Global Ethics Day: Most employees say they don’t work in an ethical culture

This despite increased local and international efforts to promote ethical business practices, and proposed reforms to South Africa’s whistleblower legislation in the wake of the Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector (better known as the Zondo Commission).

“Workplace misconduct is at an all-time high,” says Viola Sigauke, project director: Ethics Standards at Saica, quoting the latest Global Business Ethics Survey published in August 2024 by the Ethics and Compliance Initiative (ECI).

“Observed misconduct is at concerning levels, with a global median of 65% of employees reporting that they observed misconduct within the past 12 months. Few employees say they work in an ethical environment.”

Steps being taken are inadequate

According to Sigauke, businesses are clearly not taking the steps that are proven to significantly reduce their exposure to unethical workplace practices.
“Less than half of employees surveyed indicated that their organisation has taken steps to implement the most basic elements of a high-quality ethics and compliance (E & C) programme,” she states.

Over 75,000 employees from 42 countries, including African nations, participated in the latest ECI study. Among the other findings:

• Just over one in 10 employees globally say there is a strong ethical culture in their workplace.
  
• 19% of employees observed misconduct being covered up or remaining uncorrected.
  
• 56% of those employees who witnessed a coverup, or no action being taken, did not report their observation.

South Africa has, of course, had its fair share of high-profile corporate ethics failures. Among recent examples are the collapse of Steinhoff International and the VBS Mutual Bank liquidation.

“Ethical leadership is currently facing challenges both globally and locally due to a combination of competitive pressures, normalisation of misconduct, weak regulatory enforcement, and societal influences,” explains Soopal.

“In South Africa, factors like political instability, corruption, and economic inequality play a significant role. Globally, the emphasis on short-term gains and a culture that sometimes rewards unethical behaviour contribute to the decline of ethical leadership.”

Saica has its own Ethics Committee and Integrated Ethics Plan that supports the institute to ensure that it tracks and monitors emerging ethics related risks, develop products for member overcome ethical challenges experienced and to ensure that the profession adheres to global ethics standards. The institute also presents a series of Saica Edge webinars on ethics and integrity.

In a recent webinar, Cynthia Stimpel, executive director of whistleblower advocacy and support group Whistleblower House, emphasised the importance of whistleblowers in the ethics process. But she warned that SA lacks adequate legislative protection for whistleblowers.

“While the Protected Disclosures Act (PDA) aims to protect whistleblowers in South Africa, significant challenges remain in its implementation and enforcement,” says Sigauke.

“The lack of awareness, inadequate training, cultural barriers, legal limitations, and a lack of accountability contribute to an environment where employees may be discouraged from speaking out.” Saica also recently made submission to the Department of Justice and Constitutional Development on its discussion paper on proposed reforms for the whistleblower protection regime in South Africa.

What to do next

What can be done to enhance ethical behaviour in South African workplaces? The Global Business Ethics Survey stresses that leaders have the power to drive positive change. Among its suggestions:

• Take the teachable moment. When grey areas arise, take the opportunity to clarify what values-based behaviour looks like and steer others away from ethical failings.
  
• Communicate deliberately and regularly with those who report ethical breaches. This will ensure that the process is and feels fair, to protect against actual and perceived retaliation, and to reinforce that the reporter’s action made a difference.
  
• Take action and share the results. When misconduct has been uncovered and addressed, share anonymised versions of cases to communicate that actions have consequences, both the negative repercussions of violations and the positive impact of speaking up.

Says Sigauke: “Enforcing greater accountability in ethical leadership requires a mixed approach that includes establishing clear ethical standards, providing leadership training, fostering a culture of transparency, implementing accountability mechanisms, and promoting stakeholder engagement.

“Organisations must also ensure that consequences for unethical behaviour are enforced and that leaders model the ethical conduct they wish to see. By taking these steps, organisations can create an environment where ethical leadership thrives, ultimately enhancing their integrity and reputation in the long term.”

Saica encourages corporates and the public to promote and implement the theme for Global Ethics Day, Ethics Empowered – using the power of ethics to build a better world.