U.S. rates of reported misconduct set national record; retaliation has doubled

Reporting of suspected wrongdoing in organizations nationally has reached a historic high, while rates of retaliation for reporting of suspected wrongdoing have doubled in the last two years, according to the Ethics & Compliance Initiative’s (ECI) Global Business Ethics Survey (GBES). Sixty-nine percent of U.S. employees said they reported the misconduct they observed (a 19 percent increase and all-time high since the inception of ECI’s research), and when asked if employees had experienced retaliation for reporting, 44 percent of respondents revealed that they had been retaliated against (compared to 22 percent in 2013). Historically, ECI has demonstrated that reporting and retaliation rise and fall together; however, this year retaliation rose significantly higher than reporting.

“The data suggest that, while conduct in organizations has improved, there is cause for concern,” said Patricia Harned, CEO of ECI. “Pressure for employees to cut corners is on the rise, along with retaliation for reporting. Previous GBES studies have shown that these are the two indicators of trouble ahead.”

Additional highlights of the U.S. data show:

Rates of observed misconduct have declined 15 percent since 2013, close to historic low.
16 percent of employees experienced pressure to compromise ethical standards, a 23 percent increase since 2013. Additionally, 84 percent of these employees also observed misconduct.
1 in 5 employees state that their company has a strong ethical culture, indicating that little progress has been made to implement the most important strategy for mitigating wrongdoing. Further 40 percent of employees believed that their company has a weak or weak leaning ethical culture; a trend that has not notably changed since 2000.

“This latest update on the state of ethics & compliance sends a warning signal to every business leader,” Harned said. “Rather than taking comfort in the low levels of misconduct right now, leaders should be concerned that the situation will likely change.”

Global findings. On a global scale, the survey reveals:

India has the highest reporting of observed misconduct (82 percent); Russia has the lowest (37 percent).
Indonesia has the highest rate of observed misconduct (48 percent); Japan has the lowest (15 percent).
India has the highest rate of retaliation against employees (74 percent) China has the lowest (29 percent).
Brazil has the highest rate of pressure to compromise ethical standards (46 percent); Spain has the lowest (10 percent).

About the survey. The GBES consists of data from two surveys, one focused exclusively on the U.S., and another on global data. The GBES, a biennial longitudinal study, identifies changes in the levels and types of observed misconduct in business organizations. It also measures employee patterns in reporting observed misconduct, perceptions of leader, strength of ethical cultures, and the extent to which retaliation is an issue in the workplace. In December 2017, ECI continued its longitudinal study of the US workforce and collected data from over 5,000 employees. ECI began its longitudinal study in 1994, and has since surveyed over 39,000 US employees. In 2015, ECI conducted a global survey of 13 countries. In 2017, ECI updated the global data with findings from an additional five countries. In total, ECI surveyed 18,000 employees from across the globe.

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