In a recent episode of the FCPA Compliance Podcast, we discussed the 2024 Ethisphere Ethical Culture Report, “Closing the Speak Up Gap,” with Erica Salmon Byrne. As an expert in ethical culture and a familiar voice to our audience, Erika shared invaluable insights into this comprehensive report’s genesis, findings, and implications. Today, we delve into the critical aspects discussed in the podcast, focusing on how organizations can bridge the speak-up gap and foster a more ethical workplace culture.
The 2024 report builds on the foundation laid by last year’s inaugural culture report, which provided a broad overview of trends in ethical culture based on data collected over several years. Recognizing the value of this data-driven approach, Ethisphere committed to making the culture report an annual publication. This year’s report draws on data from approximately 2 million employee responses collected since the beginning of 2020, offering a current and comprehensive perspective on workplace culture during and after the pandemic.
Erica outlined the eight pillars of an ethical culture, which serve as the backbone of the report.
- Awareness of Ethics and Compliance (E&C) Program and Resources
- Perceptions of the Effectiveness of the E&C Function – Training, Communications, etc.
- Observing and Reporting Ethical Misconduct
- Pressure to Compromise Standards to Meet Goals
- Organizational Justice – Perceptions of Wrongdoer Accountability Across Roles
- Manager Perceptions – Supervisor Conduct and Ability to Approach with Concerns
- Perceptions of Conduct, Values, and Communications of Senior Leadership
- Perceptions of Values and Priorities Among Peers and Environment
These pillars are grouped into three categories that ethics and compliance teams should prioritize:
- Knowledge and Training: Do employees know what to do, and is the training effective?
- Willingness to Report: Will employees speak up when they see something wrong?
- Influence and Leadership: Who influences employee behavior the most?
These pillars provide a framework for understanding and measuring an organization’s various dimensions of ethical culture.
One of the most significant findings from this year’s report is the persistence of the “speak-up gap” – the difference between employees observing misconduct and those reporting it. Approximately 50% of respondents indicated they do not report observed misconduct. This gap is particularly pronounced among younger employees, who exhibit the least faith in the system and are the least likely to speak up.
Retaliation remains a significant barrier to reporting misconduct. Despite years of discussion and policy implementation, there still needs to be more clarity between what organizations believe they are doing to prevent retaliation and what employees fear. Employees’ concerns about retaliation extend beyond illegal acts, including any negative treatment following a report. This fear of retaliation and belief that nothing will change continue to discourage employees from speaking up.
A critical insight from the report is the importance of managers in the reporting process. The data revealed that 60% of employees report misconduct to their immediate managers. This underscores the need for compliance programs to equip managers with the skills and knowledge to handle these reports effectively. Managers must be trained to receive reports and support their teams inappropriately making ethical decisions and escalating issues.
Another intriguing aspect of the report is the “tenure smile,” a pattern where new and long-tenured employees are more likely to speak up. In contrast, those in the middle of their tenure are less inclined to report misconduct. This phenomenon may be linked to career aspirations and established relationships within the organization, which can create a reluctance to report issues that might jeopardize professional advancement or personal connections.
Based on the report’s findings, several strategies can help organizations bridge the speak-up gap:
- Enhance Manager Training: Invest in training programs that prepare managers to handle reports of misconduct effectively. This includes teaching them how to listen, respond appropriately, and escalate issues as needed.
- Improve Reporting Channels: Simplify and promote reporting mechanisms to ensure employees know how to report misconduct and feel confident that their concerns will be addressed.
- Data Integration and Analysis: Use data from various sources, such as HR, audit, and safety, to identify patterns and pockets of silence. This holistic approach can help pinpoint areas where reporting may be suppressed.
- Address Retaliation Concerns: Develop comprehensive anti-retaliation policies and communicate them clearly to employees. Ensure that any negative treatment following a report is addressed swiftly and transparently.
The 2024 Ethisphere Ethical Culture Report offers many actionable insights for compliance professionals. By focusing on enhancing manager training, improving reporting channels, and addressing retaliation concerns, organizations can make significant strides in closing the speak-up gap. As Erika emphasized, building a culture of integrity requires ongoing effort and commitment. By leveraging the findings of this report, compliance teams can better support their organizations in fostering an ethical workplace culture.
The conversation with Erika Salmon Byrne highlighted the importance of data-driven insights in understanding and improving organizational ethical culture. As compliance professionals, we must continue to advocate for and implement strategies encouraging employees to speak up and ensure their voices are heard. The 2024 Ethisphere Ethical Culture Report provides a roadmap for achieving these goals and underscores the critical role of managers in the process. By taking these insights to heart and applying them in our work, we can create a more transparent, ethical, and supportive workplace for all employees.
