
42 ANTITRUST ENFORCERS CONTINUE TO
TARGET LABOR MARKET PRACTICES
P.34 45 THE CASE FOR REMOVING SCOPE 3 EMISSIONS
47 BY THE NUMBERS
48 THE FINAL WORD
P.38
P.45
ETHISPHERE.COM 1
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defining core ethics standards using data-driven insights that help companies enhance corporate character.
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Dispatches from the Ethics Economy
Ethical Culture
Matters More Than Ever
engaged and committed. Turnover tends In this report, we cover three trends from
to be lower and productivity higher, and our global dataset, which has grown
when you do need to hire, it’s easier to over 2 million employee responses.
to attract high-quality employees. With a “N” that large, we are able to
do multiple demographic data cuts,
Employees at organizations with strong including a pre-pandemic and pandemic
ethical cultures feel less pressure to era analysis, a generational analysis
compromise company standards to and an update on the importance of
achieve business goals. And if they do managers. Why managers? Our data
observe misconduct, they are more likely shows that 62 percent of employees
to feel comfortable reporting it, allowing who made a report say they took
an organization to address issues early, their concern to their manager. These
saving time (from the distraction of a front-line employees are critical to
substantial issue) and money (in the form ensuring that an ethical culture is
of legal fees, fines, and penalties). An embedded across an organization and
ethical culture can be self-perpetuating, that reports are effectively addressed.
with effects far beyond employees’
individual conduct and perceptions. At Ethisphere, sharing our data and
expertise–so that all can learn and
by Erica Salmon Byrne But what is culture? We all have a improve–is central to our mission.
vague sense of what it is and what it I hope that this report gives you
.
looks like at our organizations, but it can insights you can immediately put to
Before the pandemic, the world be hard to define. Merriam Webster’s use inside your organization so that
was tuning in to the benefits of an definition tells us that culture is the “set your ethical culture can thrive.
ethical culture. Investors were writing of enduring and underlying assumptions
to CEOs and pledging to question and norms that determine how things
board members, and regulators are actually done in the organization.”
around the globe were calling on
organizations to examine their culture. In other words, what levers are being
Employees were asking about culture pushed or pulled to accomplish the
in the interview process. Following goals of the organization? The factors ERICA SALMON BYRNE
the COVID-19 pandemic those that comprise culture can have a CEO, Ethisphere
trends have grown even stronger. fundamental, long-lasting effect on
a company’s success. But how can
The focus makes sense – after all, the an organization best get a handle
advantages of a strong ethical culture on its culture? By measuring it.
are manifold. Studies have repeatedly
shown that businesses with strong That is what we set out to examine with
ethical cultures outperform those the release of our 2023 Ethical Culture
without. There are a variety of reasons Report, which you can download
underlying that performance data. at www.ethisphere.com/2023-
Companies with stronger cultures culture-report/, and which we will be
tend to have employees who are more discussing in depth later this issue.
ETHISPHERE.COM 5
IN THE NEWS
In the News
ACC and General Counsel Oath Survey
GC Report Mixed Progress Promoting DEI Practices
GC in larger organizations report opposed to being able to “The impetus for launching this global
stronger progress and the majority of influence change across survey was my desire to understand
·
GC report they do not request their their wider organizations. whether GC were making progress
law firms to track KPIs, but those GC are experiencing with their team and organizational
that do rated significantly higher only moderate support commitments around DEI,” said Simon
progress in achieving DEI objectives. and success promoting Zinger, GC of Entain plc, a FTSE-listed
DEI progress in overall company. “Although many GC have
·
On January 11, the Association of organizations. identified with the General Counsel Oath,
Corporate Counsel (ACC), in partnership While the majority of GC it felt important to ask GC around the
with the General Counsel Oath initiative, currently do not request their world about their perceived levels of
released the General Counsel Diversity, law firms track advanced actual progress and to consider whether
Equity, & Inclusion (DEI) Survey, which DEI KPIs, those that do more could be done. This survey
outlines the impact and sentiment observe significant headway suggests areas where there is still work
·
of general counsel (GC) and chief in achieving DEI progress. to do and encourages GC to continue
legal officers (CLOs) around DEI. While the strongest level of playing leadership roles in progressing
participation came from GC DEI inside their organizations.”
ACC is a global legal association that based in the United States, the
promotes the common professional responses show a high degree The GC DEI Survey was completed
and business interests of in-house of global input, suggesting by 232 respondents spanning 28
counsel who work for corporations, DEI topics remain top of mind countries around the world.
associations and other organizations. in many parts of the world.
Organizations interested in benchmarking
Building on the ideals and values found “It is encouraging to see that general their DEI programs are encouraged
in the General Counsel Oath (introduced counsel and chief legal officers are to complete the ACC Foundation DEI
by Simon Zinger in 2020 and endorsed generally finding success in promoting Maturity Assessment, powered by
by many leading global CLOs and DEI practices within their own Ethisphere. This innovative resource
legal organizations including ACC), this departments,” says ACC President and offers the methodology to evaluate
survey aims to provide an overview of CEO, Veta T. Richardson. “Despite the DEI progress along a continuum of
how GC/CLOs around the world view clear benefits and increased focus on early to more advanced stage efforts
DEI in the context of individual progress DEI in recent years, that success doesn’t using the framework of the acclaimed
impacting DEI within their legal team, seem to be translating to organizations ACC Foundation DEI Maturity Model
wider organizational progress, and as a whole. While resources and to complete an online assessment
progress made by law firms they work bandwidth may differ, consistent and module, which allows organizations
with on cultivating diverse teams. vocal leadership is critical to help move to quickly and easily benchmark their
DEI practices forward regardless of DEI efforts to those of their peers and
A few of the survey’s key results include: an organization’s size or geography. receive back a written self-assessment
·
ACC values the opportunity to work generated by the module for the
GC are having greater success with Simon Zinger to take the pulse organization’s internal review. This tool
.
promoting DEI practices of chief legal officers globally on such is offered as a free service by ACC
among their own teams, as an increasingly important topic and and Ethisphere for use by the entire
we appreciate his work to highlight legal and business communities.
these issues on an international scale
in the legal community and beyond.”
6 ETHISPHERE.COM
IN THE NEWS
MEANWHILE…
News coverage around the 2023 Ethical and Environment. The Workers category The American Red Cross releases its
Culture Report continues to roll in, with is weighted twice as heavily as any first ESG Report, making it one of the
stories from Amber Burton from Fortune, other category. Bank of America, first humanitarian nonprofits to publish
and Matt Kelly from Radical Compliance. NVIDIA, Microsoft, and Accenture had a complete ESG Report. The Red Cross
Be sure to check out our special section the list’s top scores, while Wells Fargo, started its ESG program in 2021.
on this report, and additional commentary Meta, PG&E and Boeing were called
around it, beginning on page 12. out for their especially low scores. Climeworks, a Swiss company
specializing in carbon dioxide capture,
JUST Capital and CNBC release the 2023 Baker McKenzie releases its Year Ahead announced it has successfully removed
JUST 100 List, which ranks the largest Global Disputes Forecast 2023, which carbon dioxide from the air and put
public U.S. companies according to how focuses on legal dispute trends in areas it underground—a major advance for
well they serve five key stakeholder such as cybersecurity, ESG, post-M&A, companies seeking carbon neutrality
groups: Workers, Communities, taxes, and employment, as well as by and carbon net zero status.
Customers, Shareholders & Governance, industry and by geographic region.
HOT WATER
The dramatic collapse of cryptocurrency $50M in program investments—for Four people, including European
exchange FTX last November failing to build and maintain adequate Parliament VP Eva Kaili, are charged in
continues to create regulatory and know-your-customer and anti-money an ongoing corruption scandal in which
legal shockwaves as ex-CEO Sam laundering practices. NYDFS also Qatar allegedly used money and gifts to
Bankman-Fried faces multiple charges issues new guidance to crack down illicitly secure favorable economic and
in the U.S. for his role in the bankruptcy on the kind of commingled crypto political treatment from the European
as the U.S. federal government seizes funds that led directly led to FTX’s Parliament. The scandal erupted on
more than $600 million in assets from collapse. Congress begin to lay the heels of the FIFA 2023 World Cup,
Bankman-Fried. As other crypto lending bipartisan groundwork for federal crypto a sporting event hosted by Qatar and
operations, such as BlockFi and Genesis regulation while EU lawmakers prepare shadowed by deep ethical concerns.
Global Capital, go under in a related to vote on tighter crypto regulations.
string of crypto bankruptcies that wipes Epic Games, publisher of videogame
more than $1.7 trillion in token value A New York jury finds the Trump Fortnite, ordered to pay $520M in fines
off the books, regulators take notice. Organization guilty on all 17 charges in a for failure to protect children’s data
wide-ranging, 15-year tax fraud scheme. privacy. Meanwhile the California Privacy
Crytptocurrency exchange Coinbase The Trump Organization is later ordered Rights Act is likely to become one of
reaches a $100 million settlement with to pay a $1.6 million fine for the fraud, the the big compliance issues of 2023.
the New York State Department of maximum penalties allowed by the law.
Financial Services—$50M in fines and
OF INTEREST
Stanford President and neuroscientist Meanwhile, Twitter disbands its Trust search tool, we can expect significant AI
Marc Tessier-Lavigne is under and Safety Council, which advised the Ethics regulation some time this year.
investigation for possible research social media company on issues such
misconduct amid concerns of as online safety, human and digital According to a recent Gallup poll, 79%
widespread ethical misconduct within rights, suicide prevention, child sexual of U.S. adults think nurses practice high
higher education, where fear of failure exploitation and dehumanization. The ethical standards. Less than 10% give
erodes good decision-making. move occurred shortly after members high ethical marks to Congressional
of the Council resigned in protest. representatives and telemarketers.
.
EU warns that Twitter has “huge work That only 23% of adults think journalists
ahead” to comply with its upcoming As OpenAI’s AI chatbot ChatGPT passes are ethical is an impenetrable mystery
Digital Services Act amid fears that the Wharton Business School MBA unworthy of further examination.
the site’s chaotic operations will help exam, and Google plans to roll out an AI
worsen global political violence.
ETHISPHERE.COM 7
BELA OF THE BALL
BELA of the Ball
On-Demand Events
As we charge into 2023, the BELA events calendar will regularly showcase a wide range of webinars, roundtables, and virtual and
hybrid forums covering a host of topics aimed at improving your experience as an ethics and compliance professional. Below are some
of our recent events that are on-demand. Be sure to check the Ethisphere Events page to reserve your spot for upcoming events!
Ethical Culture Data Findings: Pandemic Lessons and a Path Forward
Allen, Editor-in-Chief of Ethisphere
Magazine, Bill Coffin, and Client
· Data to inform plans and
priorities: Discover top
Success Manager, Cassidy Davis as areas where you can make
they discuss interesting insights from a difference in improving
Ethisphere’s latest data set, including: your ethical culture and hear
·
examples of how leading
The state of ethical culture organizations are advancing
in 2023: Learn where leading programs and practices.
organizations improved –
and slipped back – during This data features the views of more
the pandemic, across than 2 million employee respondents
Looking to improve your organization’s Ethisphere’s Eight Pillars from around the world and has
ethical culture in 2023? Learn from of an Ethical Culture. been covered by Fast Company,
·
Ethisphere experts as they discuss Fortune, and others, so see what the
the latest findings featured in The The kids are not alright: buzz is about! Watch Now >>
2023 Ethical Culture Report: Hear about the rise in
Accountability Reigns, GenZ bullying, challenges for
Refrains. Join Ethisphere’s Vice Gen Z, and differences in
President of Data Strategy, Douglas reporting across generations.
Ethical Leadership Masterclass
Business Ethics, for an in-depth
· Hearing from a leading
·
discussion on ethical leadership and expert in behavioral ethics
how leading organizations recruit, Identifying the 3 key traits
·
develop, and promote ethical leaders of an ethical leader
from within. In this masterclass Promoting ethical leadership
session, you will learn about: in your organization
In this masterclass, Ethisphere’s
· Defining ethical
leadership and why it is
In addition, data from Ethisphere’s
ethical culture survey will be shared
Erica Salmon Byrne and Brian critically important to an to show the impact of ethical
·
Beeghly will be joined by Dr. Linda organization’s success leadership on employee perceptions
K. Treviño, Distinguished Professor Understanding the of ethical culture, including an
of Organizational Behavior and importance of ethical organization’s speak-up culture and
Ethics at The Pennsylvania State leadership for an fear of retaliation. Watch Now >>
University and co-author of Managing ethical culture
8 ETHISPHERE.COMBELA OF THE BALL
2022 Asia Pacific Ethics & Compliance Virtual Forum
conversations to advance your
ethics and compliance framework
· Taking a Hands-On Approach
to Maximizing Third-Party
with proactive approaches to Integrity Watch Now >>
·
addressing ethical culture, training and
awareness, geopolitical influences, How ESG Can Address the
cybersecurity, the changing role of the Biggest Global Challenges
compliance officer, and much more. & Promote Value Creation
·
Check out our on-demand sessions Watch Now >>
·
from the event that gathered the Emerging Markets: Creating
BELA Asia Pacific community and its a People-Centric Culture of New & Emerging
dedicated Forum Working Committee Integrity Watch Now >> Expectations for Compliance
of leaders as they engage in practical Officers Watch Now >>
Europe Ethics and Compliance Virtual Forum
· Growth Rooted in Values:
How to Cultivate Your
· Keeping Up with the Pace
of Change: Managing
Business Through Ethics Compliance Programs
& Sustainable Means Amidst Evolving Business
Watch Now >> Challenges Watch Now >>
· ESG and Its Impact on
Ethics & Compliance
· Understanding the Health
of Your Ethics & Compliance
In this two-day virtual event, ethics and Programs Watch Now >> Program: What to Measure
·
compliance leaders from across Europe and Why Watch Now >>
·
came together to address the issues Engaging and Effective
impacting corporate integrity today, Training & Communications Coordinating Compliance
which you can now watch on-demand: Approaches for Virtual Sanctions Management
Work Environments Across a Global Organization
Watch Now >> Watch Now >>
Measuring Ethical Culture: Data Sources & Planning Remediation
organization? And what should you
do with that information once you
· How to translate data into
action plans for remediation
have it? In this webinar, we’ll cover: across your business
· Various sources of
ethical culture data you
Join Ethisphere experts Tyler
Lawrence and Emme Devonish,
·
could be tapping into along with Carlos Zamudio, Business
Various partners within Integrity Manager, Diageo (Southern
the organization you Europe) as they discuss this topic as
·
might leverage part of measuring and maintaining
Ethics and compliance functions What a dedicated a Safe and Open Culture, with
have evolved from “check the box” ethical culture survey resources from Ethisphere and
·
exercises towards a more complex can accomplish benchmarking data available from
mission, attempting to create a How to translate disparate The Sphere. Watch Now >>
safe and open corporate culture culture data into a clear,
that enables employees to speak cohesive picture of
up. But how should you think your organization
about measuring culture at your
ETHISPHERE.COM 9BELA OF THE BALL
BELA of the Ball
New Community Resources
BELA members receive enterprise-wide access to the BELA Member Hub—a premier repository of key resources
featuring examples of work, presentations, and research provided by BELA companies, exclusive data from Ethisphere’s
unparalleled data set, program benchmarking, and expert reports, event sessions and other insights.
Be sure to check on the resource hub regularly to see the latest content that addresses some of the most important issues facing the
ethics and compliance field today. And if you are interested in showcasing your organization and sharing a resource with the BELA
Community, reach out to Ethisphere Content Manager, Samantha Johnson (samantha.johnson@ethisphere.com) to learn more.
Improving Compliance Program Performance & Effectiveness Through Cross-Functional Collaboration
Roundtable and shares examples of influence key stakeholders; improve
ways that compliance can partner with their knowledge and understanding
other functions in your organization, of business, operations, and strategy;
including M&A/Business Development, design tailored compliance programs,
Human Resources, Information policies, and controls; and more.
Technology, Internal Audit, and
Procurement/Supply Chain. Within Download this presentation from the
are slides that provide examples BELA Member Hub. Need access?
This presentation from ADM stems of ways compliance professionals Email bela@ethisphere.com.
from a recent BELA Virtual can strengthen relationships and
stc—Communicating Ethics & Compliance to Employees
telecommunications company stc to Empowering Employees
share an overview of the considerations Through Integrity Training, and
made while communicating ethics and Code of Ethics: The Foundation
compliance with employees. It includes for a Culture of Integrity).
identifying stakeholders, messaging
outcomes, utilizing communications Download this presentation from the
channels, and more. It is part of a BELA Member Hub. Need access?
series of presentations that also Email bela@ethisphere.com.
This presentation was shared by the includes Middle Management as
ethics and compliance team of Saudi an Enabler of Integrity Culture,
Ethics Everywhere Annual Report
This report from JLL shares the Download this report from the
heart of their culture and business. BELA Member Hub. Need access?
Including, why they report on their Email bela@ethisphere.com.
ethics program, key focus areas of
risk, addressing and assessing risk,
investigation process roadmap, 2021
highlights and recognition, monitoring
ethics, and investigation data.
10 ETHISPHERE.COMBELA OF THE BALL
The Power of Storytelling in Building an Ethical Culture
Storytelling can be an impactful tool to your culture. Inside is advice on taking
help instruct and engage employees on inspiration from real incidents, how to
the topic of ethics, and to help build an show a variety of outcomes, and real
organization’s ethical culture. Humans company examples of storytelling.
are hard wired to learn through stories.
In this resource, learn how to utilize Download this guideline example
storytelling in your communications from the BELA Member Hub. Need
with your organization, and enhance access? Email bela@ethisphere.com.
Code of Ethics
Genetica Credicorp has shared their its customers, fellow employees,
Code of Ethics in both English and suppliers, stakeholders, and the
Spanish. The comprehensive code communities in which they operate.
includes guidance on their purpose,
role, vision, and values, which all inform Download this policy example from
how the company behaves regarding the BELA Member Hub. Need
access? Email bela@ethisphere.com.
Essential Elements for Creating a Compliance Training Plan
There is no one-size-fits-all when plan, including: purpose, training
it comes to creating a training plan goals, resources needed, new and
and schedule. It will define goals emerging training needs, role- and
and objectives, the resources and event-specific training, and more.
staffing required to carry out the plan,
what training is needed immediately, Download this guideline example
mandatory training, training specific to from the BELA Member Hub. Need
different roles at the organization, and access? Email bela@ethisphere.com.
how to review and revise the training
plan. This guide covers the essential
elements that make up a training
Best Practices in Investigations Staffing, Structure, and Process in a Post-COVID World
This report, created in partnership function, collecting information
between Ethisphere and Baker that may trigger an investigation,
McKenzie, shares data from a root cause analysis, and more.
survey of BELA members on
investigations staffing, structure, and Download this guideline example
process, along with commentary from the BELA Member Hub. Need
on topics such as the structure and access? Email bela@ethisphere.com.
ownership of the investigations
ETHISPHERE.COM 11SPECIAL SECTION
The 2023 Ethical Culture Report
Accountability Reigns and Gen Z Refrains
Download Report Now
12 ETHISPHERE.COMTHE 2023 ETHISPHERE ETHICAL CULTURE REPORT
On January 12, Ethisphere published the latest volume of its ongoing series of Ethical Culture
reports, which derive their insights from Ethisphere’s proprietary Ethical Culture Quotient (CQ) data
set. The CQ studies the elements of ethical culture, such as whether employees will report any
ethical wrongdoings within their organization.
Data for this report was collected from
an Ethisphere survey of over two million Claims of bullying increased This underscores the importance
global employees from Ethisphere’s significantly. In stark contrast to of businesses preparing their
client base. The 54-question survey the other 26 types of reported managers to facilitate discussions
focused on reporting behavior and how misconduct, Ethisphere’s report around raising concerns and
the behavior reflected certain realities found that bullying jumped a proactively set corporate-wide
around organizational speak-up culture. shocking 13 percent during the past expectations around what reporting,
As Ethisphere’s data team analyzed the few years. The report highlights investigations, and actions will entail.
survey data, they paid particular attention several possible explanations
to how results differed between early for this significant increase,
2020, when COVID-19 was officially including the increasing presence Culture has become a topic of critical
designated as a pandemic by the World of Gen Z employees, who as an importance to every corporate
Health Organization, and now, when age cohort report high levels of stakeholder, from employees and
the pandemic may not be over, but workplace bullying, as well as consumers to investors and regulators.
businesses have had a chance to adapt high levels of bullying in general. In the pages that follow, three of
to a new kind of normal and evaluate This increase also correlates with our top experts on culture will each
how their cultures have fared over a an increase in bullying during the provide their insights to a specific
few years of acute global turmoil. pandemic, especially as people aspect of the report and how ethics and
spent more time on-screen. compliance officers can build a winning
The report’s key findings each present strategy for engaging their employees
a unique opportunity for organizations meaningfully, building a sense of trust,
to advance ethical cultures within and creating an environment where
their own organizations, especially by Gen Z employees are least likely everyone, regardless of their professional
.
paying close attention to the needs to report misconduct. While Gen status, feels equally invested in and
of their youngest employees. Z represents a smaller portion of protected by their organization’s
the data set from this research, it commitment to business integrity.
is interesting to note they are the
Ethical culture within businesses least likely age group to report The 2023 Ethical Culture Report—
increased across the board. bad behavior. When compared Lessons from the Pandemic:
Based on Ethisphere’s Eight Pillars to their Millennial, Gen X, and Accountability Reigns and Gen Z
of an Ethical Culture, respondents Boomer colleagues, 56 percent Refrains can be downloaded here.
showed more favorable perceptions of Gen Z employees stated that
of their company’s ethical culture they did not report misconduct
during the pandemic. Like all when they saw it because they
businesses, respondents faced didn’t believe corrective action
greater turmoil during the last few would be taken, followed by 47
years. But even amid such trying percent who feared retaliation.
conditions, the culture of ethics
they had in place before COVID-19
grew even stronger—helping to
reduce risk, retain talent, and build Managers matter. More than half
value within their organizations. of respondents (56 percent) named
However, during the pandemic, their immediate manager as the
although people said they were avenue by which they reported
more willing to report misconduct misconduct, which aligns with
and observed more of it, they prior Ethisphere cultural reports
actually tended to report it less. for being the most common
method of reporting misconduct.
ETHISPHERE.COM 13THE 2023 ETHISPHERE ETHICAL CULTURE REPORT
Why This & Why Now
with Erica Salmon Byrne
Ethisphere CEO Erica Salmon
Byrne provides her insights
into the 2023 Ethical Culture
Report, which contains the
latest data on the forces
driving ethical culture within
organizations, comparisons
on key ethical culture metrics
pre- and post-pandemic
introduction, and how this
report’s particular timing
and focus on Generation
Z proves that ethics
“matters more than ever.” ERICA SALMON BYRNE
In January, Ethisphere published the ethos of the business. So much has able to look at our survey results
2023 Ethical Culture Report—Lessons been written about what the pandemic by generation, and that produced
from the Pandemic: Accountability is going to do to the future of work, what some really interesting results.
Reigns and Gen Z Refrains. It is a deep the next wave of work looks like, and
dive into our culture survey database of what we have learned over the course Looking at ethical culture data from a
more than two million responses, which of the pandemic. And so, given the generational standpoint was a really
provides a level of insight into corporate size of our dataset, we thought it was interesting way to approach it. What it
culture that is second to none. This a natural opportunity to cut the data told us was something that that we have
year’s report answers some important to see what happened before March been talking about for a while now, that
questions: how has corporate culture 2020 and what has happened since. the manager continues to be a really
fared over the course of the pandemic, important part of advancing ethical
and how has that experience produced We also wanted to think about what culture. That is especially true in the way
different results for different age groups? lessons the data tells us about what that we prepare our managers to lead,
managing the workforce of the future what we have expected of our managers
We feel a real obligation here at is going to look like. Because our over the course of the pandemic, and
Ethisphere to share our insights so that dataset is as big as it is, we were also the way people need to prepare to
all can learn. That’s part of the founding manage the generation of the future.
14 ETHISPHERE.COMTHE 2023 ETHISPHERE ETHICAL CULTURE REPORT
We said in the report that the kids are And if a company allows people to people know what’s expected of
not alright. There is a big cohort of the continue to work remotely, that is a them? Are they willing to raise their
youngest members of our workforce third set of expectations for managers. hand when they have a question?
that need more support from their And how do they feel about those
managers, and we’ve got to be prepared To that end, the 2023 Ethical Culture processes? Those are the fundamental
for that. We have to be prepared to lead Report thinks through all of those pieces questions that you ought to be able
with an open door, and for those new so that those who read it can ask of to answer about the organizational
voices in the workplace to challenge themselves what their internal data says ecosystem in which your people are
us. Members of Gen X, for example, compared to what Ethisphere’s data is operating. And if the answer to any one
had a very different attitude when it saying. It enables them to ask how they of those questions is something your
came to what they expected from can use this data to make things better organization does not know or have,
their managers when they came into for their workforce, and to give them then that is the cue to solve for that.
the workforce, than the people who the opportunity to tell their employers
are coming in now. So as compliance what they are thinking. The fundamental It is enormously expensive to replace
professionals, and as people who are message of this report: that all of this a mid mid level executive—I have read
interested in the topic of safe and open information is a gift. It is all something the costs can be as high as a million
speak up culture, we really need to you can accomplish great things with. dollars every time somebody turns over.
think through how to prep managers You just have to have the right attitude. And why do people leave jobs? More
for the kids that are coming out of often than not, they’re not leaving the
college. We’ve got to get ahead of that. CULTURE MATTERS MORE THAN EVER job. They’re leaving their manager. So
really, it all comes down to culture, that
WHY NOW? As we pulled this report together at this fundamental linchpin around which
particular moment in time, we looked at everything else spins. It is absolutely
The timing of this report is as important the generational data we gathered as a measurable, if you’ve got the appetite
as it is intentional. Since 2020, we have way to gain insight into the expectations to do it. And with the right data and the
done a lot of webcasting and visual of the workforce of the future. As we look right insight, you can build an ethical
data presentations about our ethical at some of the things that are happening culture that will make your organization
.
culture data and received encouraging out in the world, especially the economic more resilient, valuable, and sustainable.
feedback from the BELA (Business situation, the fact of the matter is Strong ethics is good business. And the
Ethics Leadership Alliance) community, that the average company today has latest culture data proves it, yet again.
as well as our various event attendees. somewhere between 70 and 80% of
its value tied up in intangible assets. The 2023 Ethical Culture Report—
Now, we wanted to give people Value isn’t stuff for most companies, it’s Lessons from the Pandemic:
something tangible that they could brand value. It’s goodwill. It’s reputation. Accountability Reigns and Gen Z
bring directly to their internal audiences. Its’ intellectual property. And most of Refrains can be downloaded here. This
We want ethics and compliance all, it’s people. And how do you hold content originally appeared in video
professionals to be able to walk into on to your best asset? Its culture. form as an episode of the Ethicast. To
their CEO’s office, or into their next watch that episode, please click here.
Board meeting, or into a meeting with That is the reason why we are seeing
their chief people officer and say: here’s investors care so much about this. It is
what the data is saying, and how much the reason why we are seeing future ABOUT THE EXPERT
of this are we seeing inside our own employees care so much about this.
datasets? Is our internal data saying And it is the reason why we are seeing Erica Salmon Byrne is the CEO for
something similar? Is our engagement regulators mention it as much as Ethisphere, where she has responsibility
survey data saying something similar they have been recently. There is an for the organization’s data and services
to what Ethisphere is saying? How are immense amount of focus from board business and works with Ethisphere’s
we measuring culture? And importantly, members, investors, regulators, and community of clients to assess ethics
what are we doing with those results? future employees on some really key and compliance programs and promote
questions: Are you nurturing the right best practices across industries.
All of those are real opportunities now, kind of culture? Are you supporting Erica also serves as the Chair of the
particularly as we think about what the the right kind of culture? Are you Business Ethics Leadership Alliance;
working environment of the future looks growing the right kind of culture? she works with the BELA community
like. If a business is going to be a hybrid to advance the dialogue around ethics
environment, that creates one set of It is incredible to me—just incredible— and governance and deliver practical
expectations for managers. If everybody how the business community has guidance to ethics and compliance
is coming back into the office, that coalesced around this question of practitioners around the globe.
creates a different set of expectations. culture. For a lot of people, that is
kind of amorphous. What is culture?
To me, it is easy to measure. Do your
ETHISPHERE.COM 15THE 2023 ETHISPHERE ETHICAL CULTURE REPORT
Diving Into the Data
with Doug Allen
Interview by Bill Coffin
Ethisphere Vice President of
Data Strategy Doug Allen
discusses the data behind
the key takeaways from the
2023 Ethical Culture Report,
which includes how bullying
claims skyrocketed over
the course of the pandemic,
how ethical culture trends
vary by age cohort, how
team reputation factors into
employees’ decisions to
DOUG ALLEN
report misconduct, and the
critical role that data and
I love to hear you talk about the engagement process that came about
measurement play in building size of the respondent pool we’re at the behest of the Business Ethics
talking about here that inform this Leadership Alliance community.
a thriving workplace culture. report. Exactly how big is the Sphere’s
culture dataset? And how does the We developed this survey methodology
Sphere get all that terrific data? in 2015, through conversations we had
with the BELA membership, which at
The data that underpins our 2023 the time was a fledgling community.
Insights report on culture comes from Now, it’s much larger, but back then,
our universe of more than two million BELA members came to us and said
individual employee data responses that that a pain point for them was that
we have collected since about 2016. nobody was measuring the ways in
These are data points from organizations which their compliance programs were
around the world, representing industries actually producing results. That’s when
of all shapes and sizes. The data itself Ethisphere stepped to the plate and
comes from a proprietary survey and came up with something that could
help ethics and compliance officers
measure the efficacy of their programs,
16 ETHISPHERE.COMTHE 2023 ETHISPHERE ETHICAL CULTURE REPORT
Table from The 2023 Ethical Culture Report—Lessons from the Pandemic: Accountability Reigns and Gen Z Refrains which can be
downloaded here.
what their employees are thinking various demographic dimensions as Now, before we get into the findings, a
about these programs, and what the well. We are hoping that this survey quick primer on what we’ve looked at
workforce’s overall take is on the culture will just be the first in a regular series as part of our process. The way we’ve
of ethics within their organization. of great insights that we can pull from approached measuring ethical culture
our data and share with our wonderful is defined by what we call our Eight
With the BELA community’s community on what we’re seeing Pillars of Ethical Culture. Many of our
collaboration and partnership, and with regarding compliance and ethics topics. audience members today, and devotees
our own internal experts, we developed of Ethisphere in general, know of these
what we call the Ethical Culture Solution A major aspect of this report is pillars. But for those who do not, the
Set. The survey is now in its eighth year, its focus on how ethical cultures Eight Pillars cover what we consider
and we have collected more than two in general fared over the course to be the foundational elements of
million responses from hundreds of of the pandemic. How did ethical an effective and sustainable culture.
organizations around the world. That cultures do when put to the test? For example, what is the awareness
unique breadth and depth is what we of the employees of the compliance
are bringing to bear in this report. We are looking at ethical culture pre- and ethics program? What are their
and post-pandemic—and we are calling perceptions on whether or not that
We have released previous versions our present moment “post-pandemic,” program is working? What is their overall
of the Ethical Culture Survey that have even though we fully realize that sense of willingness to speak up? Are
delved into other insights, but in the 2023 we are still in an ongoing COVID-19 they, in fact, speaking up? What are
version, things are a little different. Our situation. But when looking at our data, they seeing that falls within observed
audience today has been through some we were able to segment all of the and reported misconduct? To what
pretty tumultuous times of change. The results we collected prior to March extent are employees feeling pressure
COVID-19 pandemic is not yet over, but 2020 versus everything after that. Then to achieve their business goals at the
we felt that we are at a point now where we looked at trends in how employees expense of potentially compromising the
we could collect enough data at this are perceiving the culture of integrity policies of their code of conduct? We
point to really dig into trends that arose within their own organizations during review the law, we look at dimensions
during the pandemic, both from a time those two different time periods. of organizational justice, we look at
period perspective, but also involving perceptions of one’s immediate manager,
ETHISPHERE.COM 17Gen Z report misconduct less than any other age cohort, despite their
THE 2023 willingness
professed ETHISPHERE ETHICAL
to call out CULTURE REPORT
bad behavior.
WHEN YOU SAW MISCONDUCT, DID YOU REPORT IT?
DECLINED TO
AGE YES NO
ANSWER
GEN Z ( ≤ 25 ) 43.6 % 17.5 % 38.9 %
MILLENNIAL ( 26 - 41 ) 45.5 % 22.7 % 31.8 %
GEN X ( 42 - 57) 53.5 % 18.8 % 27.6 %
BOOMER ( 58- 77) 50.3 % 22.1 % 27.6 %
Table from Nearly
The 2023 39 percent
Ethical Cultureof Gen Z employees
Report—Lessons from the Pandemic:
reportedAccountability Reignsnot
that they chose andto
Gen Z Refrains which can be
report
downloaded misconduct
here. when they witnessed it. That represents just over an 11-point gap between
them and both their Gen X and Boomer colleagues.
and how are On employees
their own, thinking about
falling levels ofthe employees
reporting that we
rates, survey, that
declines in traditional thereporting
pandemic. Of the seven categories
channels,
their seniorand
leadership team?in
increases And therereporting
non-traditional is less misconduct
channels that dotheynot suggestthat increased,
anything bullying was far and
major
finally, howafoot,
do theyespecially
employees perceive
consideringbelieve
the low is taking
overall place, but those whoof the changes
percentages away the biggest
reported. one, at 13 points. The
their co workers and their immediate are seeing something are also less next highest category was “violations of
environment? These constitute
Likewise, the sharp the increase inarebullying
willing to ascome forward
a type ofthan they misconduct,
reported health andwhilesafetyeye-
policies,” and that only
Eight Pillarscatching, is not enough to determine
of Ethical Culture. might haveabeen major trend
before on its own andincreased
the pandemic. could see by aalittle
fallmore
in than a single
the years to come as businesses adapt toremains,
The questions post-pandemic
why? What isworking percentage conditions. point. Within the margin
When we compare our survey data to driving some of these different types of error, really. So that helps to put the
However,
the Eight Pillars, one ofthese
the firstchanges
things are of
allbehavior
happening simultaneously, and over
in this environment? a particularly
bullying statistic into perspective, I think.
turbulent
that stood out to us is that whenof
period youtime
look(the COVID-19 pandemic), when companies had went
Bullying to suddenly
through the roof, and really
shift to remote-working
at the data after March 2020—which for (or shut down entirely) and
Before we get to that, however, it isin many cases, shift back
is an outlier here.once the impressive.
It’s pretty
worst of the pandemic
a lot of people is when the pandemic had concluded.
worth noting that when we looked at
timeframe really begins—many of the what types of misconduct folks are Another interesting thing about
But there is another changeobserving,
results we measure increased in terms
that demands our attention: the growing
just about every one of the
presence of
this survey is the degree to which it
Gen Z employees, who are 25 years or younger, many of whom entered the
of their overall perception. Employees different classifications of misconduct we breaks down data by generational
workforce for the first time during the pandemic, in an environment of disrupted
really put more trust in their employers measure all went down
working conditions, and to potentially unprepared managerial leadership.over the course cohorts—specifically, Boomers, Gen
across just about every dimension of the pandemic. There is one category, X, Millennials, Gen Z. What findings
that we looked at, in terms of the however, that really skyrocketed over the did that particular approach yield?
pre- and post-pandemic landscape.
That is at a broad thematic level.
last few years, and that is bullying. As the
T H E 2 0 2 3 data
pre- and post-pandemic E T H Ishowed,
S P H E R E E T H I CSome
A L C pretty
U L T U Rexciting
E REPO 12
RT
results came from
we saw a 13 percent jump in bullying looking at this data from a generational
There is, of course, a lot of nuance in misconduct claims. So that was one of perspective. As a caveat to the audience,
the details. If we really focus on one of the findings that really jumped out to us. the age categories we group data into
our hotbed areas—the pillar observing use generational terms that are very U.S.-
and reporting misconduct—we see Let’s focus on the bullying piece for centric, but the data itself comes from
some really interesting results when a moment. Can you talk about the around the world. When organizations
we compare pre- and post-pandemic rise in bullying claims, especially administer the survey and collaborate
data. After the pandemic, the volume of compared to how other forms of with us to measure their own culture, a
misconduct that employees said they misconduct rose or fell during lot of times they will indicate age ranges
observed went down. However, when the pandemic? How much of an or age values, and those all get grouped
we asked those individuals who did in outlier is the bullying situation? under the similar classification. And then
fact see something, if they raised their as part of our analysis, we apply more
hand to say something, that proportion When you look at the 27 different types U.S.-centric terms, such as Gen X, Gen
is also decreasing. So ,we are seeing of misconduct that we measure, I believe Z, Millennials, Boomers, and so on.
a decrease, at least from the eyes of 20 of them actually went down over
18 ETHISPHERE.COMTHE 2023 ETHISPHERE ETHICAL CULTURE REPORT
With that being said, what was were some of the key generational just starting to allude to what these
interesting in the data is that several differences that we saw, among others, changes could be. The research on
different dimensions jumped out. The when specifically examining the lens of generational culture that we are seeing
one I will touch on one for now, and speaking up and reporting misconduct. from other sectors and from other
let folks dig into the report for some sources is really indicating that what we
more information, is Generation Z, This is the crux of it. To be candid, are seeing in the 2023 Ethical Culture
or employees among the youngest the way in which we measure these Report is part a much broader piece.
class of survey respondents by our survey results within Ethisphere, we
definition, which is 25 years of age or are blessed with the opportunity to Businesses that have relatively young
younger. When looking at trends around work with some of the most forward- workforces—especially companies in the
an overall willingness to speak up, thinking, most developed, most retail and food service industries—are
Generation Z employees are actually integrity-focused companies in the probably seeing a lot of this already. If
less likely to report than those in their world, including those who partner with they are not taking this opportunity to
older generational peer groups. They us to measure their culture specifically. speak with some of their compliance
are 10 points less likely to report than peers who are already having this
their Generation X colleagues. Those The first recommendation is fairly experience, then they are not exactly
who are just entering the workforce now obvious, but you’ve got to measure preparing themselves for what is to
are showing some reluctance to report ethical culture. That expectation is come, potentially. This is a big change,
misconduct, so we really dug into the coming down from the regulators culturally speaking. The data alludes to
data to figure out what is driving this. themselves as something they are it, and we are seeing it in other research.
putting an increased focus on. In the So, be proactive and prepare your teams,
What we are seeing is that Generation Monaco memo, and some of Ken Polite’s your organization, and your compliance
Z employees broadly seem to have a comments in some of his speeches, programs for this new generation of
.
very good awareness of the concept of making a culture of compliance is top young folks coming into the workplace
non retaliation, and there is decent faith of mind for these regulators. Measuring and be the change requires to
behind how they feel their organization culture is something you need to communicate effectively with them.
supports that policy. But when you look be doing. You’ve got to put forward
at the why behind Gen Z, and what the resources. This has to become a The 2023 Ethical Culture Report—
they are thinking through in terms of priority as an ethics and compliance Lessons from the Pandemic:
not reporting misconduct, the same professional, to figure out what your Accountability Reigns and Gen Z
two responses that we see across other employees thinking. These are your Refrains can be downloaded here. This
generations also come to the top. The internal customers, right? Are they interview originally appeared in video
first is the concern that if they raise their satisfied with the service you’re providing form as an episode of the Ethicast. To
hand, they don’t think anything is really as part of the compliance team? Are they watch that episode, please click here.
going to happen as a result. It is a lack engaging with materials you’re providing?
of faith that something will be done What is really their take on the services
about what has been reported. And the you are delivering as a compliance ABOUT THE EXPERT
second is that there is an underlying fear function across the organization?
of retaliation among those who say they Doug Allen is the Vice President of
observed misconduct but did not report The second recommendation is to look Data Strategy at Ethisphere, where he
it. There are some differences between at the generational trends we are seeing leads benchmarking, certification, and
generations around those two reasons, come out of this report. To my mind, this partnership efforts. Previously, Douglas
but they do represent a common thread data and some of the research we are spent six years providing compliance-
across all generational classifications. seeing elsewhere suggests that this is and ethics-related advisory services,
really the tip of the proverbial iceberg. including developing compliance
We also noticed that the younger an We are already seeing articles in The and ethics risk assessments, codes
employee is within their organization, Wall Street Journal, and John Haight at of conduct, corporate policies and
the stronger their perception is of their NYU, Stern saying, “Look, there’s a crisis procedures, and communication
own reputation within their team. With among Gen Z. They’ve been awash in this and training curriculum plans.
Generation Z employees, reputation victimhood mentality. Social media has
matters significantly more than any other played a significant role in their general
generational classification. As a result, mental health and well-being. These
Generation Z employees are saying they Gen Z individuals are now transitioning
are concerned about the reputational out of college to the workforce, and
harm that reporting misconduct will as they do, that is bringing significant
cause to themselves, and to their team if ramifications to compliance and ethics
they raise their hand and say something. teams, as well as to businesses in
That was one dimension of our general around the world. So I think the
findings that really jumped out. Those data that we are seeing today is only
ETHISPHERE.COM 19THE 2023 ETHISPHERE ETHICAL CULTURE REPORT
Transparency & Trust
with Cassidy Davis
Interview by Bill Coffin
The 2023 Ethical Culture
Report offers plenty of
insight on what some of the
emerging issues are when
it comes to what different
groups of people expect
when it comes to business
integrity from their workplace,
particularly Generation Z.
So what can companies do
to act on these findings and
build a better ethical culture
of their own? Drawing on
her own experience as a
CASSIDY DAVIS
Client Success Manager for
Ethisphere, and having seen
The Ethical Culture Survey yielded do when it comes to bullying is not
field-tested solutions at work, some surprising data on how much that dissimilar from what works with
bullying has grown as a cause for other issues, as well—is to promote
Cassidy Davis has some ideas. missing a reported misconduct, speaking up. I have seen that done
rising by 13 percent over the course most effectively specifically through
of the pandemic, far more than how companies communicate the
any other form of misconduct in reporting process to their employees.
the survey. How can companies What does that look like? How do you
take action to address this? use it? What is the hotline? What is the
reporting portal? Who can you go to?
I was surprised by that finding on What happens during the process?
bullying as well. What organizations can How transparent is the process? Do you
do—and what I’ve seen organizations highlight the fact that there are many
different outcomes of an investigation?
20 ETHISPHERE.COMYou can also read
