Richard Bowen

  • Home
  • About
  • Speaking
  • Videos
  • Media/Press
  • Testimonials
  • Blog
  • Contact
  • +1-214-604-5492

July 26, 2018 By Richard Bowen

Ka – ching! Ethics Increases the ROI!

The Ethics & Compliance Initiative (ECI), the oldest ethics research and best practice community in the US, recently released the second installment of the 2018 Global Business Ethics Survey (GBES).  The report’s findings focus on the impact that an ethics and compliance (E&C) program has in the workplace, and the return on investment (ROI) for program development and improvement. 

The GBES, which comes out four times a year, is considered the most comprehensive, cross-cultural survey of workplace behavior. The data gathered clearly points out that “improving the quality of certain factors of an Ethics and Compliance (E&C) program, at any stage of the program implementation process, has a positive impact to the organization.”

One of the key questions asked by the Ethics & Compliance Initiatives is, “does it make a difference when a company dedicates more resources and heightens the priority of their E&C efforts?”

To find answers, ECI queried employees of companies with E&C programs. ECI also separately evaluated the degree of E&C implementation according to their High Quality Program implementation continuum. They found even the minimum standard of E&C implementation gave very encouraging results. Not surprisingly they also found that employee pressure to compromise values is consistent with the rise and fall of the S&P index.

They asked: Does E & C program quality matter?

Is there a measurable ROI?

Is the investment impact felt?

They found certain factors central to business strategy in those who follow an ethical construct. Risks are identified, owned, managed and mitigated; a culture of integrity is critical and leaders at all levels must build and sustain that. In addition, the organization encourages, protects and values the reporting of concerns and suspected wrongdoing. The organization also acts and holds itself accountable when wrongdoing occurs.

When employees are encouraged to base decision making on organizational values and standards, favorable ethics outcomes increased  by 11X; when employees felt that their supervisors would hold them accountable for wrongdoing, favorable ethics outcomes increased 12X; and when employees felt encouraged to speak up even with bad news, favorable ethics outcomes increased by 14X.

Without question, the results absolutely confirm what I and others who speak for and consult with companies about the necessity of establishing an ethical culture have known and advocate: ethical behaviors pay off – for the better.

This is not new news. In fact in 2012, the Great Place to Work® Institute report noted the stock price growth of the 100 firms with the most ethical cultures outperformed stock market and peer measures by almost 300 percent. Thus, researchers have shown that a firm’s culture is the strongest predictor of how much market value that firm will create for shareholder investments.

Yet, in at least half of our workplaces, employees report seeing unethical or actual illegal practices. Lapses in ethics are costly in loss of trust and erosion of confidence on the part of employees and customers. And, there are financial consequences including fines, loss of business, bankruptcies, and more which I’ve talked and written about often. Yet, unethical practices continue, despite the cost in employee turnover, loss of  customer loyalty, lost revenue and the list goes on.

The GBES report found that even if an organization adopts ethics and compliance principles at a minimal standard, employees were 132% more likely to report misconduct and 270% more likely to be satisfied with the organizations’ response compared to an organization with no program.

The survey found that in stronger ethical cultures employees have a greater tendency to report observed misconduct – 83%, compared to 58% in weaker cultures. Additionally, for those companies who have not implemented an E&C program, only 34% of employees observing misconduct reported it and only 20% of those reporting it felt satisfied with the outcome.

However, even if the program implementation is at the “minimum” level, 79% of employees observing misconduct reported it with 74% of those reporting the misconduct being satisfied with the outcome. In those companies with high-quality program implementation, 93% of employees seeing misconduct reported it with 94% of those reporting satisfied with the outcome of their reporting.

These findings absolutely reinforce the concept that it is employees feeling valued, respected and expected by the company to provide feedback when they observe misconduct, without being retaliated against, that outline the true hallmarks of an ethical corporate culture.

According to Patricia Harned, CEO of ECI, “This report makes the case that when it comes to ethics & compliance programs, every effort by an organization makes a difference … Yet program quality matters – the higher the quality, the bigger the ROI for the organization.” 

In 2013, ECI convened an independent panel of experts to develop the 5 Principles of a High-Quality E&C Program (HQP).  Since its release, hundreds of E&C practitioners have been trained using these principles which can be found on their resource site. 

This report clearly points out “that as the quality and strength of ethics and compliance programs increase, organizations see improvements in several key performance areas: the establishment of a stronger, more resilient culture, and significant decrease in misconduct.” ECI also “found that adhering to any of the 15 operational standards of HQP resulted in dramatic return on investment. In organizations where HQP objectives are present, employees demonstrated a tenfold increase in confidence and trust in the organization.” 

One of their clients, Ellen Martin, Vice President of Ethics and Business Conduct, The Boeing Company says, “Across business, leaders have the responsibility to develop and support high quality ethics programs to help reduce risk and drive organizational success.”

As I’ve mentioned before, if you surveyed most CEO’s, they would cite ethics and integrity as being qualities necessary to an organization’s wellbeing and as critical leadership traits. Kouzes and Posner’s seminal work, The Leadership Challenge, mentioned in a previous post, points out that honesty is the #1 trait follower’s demand in their leaders. In fact, ethical behavior is the foundation upon which a company’s culture must be built.

So many of us are asking, “Where do we go from here?”  

“The answer to this question is not only to focus on what people sometimes do wrong, but also to consider how we can help each other do right.  We need to begin a conversation about respect as a core value in our workplaces so that our employees have a shared understanding about how they should treat one another. Respect as a standard also provides a common language to help individuals raise and resolve sensitive concerns.” 

There is no question that truly ethical companies value and respect employee feedback, which is why employees of ethical companies feel valued and empowered to provide management feedback on what needs to be changed to improve the company and meet its customer’s needs.

We can’t stop there. We still have a long way to go. As Joyce E.A. Russell, Director of the Executive Coaching and Leadership Development program at Maryland’s Robert H. Smith School of Business, says, “there is still work to be done.” Ms. Russell continues, “Since leaders are “watched” 24/7 both on and off the job, it is imperative that they continue to set a good ethical example and reward others who do the same. Only then will we have companies that truly embody an ethical workplace.”

 

(Graphics used with permission of the Ethics & Compliance Initiative, 2650 Park Tower Dr, Vienna, VA 22180)

Boards Must Take Responsibility!
Real News- Ethics and Eloquence!

Ethics on your mind? Subscribe to my ezine to get my latest article delivered right to your inbox. Click Here to Subscribe

Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

Related Posts

  • TRUST Matters! How to Build a Tier One Organization…TRUST Matters! How to Build a Tier One Organization…
  • Moments of Truth:  Building Values Based CulturesMoments of Truth:  Building Values Based Cultures
  • Boards Must Take Responsibility!Boards Must Take Responsibility!
  • Ethics: The Road to ProfitsEthics: The Road to Profits

What People Are Saying About Richard M. Bowen

William D. Cohan"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author
2017-06-30T10:08:59+00:00
"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
https://www.richardmbowen.com/testimonials/2556/

Eileen McDonnell"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger."

~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
2015-02-13T19:51:19+00:00
"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger." ~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
https://www.richardmbowen.com/testimonials/711/

Ben Stein"Richard Bowen, you are a star and a hero."

~ Ben Stein, Economist and Political Commentator
2015-02-13T19:50:26+00:00
"Richard Bowen, you are a star and a hero." ~ Ben Stein, Economist and Political Commentator
https://www.richardmbowen.com/testimonials/712/

Jim Farrell"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership."

~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
2014-12-28T19:48:17+00:00
"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
https://www.richardmbowen.com/testimonials/532/

Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
2014-12-28T19:48:06+00:00
"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
https://www.richardmbowen.com/testimonials/533/

Betty Garrett"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!"

~ Betty Garrett, Garrett Speakers International
2014-12-28T19:47:50+00:00
"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
https://www.richardmbowen.com/testimonials/531/

fred-timmons"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

~ Fred Timmons, Chairman of The Texas Society of CPA's
2014-12-28T19:47:22+00:00
"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
https://www.richardmbowen.com/testimonials/530/

Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

Want to Hire Richard?

Watch Richard

See What Clients are Saying

About Richard

Recent Posts

  • Warmest thoughts and best wishes for a wonderful and safe holiday
  • Thanksgiving 2020
  • Pausing For A While
  • The world is in crisis
  • Relationships Count

Categories

  • Business Ethics
  • Congress
  • Corporate Debt
  • Corruption
  • Ethical Leadership
  • Financial Crime
  • Financial Crisis
  • Financial Crisis of 2008
  • Holiday
  • International
  • Mortgage Lending
  • Mortgage Meltdown
  • Relationships
  • Texas Politics
  • The Fed
  • Too Big To Fail
  • Uncategorized
  • Updates
  • Wall Street
  • Whistle Blowers

About Richard

Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

Read more

Connect with Richard

  Facebook   Twitter   Linked   Google Plus   YouTube

Contact Us

Phone: +1-214-604-5492

Email: Richard@RichardMBowen.com

Contact Richard
Google+

Copyright 2019© 2021 · Richard M. Bowen | ALL RIGHTS RESERVED.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.

Necessary Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

X
Sign up to receive my blog posts via email!
Subscribe >>