2009 Ethics Survey ResultsJohn H. Engel

Senior AccountantUniversity of Notre Dame

Why this survey makes senseWhy do we care of about EthicsAnswer should be obvious to us all2002 was a bad year for Ethics in America

with Enron and other companies2007 showed a return to pre Enron problems

SOX may not be working

2009 Bad Recessionary Period-What kind of effect is this having on Ethics

Background for SurveyThe Background The Ethics Resource Center began collecting

data in the mid-1990s to assess the state of ethics in the American workplace. Its National Business Ethics Survey® has been in the field every two years since 2003.

In 2007, NBES benchmarking showed that key measures of workplace ethics had declined since 2005. The decline appeared to be at a pre Enron level. What effect the recession has had on workplace ethics is the focus of the 2009 survey.

Key Measures shown in SurveyMisconduct at work is down.

Whistleblowing is up.

Ethical cultures are stronger. Pressure to cut corners is lower.

Impact of RecessionThe Recession’s Impact on Standards and Culture A closer look at the 2009 results shows that, while

overall results were surprisingly good, some – although relatively few – said the recession had had a negative impact on ethical culture and standards.

22 percent agreed that “the recession has negatively impacted the ethical culture within my company.”

10 percent said that “to stay in business during the recession, their company lowered its ethical standards.”

This erosion of culture had further implications. 78 percent affected by company’s effort to weather the

recession.

Continued

Type of Retaliation

Perceiving Pressure to CommitMisconduct

Conclusions and RecommendationsWe are experiencing an ethics bubbleExecutives who don’t elevate culture to a

priority risk long-term business problems

Conclusions and Recommendations Recommendations for ExecutivesPrepare for the return of business as

usualEstablish performance goals for senior

managers on ethical leadership.

Conclusions & RecommendationsRecommendations for DirectorsCreate an ethics committee of the boardRecruit knowledgeable ethics

professionals to serve on the board.Establish financial incentives for ethical

leadership by the CEO.

Conclusions & RecommendationsRecommendations for Policy MakersEmphasize culture and principles.Encourage the creation of board ethics

committeesEncourage disclosure about corporate

ethical culture.

Conclusions & RecommendationsRecommendations for Ethics & Compliance ProfessionalsFocus on culture and collect data.Start with management, especially if

your organization is taking recession counter-measures

Prepare for the return to business as usual.

Survey CopiesIf you would like a copy of the survey please

go to:

http://www.ethics.org/nbes/download.html

CreditsAll information presented comes from the

2009 National Business Ethics Survey from the Ethics Resource Center

Website: http://www.ethics.org

A little Ethics Humor!!A defendant in a lawsuit involving large sums of money was talking to his lawyer. "If I lose this case, I'll be ruined." "It's in the judge's hands now," said the lawyer."Would it help if I sent the judge a box of cigars?""Oh no! This judge is a stickler on ethical behavior. A stunt like that would prejudice him against you. He might even hold you in contempt of court. In fact, you shouldn't even smile at the judge." Within the course of time, the judge rendered a decision in favor of the defendant.As the defendant left the courthouse, he said to his lawyer, "Thanks for the tip about the cigars. It worked!""I'm sure we would have lost the case if you'd sent them" said the lawyer."But, I did send them" said the defendant."What? You did?" said the lawyer, incredulously. "Yes. That's how we won the case." "I don't understand," said the lawyer."It's easy. I sent the cigars to the judge, but enclosed the plaintiff's business card."