Management... Ethical misconduct is getting worse

While nonprofits, for the most part, still have an ethical edge on jobs in business and government, the social sector isn’t too far ahead.
The Ethics Resource Center published its findings in the National Nonprofit Ethics Survey to give an inside look at the sector’s code of ethics. But, the view isn’t pretty.
The Ethics Resource Center interviewed 3,452 employees spanning the three sectors, with 558 respondents from nonprofits, and polled them on issues such as misconduct, ethics and violations in the workplace.

Nonprofit employees reported observing the highest levels of misconduct since the survey started in 2000 with 55 percent of employees saying they witnessed a form of misconduct in the past year. That level is on par with business (56 percent) and government (57 percent).

Financial misconduct was also reported among nonprofits and eight percent admitted that they saw financial fraud – compared to the 5 percent of employees in the business sector.

Misconduct included putting own interests ahead of the organization (21 percent), abusive behavior (19 percent) and misreporting working hours (19 percent).

Approximately 38 percent of employees who observed misconduct chose not to report to management, with top reasons including doubts that anything would change and fear of retaliation. Employees were least likely to report environmental violations, the misuse of confidential information and Internet abuses.

Strong management made a difference – but in a negative way. Nonprofit employees felt that top management set the ethical tone more than their business and government counterparts.

And those organizations with a board of directors are 18 percent less likely to think that the organization has strong leadership compared to organizations that have an executive director or president at the top. Employees that had a board of directors generally had less trust in the management and their accountability.

The survey showed that an ethics risk was greatly reduced when organization leaders established an organization-wide ethics and compliance program. The Ethics Resource Center recommended that organizations assess themselves and cultivate a working environment that will address misconduct.