E&C Pulse - November 20th

November 20, 2018 Ben DiPietro
 
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TOPICS OF CONVERSATION
 
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Portugal Paradox Highlights Role Support Plays in Ethical Cultures

Workers in Portugal are more likely to deem unacceptable than their European counterparts instances of workplace cheating, such as calling in sick when not sick or padding an expense report, according to a report from the Institute of Business Ethics. 

The report found a higher percentage of Portuguese employees who said they witnessed improper behavior than workers in other parts of the European Union, and who said they felt pressured to act unethically.

The survey of 775 Portuguese employees found 97% of workers in Portugal versus 90% for all of Europe would find certain workplace behaviors unacceptable. Just 9% of Portuguese said awarding contracts to friends and family was acceptable, compared with 19% for Europe, and only one-third said it was OK to make personal phone calls or use the internet, while Europe in general was at 47% and 41%, respectively. 

While workers in the country show more awareness about the right way to do things in the office--an indication that companies in Portugal are doing a good job of engaging with employees on the importance and necessity for ethics and compliance--22% said they nonetheless were pressured to compromise their organization's ethical standards, well above the 16% for Europe.

This matters because the survey found employees who experience pressure to misbehave are less likely than those who haven't (41% vs. 67%) to say their manager sets a good example when it comes to acting ethically, or to say their manager communicates the message of doing work with honesty and integrity (47% vs. 62%). 

"I think that an important conclusion from the survey is the impact that a supportive environment has on corporate culture," Guendalina Dondé, a senior researcher at IBE and the report's author, told LRN.

"Looking at the differences between employees' perceptions between organizations that provided a supportive environment for ethics--which includes the tone from the top and good stakeholder engagement--and organizations regarded as unsupportive, the data tell us that providing such an environment influences culture at least as much as, if not more than, the provision of the elements of an ethics program," she said. 

In practice, Dondé said means that though compliance is important, enforcing the rulebook is not enough to minimize ethical risks. "Organizations need to move beyond the ethics program. Our survey indicates that employees want to do the right thing, they just need to be supported by their employers to do so." 

IBE Director Philippa Foster Back said employees are under more stress to deliver results, and this can lead to pressure to cut corners. The survey results should serve "as a warning sign to organizations that they need to be more supportive of their employees when it comes to making ethical decisions," she said. 

So what can companies do with this information to improve their own ethics and compliance programs? 

The results show organizations need to invest in ethics, not just in terms of financial resources but also in terms of people, said Dondé. "Ethics needs to be seen as everybody's responsibility," she said. "At the moment there is still some work to be done in this direction." 

This is important because nearly 25% of survey respondents across Europe said they were aware of misconduct at work but didn't tell anyone because they felt it was none if their business, said Dondé. That statistic signals an extremely disengaged workforce that is at higher risk of ethical lapses, she said. 

"Our survey found that employees in organizations with a supportive ethics environment...are significantly less likely to say they have felt pressured to compromise ethical standards, and are also significantly more likely to report misconduct," she said. 

Organizations need to make sure that managers especially are trained and supported in ethical decision-making and responding to feedback, especially as pressure on all employees increases. "Managers play a key role in defining an organization’s ethical culture," said Dondé.

The report noted one area where Portuguese companies need to pay more attention, and that is in how the messages of ethics and compliance are received and acted upon by different employee generations. For instance, the survey found 16% of workers aged 18-34 said it was OK to favor friends and family, compared with 6% of workers 55 and older.

"Understanding the different characteristics of the generations is fundamental to building an ethical culture," said the report. "Organizations have to keep this in mind when building their ethics program and should think about how these factors can be taken into consideration when designing a training program."

 

Ben DiPietro
@BenDiPietro1
ben.dipietro@lrn.com

 
MIND NUMBERS
 
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LRN's 2018 E&C Program Effectiveness Report asked organizations how effective their ethics and compliance programs are when it comes to providing advice and enabling better decision making, and found 48% of high-performing companies were almost always effective, compared with 10% of organizations deemed low performing. Forty-six percent of high performers rated their efforts as often effective, compared with 38% of low performers, while 5% of high performers said they were sometimes effective, versus 33% of low performers. High-performing organizations didn't report any instances of being rarely effective or never effective, compared with 14% of low performers who said rarely and 4% who said never.
 

 
WHAT'S NEWS
 

The Securities and Exchange Commission awarded $168 million through its whistleblower award program for the fiscal year ended Sept. 30., the National Law Review reports.

A survey of respondents from about 370 banks by consultancy Alix Partners found 44% said they don't offer, or aren't aware of, training in anti-money laundering or sanctions to board members, Samuel Rubenfeld of WSJ Risk & Compliance Journal reports. 

Davia Temin writes in Forbes about the seven deadly sins of crisis management, and how Facebook committed all seven sins.

Researchers created fake fingerprints that were able to pass as real ones in more than 20% of instances on a system designed for an error rate of one in 1,000, The Guardian reports.

A Harvard Kennedy School research fellow is planning to hold a boot camp for U.S. lawmakers and other policy makers to help them better understand the ethics of artificial intelligence so they can craft more informed regulations, MIT Technology Review reports. 

Harvard Business Review looks at what managers can do when they find themselves in cultures where bribes are a regular part of doing business.

Despite fears about robots, artificial intelligence and advanced technologies taking away manufacturing jobs, Deloitte reports it's likely these disruptions will create more jobs than they displace. But will workers have the necessary skills for those jobs?

 


 

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