Ethics

    The letter from well-known New York attorney Marc Dreier to the Judge regarding his sentencing is illuminating. Dreier committed fraud of nearly $400 million and this week was recommended by the government to receive a sentence of 145 years behind bars. The good news is that he wrote this letter explaining how his ponzi scheme started and ultimately ended when he was caught red-handed. At least Dreier provided a window into why someone would harm so many people and ruin so many lives only to be recognized more. He says he felt that he was not receiving the recognition and financial rewards that he deserved at age 40. Dreier said he wanted to make the letter available to all so that others might learn from it. The letter might provide some insight into why Bernie Madoff did what he did. Madoff must have suffered from the same disease of needing to prove that he was more than he was. Sadly, Dreier's letter is an example of the downside of reputation building. Reputation is earned. Reputation at any cost is deadly. Reputation without merit is a falsehood.

    I recently Twittered about this survey since I thought it had some excellent information. The research comes from Deloitte LLP and is their 2009 Ethics & Workplace Survey. The topic this year was social networking and reputational risk in the workplace. Timely.  Since we conducted our survey on how executives manage their reputations online, Deloitte’s survey added some nuances that we did not cover. Deloitte had Opinion Research survey 2000+ employees and 500 executives in the U.S.  Here are some of the more interesting facts that caught my eye.

Employees

• 74% of employees believe that it is easy to damage a corporate reputation through social media (That’s high awareness for sure)
• 24% say they don’t know if their company has a social media policy and 11% say their company has one but they don’t know what it is about.
• 49% say that they would not change their online behavior if their company had a corporate social media policy (the survey also found that 29% of employees were being a bit more careful about what  they did online in insure that they kept their jobs in these tough economic times)
• Somewhat more than one third said that they rarely or never think about their boss, colleagues or clients when participating online (I’d call that risky)
• 26% say that their company does not allow them on certain social networking sites during work hours (I hear that often when traveling in Europe and was initially surprised. But there seems to be a large enough portion of the workforce that has no access to certain of these sites.)

Executives

• Only 15% of executives are addressing risks from social media at the board level
• Only 17% say that their companies have management systems in place to identify online social media risks (Not good news)
• Only 22% say that their company has formal social media policies and guidelines in place for employees (This is increasingly important as the FTC becomes more involved with social media and begins thinking about changing rules.)
• 67% of executives say that their company does not discuss how to use social media to leverage their strengths or mitigate risks (That’s an awfully high percentage. This is risky in itself!)

 

 

  Not sure it means anything but we thought we’d take a look at whether there are more scorecards/rankings now vs. one year ago. We keep this large, complex and detailed database on which awards exist for companies seeking to be recognized as being the most responsible, best at diversity, most ethical, best leadership, best reputation, best training, etc.  The database looks at when applications are due, when they are announced, who fills out the surveys, how to apply, how popular the ranking  is, etc.  You get it.  The database, called Scoreboxx™, helps companies “credentialize” themselves and communicate how they lead the industry.  It is part of our reputation-building services.

 

Since we realized it would be next to impossible to determine if there has been a change in the number of scorecards year over year since many scorecards just disappear or just get added randomly, we took a look at response rates to some of the rankings in 2007 vs. 2008. Not a scientific analysis but interesting nevertheless.  Listed below is our brief analysis of some of them for what’s worth.

 

Some are up and some are down. Some are flat. Here is what Liz, my colleague, and I think. For those awards where recruiting or talent  are important, higher responses have been recorded year over year. More employers returned surveys for BusinessWeek’s Best Places to Launch a Career and Fortune’s Top 100 MBA Employers, more applications were received this year for DiversityInc Top 50 and more nominations came in for the World’s Most Ethical Companies.  It goes without saying that the lower number of respondents for BusinessWeek’s Most Innovative Companies means nothing since this has been a disruptive year for business and some executives were just holding your breath that they were not getting pink slips. And presumably many did.

 

				Chg vs. prior year
List	2007	2008	2009
BusinessWeek Best Places to Launch a Career				flat
Career directors	63	60	(will be out in Sept)
Employers	95	119		á
BusinessWeek Customer Service Champs		>1,000 readers	>1,000 readers	flat
BusinessWeek Most Innovative Companies		2,950 execs	2,700 execs	â
DiversityInc Top 50 Companies for Diversity		352 applications	401 applications	á
Ethisphere World's Most Ethical Companies			"…received a record # of company nominations…" (no data)	á
Fortune Best Companies to Work For		100,000 employees (246/company)	~81,000 employees (229/company)	â
Fortune Top 100 MBA Employers		5,769 MBA candidates	6,207 MBA candidates	á
Harris Interactive Reputation Quotient		7,105 consumers	6,587 consumers	â
Reputation Institute Global Pulse		>60,000 consumers	>70,000 consumers	á

  

What does seem interesting is that in a world where companies have stumbled catastrophically and reputational equity has been slipping away, the focus on talent, diversity and ethics might be a good sign of better things to come.

I should have mentioned that I received wonderful news that I am very proud of. I do not know if there is protocol for "tooting one's horn." But the greater part of this plug is for the work done by Ethisphere. The organization has been mentioned before on my blog when I described their new coalition BELA. Check it out because companies should consider being regularly audited on their ethical compliance to help restore trust in business. I was included in their 2008 Most Influential People in Business Ethics and part of the description as to why has to do with some of the topics I review on this blog. This made me quite happy in these mostly down times. A good start to the new year does not hurt. Thanks for reading.

The Financial Times recently had two great articles that were totally meant for me.  They are related to reputation and I was very encouraged. Amazing what I find exciting. First, I learned that 17 companies are working with the Ethisphere Institute to commit to key principles to rebuild trust in corporate behavior. The principles that these well-known companies (GE, Wal-Mart, PepsiCo, Dell, Accenture) are signing on for include legal compliance, transparency, avoiding conflict of interests and accountability. The voluntary initiative is called the Business Ethics Leadership Alliance and their mission is to reinforce the standards of ethics and fortify confidence in business worldwide.   part of the agreement, the companies have to submit to regular independent audits. Ethisphere’s own reputation has grown rapidly in recent years and getting on their list of the most ethical companies is quite a feat.  Their standards are quite rigorous. I think this is a step in the right direction for building corporate credibility in corporate America and good to see that there is agreement that reputations are repairable.  Second, I learned that Morgan Stanley and Merrill Lynch top executives are rejecting bonuses this year. That too is a wise move. What fascinated me, however, was the following edit from Morgan Stanley which was reported in the FT: “Morgan Stanley also became the first large US bank to announce that employees would be forced to pay back some of their bonuses if they caused significant losses, or reputational harm, to the company.”  Reputational harm deserves more than returning a bonus…in some cases it should mean cause for losing a job. Bonuses are easily redeemable, reputation is not.