Boards fall short on ethics issues.

DURING THE LAST 12 months, boards of directors have stepped up efforts to address ethics and compliance issues, according to a recent survey of ethics, human resources, and legal officers participating in The Conference Board's 2003 Ethics Conference. However, more than half of survey respondents

"Although board involvement in governance has increased dramatically in the past year, this [research] is a clear indicator that ethics officers, boards, and executives need to strive for higher levels of ethical leadership and accountability," noted Steve Priest, founder of the Ethical Leadership Group, the business ethics consulting firm that conducted the survey. Indeed, 29 percent of respondents reported that senior management represented the weakest link in terms of their company's ethics and compliance efforts, while 17 percent cited the chief executive officer.

According to the survey, the percentage of firms offering a toll-free hotline for employees to report concerns actually fell from 82 percent in 2002 to 75 percent this year. However, about half of those polled reported that their organization has a "culture of dissent," where people can speak their minds without fear of retaliation. Still, 95 percent of participants indicated that fear of retaliation for reporting violations is an issue within their corporate culture.

Despite these fears, reporting of misconduct by employees has increased steadily during the past several years, according to a related ethics survey of 1,500 U.S. professionals, conducted by the Ethics Resource Center (ERC), a nonprofit education and research organization. The center's "2003 National Business Ethics Survey" focuses on issues such as the prevalence of formal ethics programs, pressures to compromise ethics standards, and ethics practices of executives, supervisors, and coworkers.

The study found that misconduct and pressure to compromise ethical standards are strongly related to the actions of top management, supervisors, and coworkers. The research also suggests that formal ethics programs--including written standards of conduct, ethics training, ethics advice lines or offices, and systems for anonymous reporting of misconduct--help reduce ethics violations and pressure to compromise ethics.

For a copy of The Conference Board's survey, contact courter@conference-board.org. Findings from the "2003 National Business Ethics Survey" are available on the ERC's Web site, www.ethics.org.