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Ethics and conduct risks now more on board agendas

Nov 30 2018

The Institute of Directors says it’s no surprise that a third of New Zealanders do not speak up about misconduct at work.

Commenting on the first Ethics at Work report into New Zealand workplaces, the IoD said the most common reasons 34% of New Zealand employees did not raise their concerns, was the feeling they might jeopardise their job. Or they thought nothing would be done about it anyway.

While 65% of people spoke up, 34% did not.

The Ethics at Work report, released on 28 November by the Institute of Business Ethics and Victoria University, investigated ethical culture, risks, standards and conduct at work places in New Zealand, United Kingdom and Australia.

IoD’s chief executive Kirsten Patterson said organisations needed people’s trust in order to be successful, and it was encouraging to see such a comprehensive Ethics at Work investigation into New Zealand workplaces.

 “Boards set the tone for healthy organisation culture. They have a key role leading and overseeing cultural ethics and ethical conduct,” Kirsten Patterson said. “Directors must ensure that their organisation has a ‘Speak Up’ culture where employees are not afraid to raise issues.

“If doubts exist about the ethics of a business or there are questions about the way it treats people, it will eventually have a negative impact.”

 IoD’s own temperature check on the pulse of New Zealand governance, the Director Sentiment Survey 2018, released early in November, found senior management was doing more reporting to board directors about ethical matters and conduct. This year 55% of boards assessed ethics risks, compared to 44% two years ago in 2016.

Forty-four percent of boards this year were also discussing ‘Speak Up’ arrangements for staff at work, an upwards trend compared to the 32% of boards discussing whistleblowing last year in 2017.

“That upward trend is very pleasing. It’s important boards get timely and comprehensive advice on ethical matters, and also about incidents involving risks around conduct” Kirsten Patterson said. “Unethical conduct might be fraud, corruption, bribery, sexual harassment, or other behaviours potentially damaging for an organisation’s reputation.

A real positive from the Ethics at Work survey was that, of the 792 New Zealand employees surveyed, 86% believed their organisation acted with honesty. In Australia 84% of employees said their organisation acted with honesty, while 81% of employees said the same in the United Kingdom.