In this podcast series I visit with Pat Harned, the Chief Executive Officer (CEO) of Ethics and Compliance Initiative (ECI) about the firm’s 2018 Global Business and Ethics Survey (GBES). In this series we consider each of the four GBES reports released by ECI. These include The State of Ethics & Compliance in the Workplace, released in Q1 2018; Measuring the Impact of Ethics & Compliance Programs, released in Q2; Building Companies Where Values and Ethical Conduct Matter, released in Q3 and Interpersonal Misconduct in the Workplace: What It Is, Where It Occurs and What You Should Do About It, released in Q4. We discuss each report in a separate podcast and then in Part V, tie them all together. Today, in Part 4, we consider the survey Interpersonal Misconduct in the Workplace: What It Is, Where It Occurs and What You Should Do About It.

A decade ago, companies made headlines for problems such as bribery, financial manipulation, and fraud. The attention has shifted, though. For the past year, mistreatment of employees, especially abusive behavior, sexual harassment and discrimination, has joined data privacy as a critical issue of our time. #MeTooand #TimesUphave given a name to the larger effort to unearth problems that have festered and to find a path towards safer more respectful workplaces. Efforts to expose the issues have uncovered repetitive patterns of interpersonal misconduct in organizations around the world.

This topics of sexual harassment, sexual assault discrimination and/or abusive behavior has been a part of the compliance conversation, just as in society for at least the last two years. GBES is designed to measure trends in workplace misconduct. Unfortunately, one of the leading types of misconduct that people observe is always abusive and intimidating behavior by supervisors towards their employees. The Q4 survey was designed to explore that issue a more. ECI also wanted to take the pulse around sexual harassment and discrimination in the workplace.

Harned said the survey found, “12% of people observed some type of abusive behavior in the workplace and another 12% observed some type of sexual harassment. Even worse was the finding that 21% observed abusive or intimidating behavior and that most were not isolated incidents, with 62% happening on multiple occasions.

One of the most important things about #MeToohas been to raise the awareness that these problems are not simply the responsibility of those harassed, discriminated against or abused. It is the responsibility of someone who sees such conduct to report it. I was therefore interested in what the survey showed on this issue. Harned said, “There are certainly a few risk factors that I think drive a fair amount of people’s decisions when they are observing these types of behaviors, whether or not they’ll come forward and actually report it.

The first is their perception of leaders, whether or not this is something that we’ve sort of seen over the years, that people’s beliefs about their leaders, the conduct that they display, but also their belief about whether leadership really cares about this issue also affects their willingness to come forward.”

The second factor is the focus of the environment of the business, which focused on processes versus outcomes. Harned said, “One of the things that we found was that when an organization focuses on performance and the way they incentivize people; it has a substantial influence on the extent to which they’re observing” untoward behaviors; whether it be abusive behavior, sexual harassment or discrimination in that environment. The survey found that if you have a focus on the overall outcomes as the bottom line, there is usually not an environment of accountability. As Harned stated, “it’s a real problem for a lot of organizations.”

The third factor is the extent to which the organization is going through a fair amount of transition and change. These three items “drive employees decisions about whether they will come forward to report, whether they’ll take action when they’re seeing this kind of behavior in their environment. We have seen this to be a trend with other types of misconduct as well, that there are certain types of shifts that happen in an organization where misconduct is likely to be higher, for example, that would include expansion into new countries, mergers, acquisitions of another organization.” Yet, it can include other events which are familiar in the life of a corporation including  “substantial changes in top management, changes in leadership, layoffs, restructuring, downsizing, and any measures that companies take to cut costs.”

The survey found that employees are “3.8 times more likely to observe discrimination if their organization is going through transition and they are 3.5 times more likely to observe sexual harassment. Finally, organizations going through such transitions are 2.5 times more likely to observe abusive behavior.” Harned concluded, “There’s something about organizations in transition that changed the way people relate to each other or it. Unfortunately, it allows this sort of behavior that goes over the line to take place if heightened awareness.”

The bottom line is that heightened awareness of interpersonal misconduct and the toll it takes on individual employees and organizations is a positive development. But more needs to be known about the nature of the issues, the scope of problems, the factors that exacerbate problems and strategies for fostering respectful workplaces.

Join us tomorrow when we conclude our series by considering the scope of what these four GBES components mean for companies, the compliance professional and the compliance profession. 

For more information on ECI, check out their website by clicking here.

To obtain a copy of all four of the 2018 GBES surveys, click here.