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- today, 12:18 PM
- theguardian.com
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According to Violation Tracker, the top 100 regulatory fines, criminal penalties, and class-action settlements for U.S. corporate wrongdoing since 2020 amount to an astounding $221.9 billion. How much money is that? Let’s put it this way: the National Football League is worth about $207 billion, so this would be like dissolving the biggest sporting league in the U.S.
In April, U.S. corporations passed the $1 trillion mark for fines, penalties, and settlements since 2000. And none of this includes the harm done to brand reputation, lost research and development resources, missed investment opportunities, and elevated costs associated with finding and retaining talent. Simply put, the cost of corporate misconduct is almost too mammoth to imagine.So, why do these misconduct fiascos happen again and again? The answer is fairly simple. According to Ethisphere research, up to 75 acts of employee misconduct per 1,000 employees go unreported every year. When employees don’t speak up against misconduct, bad actors introduce potentially ruinous levels of legal and regulatory risk into the enterprise. Weak speak-up culture is inflicting terrible wounds upon companies. Thankfully, there are ways to get employees to report something if they see something.
The speak-up gap
The key to a strong speak-up culture lies in understanding its core challenge: getting otherwise honest, ethical employees to report misconduct when they witness it. Ethisphere maintains the largest dataset of employee culture survey responses of its kind, and of the millions of employees we have spoken to, 97% of employees say that they would be willing to report misconduct if they witnessed it. But at the moment of truth, only 50% of employees who witness misconduct actually report it. Again, when we put that in perspective, a company with 10,000 employees should expect between 500 and 1,500 misconduct incidences a year, yet half of which will likely go unreported.
When asked why they didn’t report misconduct, 48% of employees said they were afraid they would face workplace retaliation for it. Another 48% said that they were afraid that corrective action wouldn’t be taken. And these numbers persist, even though 83% of employees are aware that their employer prohibits retaliation against employees who report misconduct or participate in an investigation, and 87% of employees believe their manager will uphold anti-retaliation policies. Clearly, there’s some work to do.
6 best practices to supercharge a speak-up culture
Despite those discouraging numbers, there is one area where you can make a huge difference by concentrating your efforts, and that’s on training your people managers to be speak-up champions. Sixty percent of employees report misconduct directly to their managers, which is six times as often as they use reporting hotlines. People managers are also the front line for speaking to employees (and other parts of the organization) about values, mission, doing business the right way, and creating an environment where people feel comfortable voicing concerns when something isn’t working right.
People managers are the lifeblood of ethical culture within any organization. You cannot have a strong speak-up culture unless your leadership is actively embracing, promoting, and applauding it as a central part of business integrity. Let’s look at some of the most impactful practices to improve a culture of ethics:
Strong organizational cultures don’t just happen. They require intentional support so employees know that when they do the right thing, they will get the support they need. Speaking up is an act of integrity. Let’s all make sure that it doesn’t have to be an act of courage, too.
Erica Salmon Byrne is the chief strategy officer and executive chair for Ethisphere.
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