There’s some good news and some not-so-good news to emerge from the findings of the Ethics & Compliance Initiative’s new Global Business Ethics Survey.
For instance, the poll of more than 5,000 U.S. employees finds reporting of suspected wrongdoing in organizations has reached a historic high. That’s good. On the other hand, the number of employees claiming they’ve faced retribution for reporting these alleged misdeeds has doubled over a five-year span.
Overall, 69 percent of employees said they reported misconduct they have observed; a 19-percent increase compared to just two years ago. That number is the highest the ECI has seen since the inception of the GBES, according to the organization. In terms of retaliation, 44 percent of respondents said they had experienced retaliation for reporting, compared to 22 percent saying the same in 2013.
ECI has fielded this study biannually since 1994, in an effort to keep business leaders abreast of emerging ethical issues and help them update benchmarks accordingly, says Patricia Harned, the organization’s CEO. Harned was not shocked to see an increase in retaliation, given the rise in reporting. She was, however, somewhat taken aback to see how the number of employees claiming retaliation spiked in comparison to the rise of incidents reported overall.
“We expect to see retaliation increase when reporting increases. Throughout our GBES studies, we see the two rise and fall together,” says Harned. “However, this year retaliation is much higher than it should be.”
Harned sees several likely factors at work.
“One reason might be that the majority of acts that employees observe are undertaken by managers and senior leaders,” she says. “Therefore, it might be that the supervisors or leaders involved are retaliating when their wrongdoing is discovered.”
Employees are also becoming increasingly aware of retaliatory behavior, and “are more likely to acknowledge it and respond when it takes place,” continues Harned.
Over time, “the definition of retaliation has become better defined and, in some cases, more broadly defined. Therefore, this broadened view of retaliation, in addition to the increased reporting, would suggest that maybe retaliation was under-reported in the past,” she says, adding that “it’s possible that workplaces are changing, in large measure because of the rise of #MeToo and similar movements.”
Many companies are indeed taking strides toward implementing more “open-door” policies with respect to reporting misconduct. But that doesn’t necessarily mean that employees are well-received when they speak up about seeing untoward behavior within the organization, says Vincent McKnight, the Washington, D.C.-based co-chair of Sanford Heisler Sharp’s whistleblower practice.
“In my experience, very few companies reward employees who step forward and report misconduct,” says McKnight. “While, logically, employees who do this are giving the company an excellent opportunity to proactively correct a problem before the authorities discover it, many companies consider this an attack on the company, and treat the whistleblower as a threat to the culture.”
HR leaders, of course, must help ensure that those who speak up feel protected in doing so, says Jill Vorobiev, a Chicago-based partner at Reed Smith.
“HR leaders are tasked with creating a culture in which reporting is encouraged, yet those who are engaging in misconduct are likely acting against that very same directive,” says Vorobiev. “In the first instance, it is important for HR leaders to impart to all those within their organization that misconduct will not be tolerated.”
Clearly communicated and comprehensive policies prohibiting retaliation, harsh discipline and even termination for those found to have engaged in retaliation set an example that retaliatory behavior will not be tolerated. These steps are crucial in reducing the likelihood of reportable incidents, says Vorobiev.
And, for those reports that are made primarily to fend off adverse personnel decisions, “it is also important to ensure that leaders appropriately document personnel issues with employees as they are occurring,” she adds, “so as not to provide ‘false’ protections to those bringing forth complaints.”
Ultimately, “the good news is that the rates of employees reporting misconduct (or whistleblowing) are at their highest ever,” says Alicia Anderson, an associate in Nixon Peabody’s Los Angeles office. “That means that more employees are feeling comfortable coming forward and reporting perceived misconduct.”
In some cases, an initial report of misconduct is investigated and closed, “and HR might never hear anything further from the employee who made the report,” says Anderson.
“While many employers have anti-retaliation policies in place, HR leaders need to make sure that employees feel just as comfortable reporting perceived retaliation as they are reporting the perceived misconduct in the first place,” she says. “Otherwise, the organization might not be aware that retaliation is occurring and might not have an opportunity to correct it.”