This study investigated effects of codes of ethics on perceptions of ethical behavior. Respondents from companies with codes of ethics (n = 465) rated role set members (top management, supervisors, peers, subordinates, self) as more ethical and felt more encouraged and supported for ethical behavior than respondents from companies without codes (n = 301). Key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of ethical problems were impacted by (...) the presence of an ethics code. The mere presence of a code of ethics appears to have a positive impact on perceptions of ethical behavior in organizations, even when respondents cannot recall specific content of the code. (shrink)

This paper compares the findings of content analyses of the corporate codes of ethics of Canada's largest corporations in 1992 and 2003. For both years, a modified version of a technique used in several other studies was used to determine and categorize the contents of the codes. It was found, inter alia, that, in 2003, as in 1992, more of the codes were concerned with conduct against the firm than with conduct on behalf of the firm. Among the changes from (...) 1992 to 2003 were a significant increase in the frequency of mention of environmental affairs, legal responsibility as the basis of codes and enforcement/compliance procedures. (shrink)

This empirical study of Fortune 1000 firms assesses the degree to which those firms have adopted various practices associated with corporate ethics programs. The study examines the following aspects of formalized corporate ethics activity: ethics-oriented policy statements; formalization of management responsibilities for ethics; free-standing ethics offices; ethics and compliance telephone reporting/advice systems; top management and departmental involvement in ethics activities; usage of ethics training and other ethics awareness activities; investigatory functions; and evaluation of ethics program activities. Results show a high (...) degree of corporate adoption of ethics policies, but wide variability in the extent to which these policies are implemented by various supporting structures and managerial activities. In effect, the vast majority of firms have committed to the low cost, possibly symbolic side of ethics management (e.g., adoption of ethics codes and policies, etc.). But firms differ substantially in their efforts to see that those policies or codes actually are put into practice. (shrink)

Codes of ethics are being increasingly adopted in organizations worldwide, yet their effects on employee perceptions and behavior have not been thoroughly addressed. This study used a sample of 613 management accountants drawn from the United States to study the relationship between corporate and professional codes of ethics and employee attitudes and behaviors. The presence of corporate codes of ethics was associated with less perceived wrongdoing in organizations, but not with an increased propensity to report observed unethical behavior. Further, organizations (...) that adopted formal codes of ethics exhibited value orientations that went beyond financial performance to include responsibility to the commonweal. In contrast to corporate codes of ethics, professional codes of ethical conduct had no influence on perceived wrongdoing in organization nor these codes affect the propensity to report observed unethical activities. (shrink)

This paper compares the findings of content analyses of the corporate codes of ethics of Canada’s largest corporations in 1992 and 2003. For both years, a modified version of a technique used in several other studies was used to determine and categorize the contents of the codes. It was found, inter alia, that, in 2003, as in 1992, more of the codes were concerned with conduct against the firm than with conduct on behalf of the firm. Among the changes from (...) 1992 to 2003 were a significant increase in the frequency of mention of environmental affairs, legal responsibility as the basis of codes and enforcement/compliance procedures. (shrink)

A study was conducted in order to examine the relationship between corporate codes of ethics and behaviour. Fifty-seven interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The study found that codes of ethics are a potential factor influencing the behaviour of corporate agents. Reasons are provided why codes are violated as well as complied with. A set of eight metaphors are developed which help to explain how codes of ethics influence behaviour.

Research on whistle-blowing has been hampered by a lack of a sound theoretical base. In this paper, we draw upon existing theories of motivation and power relationships to propose a model of the whistle-blowing process. This model focuses on decisions made by organization members who believe they have evidence of organizational wrongdoing, and the reactions of organization authorities. Based on a review of the sparse empirical literature, we suggest variables that may affect both the members' decisions and the organization's responses.

When successful and ethical managers are alerted to possible organizational wrongdoing, they take corrective action before the problems become crises. However, recent research [e. g., Rynes et al. (2007, Academy of Management Journal 50(5), 987-1008)] indi cates that many organizations fail to implement evidence-based practices (i. e., practices that are consistent with research findings), in many aspects of human resource management. In this paper, we draw from years of research on whistle-blowing by social scientists and legal scholars and offer concrete (...) suggestions to managers who are interested in encouraging internal reporting of problems requiring attention, and to observers of questionable activity who are considering reporting it. We also identify ways that research suggests policy-makers can have a more positive influence. We hope that these suggestions will help foster evidence-based practice regarding whistle-blowing. (shrink)

When successful and ethical managers are alerted to possible organizational wrongdoing, they take corrective action before the problems become crises. However, recent research [e.g., Rynes et al. (2007, Academy of Management Journal50(5), 987–1008)] indicates that many organizations fail to implement evidence-based practices (i.e., practices that are consistent with research findings), in many aspects of human resource management. In this paper, we draw from years of research on whistle-blowing by social scientists and legal scholars and offer concrete suggestions to managers who (...) are interested in encouraging internal reporting of problems requiring attention, and to observers of questionable activity who are considering reporting it. We also identify ways that research suggests policy-makers can have a more positive influence. We hope that these suggestions will help foster evidence-based practice regarding whistle-blowing. (shrink)

Whistleblowing on organizational wrongdoing is becoming increasingly prevalent. What aspects of the person, the context, and the transgression relate to whistleblowing intentions and to actual whistleblowing on corporate wrongdoing? Which aspects relate to retaliation against whistleblowers? Can we draw conclusions about the whistleblowing process by assessing whistleblowing intentions? Meta-analytic examination of 193 correlations obtained from 26 samples (N = 18,781) reveals differences in the correlates of whistleblowing intentions and actions. Stronger relationships were found between personal, contextual, and wrongdoing characteristics and (...) whistleblowing intent than with actual whistleblowing. Retaliation might best be predicted using contextual variables. Implications for research and practice are discussed. (shrink)

A review of ethical literature demonstrates that the materialpresented to date is largely based upon theoretical and empiricalresearch. While this information has contributory value, theinformation produced is largely observational rather thanpractical. Managers are anxious to receive assistance with themechanisms by which ethics can be integrated into theirorganisations. Utilising the recent experience of the authorwith a large utility company in Asia committed to developing an ethical programme to enhance ethical awareness in theirorganisation, this paper intends to review current systems andprocedures available (...) to managers for integrating ethics intobusiness. In addition to reviewing mechanisms for promoting anethical climate, where appropriate, reference will be made toprior research and specific organisations where these practiceshave been used successfully.The paper concludes with a set of summary recommendations formanagers embarking on the introduction of an ethical programme totheir organisation. (shrink)

Recent years have featured a spate of regulatory action pertaining to the development and/or disclosure of corporate governance structures in response to financial scandals resulting in part from governance failures. During the same period, corporate governance activists and institutional investors increasingly have called for increased voluntary governance disclosure. Despite this attention, there have been relatively few comprehensive studies of governance disclosure practices and response to the regulation. In this study, we examine a sample of 50 U.S. firms and their public (...) disclosure packages from 2004. We find a high degree of variability in the presentation and reporting format choices for many elements of the governance structure. This variability includes several items for which disclosure is mandated by regulators or legislative action. In particular, smaller firms offer fewer disclosures pertaining to independence, board selection procedures, and oversight of management (including whistleblowing procedures). There are also trends associated with board characteristics: boards that are less independent offer fewer disclosures of independence and management oversight matters. Moreover, large firms provide more disclosures of independence standards, board selection procedures, audit committee matters, management control systems, other committee matters, and whistleblowing procedures but do not appear to have a strictly superior information environment when compared to smaller firms. The findings raise questions about compliance with regulatory requirements and the degree to which conflicts of interest between managers and directors are being controlled. While there have been notable improvements in the information environment of governance disclosures, there remain structural issues that may possess negative ramifications for stakeholders. (shrink)

Since the introduction of the U.S. Sarbanes-Oxley Act in 2002 and several other national corporate governance codes, whistleblowing policies have been implemented in a growing number of companies. Existing research indicates that this type of governance codes has a limited direct effect on ethical or whistleblowing behaviour whereas whistleblowing policies at the corporate level seem to be more effective. Therefore, evidence on the impact of (inter)national corporate governance codes on the content of corporate whistleblowing policies is important to understand their (...) indirect impact on whistleblowing behaviour. This study analyzes the contents of whistleblowing policies, and parts of corporate codes of conduct and codes of ethics, describing such policies of 56 leading European companies. By classifying the contents in seven categories, an exploratory framework was created. General contents often identified were: applicability to all employees, a group-wide scope and an authoritative tone. The most common general violations to report were breaches of internal policies and external regulations or laws. The more specific violations most frequently mentioned were criminal offences and dangers to health and safety or the environment. Contacts to report to were the direct or indirect supervisors, a compliance officer or a confidential "hotline" facility. A confidentiality guarantee was common and anonymous reporting was often possible, though sometimes discouraged. Protection against retaliation is stated by ensuring that retaliation will not happen, prohibiting it or making it punishable. The requirement of good faith was frequently given. Finally, investigation of the report was often guaranteed. Surprisingly little information is given on the treatment of whistleblowers reporting an unfounded complaint in good faith, or reporting a violation they were involved in. The study's findings are most relevant to companies without a whistleblowing policy or those that intend to benchmark their policies, and to pan-European standard setters. (shrink)

Since the introduction of the U.S. Sarbanes-Oxley Act in 2002 and several other national corporate governance codes, whistleblowing policies have been implemented in a growing number of companies. Existing research indicates that this type of governance codes has a limited direct effect on ethical or whistleblowing behaviour whereas whistleblowing policies at the corporate level seem to be more effective. Therefore, evidence on the impact of (inter)national corporate governance codes on the content of corporate whistleblowing policies is important to understand their (...) indirect impact on whistleblowing behaviour. This study analyzes the contents of whistleblowing policies, and parts of corporate codes of conduct and codes of ethics, describing such policies of 56 leading European companies. By classifying the contents in seven categories, an exploratory framework was created. General contents often identified were: applicability to all employees, a group-wide scope and an authoritative tone. The most common general violations to report were breaches of internal policies and external regulations or laws. The more specific violations most frequently mentioned were criminal offences and dangers to health and safety or the environment. Contacts to report to were the direct or indirect supervisors, a compliance officer or a confidential “hotline” facility. A confidentiality guarantee was common and anonymous reporting was often possible, though sometimes discouraged. Protection against retaliation is stated by ensuring that retaliation will not happen, prohibiting it or making it punishable. The requirement of good faith was frequently given. Finally, investigation of the report was often guaranteed. Surprisingly little information is given on the treatment of whistleblowers reporting an unfounded complaint in good faith, or reporting a violation they were involved in. The study’s findings are most relevant to companies without a whistleblowing policy or those that intend to benchmark their policies, and to pan-European standard setters. (shrink)

This empirical study explores the characteristics and degree of implementation of so-called ethics hotlines in transnational companies (TNCs), which allow employees to present allegations of wrongdoing and ethical dilemmas, as well as to report concerns. Ethics hotlines have not received much attention in literature; therefore, this paper aims to fill that gap. Through the analysis of conduct/ethics codes and the compliance programs of the top 150 transnational companies ranked by the United Nations Conference on Trade and Development (UNCTAD) ( 2007 (...) ), we carry out a descriptive and taxonomic study of these companies’ ethics hotlines. We analyze: (1) the basic characteristics of the mechanism, (2) the degree of exigency and the provision of safeguards, (3) the matters reported and the systems for reporting, and (4) the relationships between hotlines and economic characteristics of the firm. Our study compares financial and nonfinancial TNCs as well as North American and European TNCs. Our results show that many firms (especially from North America) have established these procedures. We also find some disparities between European and North American ethics hotlines that suggest differences in the orientation of the procedures. (shrink)

Whistleblowers have usually been treated as outcasts by private-sector employers. But legal, ethical, and practical considerations increasingly compel companies to encourage employees to disclose suspected illegal and/or unethical activities throughinternal communication channels. Internal disclosure policies/procedures (IDPP''s) have been recommended as one way to encourage such communication.This study examined the relationship between IDPP''s and employee whistleblowing among private-sector employers. Almost 300 human resources executives provided data concerning their organizations'' experiences.

This paper briefly examines the topic of business ethics and attempts to suggest a code of ethics for multinational firms. While most companies have basic policies on employee integrity, confidentiality and sexual harassment, relatively few have established policies regarding bribery, exploitive child labor, human rights violations and other issues they may encounter in the global market place (Drake, 1998). Until recently, very few companies had truly global operations. Consequently little attention was paid to the issue of ethical guidelines in a (...) global context. Recent changes in international markets have led to an explosion of corporations with global operations, and the need for a global code of ethics has grown commensurately. In this paper we explore the issue of global business ethics and attempt to provide a framework for future discussion. We also examine some of the unique difficulties surrounding the development of any set of global business standards. Key among these difficulties is the issue of competing ethical values in home and host countries. (shrink)