Many variables, such as generational gaps and weak management policies, can add or subtract from the benefits, as one survey suggests

In a survey of 8,526 full-time employees, spanning individual contributors to the C-suite across 13 industries and 15 countries* on the correlations between company culture, employee misconduct and corporate risks, some findings and trends were disclosed from the data.

First, 23% of respondents from around the world agreed to prompts that it was “OK to break the rules if needed to get the job done”; 14% indicated they had within the past year “engaged in behavior that violated their company’s Code of Conduct or standards.”.

Second, 22% of Gen Z respondents indicated they had engaged in unethical conduct in the past year in the workplace, compared with 9% of Boomers. The could indicate an inverse trend between mindset and age when workers contemplated breaking the rules. 

Other findings
Third, respondents from firms with strong ethical cultures had lower rates of observed misconduct, and reported their observation at a rate 1.5x higher than those in firms with weak cultures (93% compared to 63%). Fourth, 33% of respondents indicated they had observed misconduct or unethical behavior in the past year, with harassment, discrimination, conflicts of interest, and employee health and safety violations cited most frequently. Of those, 21% did not report their observation because they did not think their firm would do anything about their concern (36%) or could handle it effectively (30%), or because they feared retaliation (36%). Also:

Fourth, 33% of respondents indicated they had observed misconduct or unethical behavior in the past year, with harassment, discrimination, conflicts of interest, and employee health and safety violations cited most frequently. Of those, 21% did not report their observation because they did not think their firm would do anything about their concern (36%) or could handle it effectively (30%), or because they feared retaliation (36%). Also:

    • Respondents in firms with strong ethical cultures outperformed, by an average of around 50% more than those with weak ethical cultures, on a variety of traditional business metrics including customer satisfaction, employee loyalty, competitiveness, innovation, and adaptability. The performance gap was most pronounced when linked to a firm’s ability to adapt quickly to internal and external change (a critical determinant of resilience): the adaptability of firms with strong ethical cultures was rated 2.6x higher than those with weak ethical cultures. Respondents from such firms also outperformed on business results and innovation at a rate of 2.3x and 2.2x higher.
    • 79% of respondents who had observed misconduct had reported their observation, with most raising their concern to either their direct manager or another manager in the company (77% combined).
    • Of all ethical culture measures, psychological safety was the greatest predictor of whether respondents would report misconduct they had observed.
    • Respondents who were Executives and Senior Leaders were 2.6x more likely to indicate their firm had a strong ethical culture than individual contributors and front-line employees.
    • Outside of major factors such as compensation, title, or job responsibilities, ethical culture explained 41% of the respondents’ variation in willingness to stay at their organization.

According to Ty Francis, Chief Advisory Officer, LRN, the firm the commissioned the survey, the data has shown “a clear and encouraging emphasis on reducing misconduct, with the majority of respondents able and willing to report instances of wrongdoing. Although this result is positive, it’s also clear that there are several realities organizations need to address, from an evident lack of trust in the system of procedural justice, and a worrying proportion of individuals — particularly among Gen Z — not averse to rule-breaking. The generational divide in attitudes towards unethical conduct also needs consideration and attention, with emphasis on the importance of ethical conduct at all levels of an organization, from CEO to trainee.”

*Australia (3%), Brazil (6%), Canada (11%), China (6%), France (6%), Germany (6%), India (6%), Japan (6%), Mexico (6%), the Netherlands (3%), Poland (3%), Singapore (6%), Sweden (3%), the UK (8%) and the US (23%).