Survey: Workplace Misconduct at Historic Low

National Business Ethics Survey by Ethics Resource Center Reveals Decline in Workplace Misdeeds, Improvement in Ethics Culture in Past Six Years 

ARLINGTON, VA — FEBRUARY 4, 2014 — Research released today by the Ethics Resource Center (ERC), America’s oldest nonprofit advancing high ethical standards and practices in public and private institutions, reveals that workplace misconduct is at an historic low, having steadily and significantly declined since 2007.

The eighth National Business Ethics Survey (NBES) shows that 41 percent of more than 6,400 workers surveyed said they have observed misconduct on the job, down from 55 percent in 2007. In addition, the report found that fewer employees felt pressure to compromise their standards, down to nine percent from 13 percent in 2011.

Noted Michael G. Oxley, ERC Chairman of the Board, former Congressman and House co-sponsor of the Sarbanes-Oxley Act of 2002, “Companies are working harder to build strong cultures and implement increasingly sophisticated ethics and compliance programs. The results of the survey are encouraging and show that companies are doing a better job of holding workers accountable, imposing discipline for misconduct and letting it be known publicly that bad behavior will be punished.”

The continued decline in wrongdoing defied two factors that often accompany observed misconduct – retaliation and pressure to violate rules, which both rose two years ago in NBES 2011 and seemed to foreshadow an uptick in bad behavior. Historically, higher stock prices have been accompanied by higher rates of misconduct, presumably because workers and companies both were tempted to take more risks in order to enjoy the rising tides. The reverse was also true: In times of economic challenge, companies focused on ethics in order to weather the storm and misconduct declined accordingly.

“It seems likely that the severity of the recession and the relatively soft recovery have taken a toll on workers’ confidence and tempered risk-taking on the job,” said ERC President Patricia J. Harned, Ph.D. “A key question for the future is what happens to misconduct rates when economic growth becomes more robust and widespread. We found that when a company has a weak culture, it is more likely to have frequent incidents of misconduct vs. rogue incidents in a company that has a stronger culture.”

Pattern of Ongoing Misconduct

The survey shows that a significant amount of misconduct involves continuous, ongoing behavior rather than one-time incidents: Employees say that more than a quarter (26 percent) of observed misconduct represents an ongoing pattern of behavior. Another 41 percent said the behavior has been repeated at least a second time. Only one-third (33 percent) of rule breaking represents a one-time incident.

Most Misconduct Committed by Managers

Managers – those expected to act as role models or enforce discipline – are responsible for a large share of workplace misconduct (60 percent) and senior managers are more likely than lower-level managers to break rules. Surveyed employees said that members of management are responsible for six of every 10 instances of misconduct and they pointed the finger at senior managers in 24 percent of observed rule breaking. Middle managers were identified as the culprit 19 percent of the time and first-line supervisors were identified as bad actors 17 percent of the time.

Reporting and Retaliation

More than one in five workers (21 percent) who reported misconduct said they suffered from retribution as a result, nearly identical to the 22 percent retaliation rate in NBES 2011. Retaliation has not always been so widespread: The rate was only 12 percent in 2007, the first time it was measured in NBES. Asked why they kept quiet about misconduct, more than one-third (34 percent) of those who declined to report said they feared payback from senior leadership. Thirty percent worried about retaliation from a supervisor, and 24 percent said their co-workers might react against them.

Furthermore, among those who did choose to report, those who experienced retaliation were less likely than those who did not experience retaliation to say they would report misconduct the next time they see it: 86 percent compared to 95 percent who say they would report.

Additional results of the 2013 NBES:

  • The percentage of companies with “strong” or “strong-leaning” ethics cultures climbed to 66 percent in 2013, compared to 60 percent in the previous survey.
  • The percentage of companies providing ethics training rose from 74 percent to 81 percent between 2011 and 2013.
  • Two-thirds of companies (67 percent) included ethical conduct as a performance measure in employee evaluations, up from 60 percent in 2011.
  • Almost three out of four companies (74 percent) communicated internally about disciplinary actions when wrongdoing occurs.
  • Extremely serious forms of misconduct such as falsifying company financial data and public reports or bribing public officials were observed less frequently in 2013: Three percent of employees said they were aware of misleading information on financial reports and two percent stated that they observed somebody in their company who had offered bribes to public officials.

First implemented in 1994, the NBES is the national benchmark on business ethics. Biennial since 2003, the eighth NBES surveyed 6,400 American workers ages 18 and older who work 20 or more hours a week in companies of two or more employees. The survey was conducted from September 30 to November 15, 2013 and has a sampling error of +/- 1.2 percent at the 95 percent confidence level.

The complete report can be downloaded free at

Upcoming NBES Reports to Further Explore Workplace Trends

Over the next several months, ERC will release a number of supplemental reports that take a closer look at the specific trends that impact workplace ethics. Upcoming report topics include ethical leadership, ethics culture and collective identity, accountability and fairness, reporting and whistleblower trends and ethics and large companies.

About the Ethics Resource Center

The Ethics Resource Center (ERC) is America’s oldest nonprofit organization devoted to independent research and the advancement of high ethical standards and practices in public and private institutions. Since 1922, ERC has been a resource for public and private institutions committed to a strong ethical culture. ERC’s expertise informs the public dialogue on ethics and ethical behavior. ERC researchers analyze current and emerging issues and produce new ideas and benchmarks that matter — for the public trust. Visit for more information.

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Job description

Listing Info Summary: The Compliance Director is responsible for ensuring, under the direction of the Chief Compliance Officer (CCO), that NORCAL Group remains in compliance with all applicable legal and regulatory requirements, its Code of Conduct, and other internal policies, by overseeing the identification of such requirements and the design and implementation of an appropriate framework of internal processes, controls, and procedures company-wide to address such requirements. Monitors which compliance functions are best accomplished on a distributed basis within the business units. Partners with business unit leaders to develop, document, and update the processes for these distributed compliance functions in a manner designed to optimize both compliance and efficiency in terms of the required staff resources and tools. Maintains appropriate oversight over the efficacy of the distributed compliance functions. Implements all necessary actions to ensure achievement of the objectives of an effective compliance program. Essential Functions: Individual must be able to perform each essential duty satisfactorily. The essential functions listed below are representative of the knowledge, skill, and/or ability required with or without reasonable accommodation.
  • Manages day-to-day operation of the compliance program.
  • Identifies the laws and regulations applicable to the NORCAL Group of companies and develops/implements a system for receiving appropriate updates. Evaluates and selects appropriate software tools to facilitate same. Oversees appropriate internal dissemination of regulatory and legal compliance developments throughout NORCAL Group.
  • Determines appropriate ownership, either within Compliance or within the business/operations units for identified compliance needs and ensures that systems and processes are embedded within such units to ensure compliance. Works with business units to document required compliance processes, ensuring needed resources to administer processes are identified. Develops appropriate systems to track and report on required compliance activities, including evaluation and selection of appropriate software to track filing deadlines and issue reminders of upcoming filing requirements.
  • Facilitates role of Chief Compliance Officer as single point of contact company-wide for communication with regulators, manages NORCAL Group company relationships with various state insurance departments and other regulatory bureaus/entities, and coordinates mid-level regulatory contacts handled directly by the business units.
  • Periodically reviews and updates the Code of Conduct to ensure continuing appropriateness and relevance in providing guidance to management and employees.
  • Collaborates with other departments to direct compliance issues to appropriate existing channels for investigation and resolution.
  • Consults with legal staff as appropriate to resolve difficult legal compliance issues.
  • Responds to alleged violations of rules, regulations, policies, procedures, and Code of Conduct provisions by evaluating or recommending the initiation of investigative procedures. Develops and oversees a system for uniform handling of such violations.
  • Monitors, and as necessary, coordinates compliance activities of other departments to remain abreast of the status of all compliance activities and to identify trends.
  • Identifies potential areas of compliance vulnerability and risk; develops/implements corrective action plans for resolution of problematic issues, and provides general guidance on how to avoid or deal with similar situations in the future.
  • Institutes and maintains an effective compliance communication program for the organization, including promoting (a) the use of EthicsPoint, (b) a heightened awareness of the Code of Conduct, and (c) awareness and understanding of existing, new, and emerging compliance issues.
  • Works with the Human Resources Department and others as appropriate to develop an effective compliance training program, including appropriate introductory training for new employees as well as ongoing training for all employees and managers.
  • Supervises the activities of the Compliance unit in support of compliance activities for NORCAL Group.
  • Attends compliance organization seminars and conferences as appropriate and approved by CCO for purposes of remaining well informed concerning best practices and legal/regulatory developments relevant to the insurance industry.
  • Assists CCO with preparation for board/committee meetings.
  • Oversees the development and maintenance of an appropriate filing system in support of the foregoing.
Fiscal Responsibilities: Reviews and approves compliance staff expense reports consistent with company guidelines. Supervisory Responsibilities: Supervises compliance staff; Works with staff on professional development plans and opportunities; Interacts frequently with staff to provide feedback on performance; Consults with CCO and Human Resources as appropriate. Expenses: Employees must be able to pay for certain business expenses in advance. Examples include such items as airline tickets, rental cars, hotel deposits, seminar registrations, etc. Employees are eligible for reimbursement for such expenses through NORCALs Expense Reimbursement Policy. Required Driving: n/a Non-Essential Functions: n/a Physical/Environmental Working Conditions
  • General office environment is primarily sedentary work which requires the following physical activities: standing, sitting, walking, reaching, lifting, finger dexterity, grasping, repetitive motions, talking, hearing and visual acuity.
  • The employee must occasionally lift and/or move up to 10 pounds.
  • Exposure to LCD on a daily basis.
  • A moderate noise level is usual.
  • Minimum of 4-year college degree
  • JD
Experience Required
  • Minimum of 10 years experience as a compliance professional for a regulated financial services company, ideally an insurance company.
  • Expertise in HIPAA and state privacy laws is essential; familiarity with insurance holding company act, insurance regulatory requirements in general (especially relating to fraud plan/training requirements and consumer complaints), OFAC, and document retention requirements is ideal.
  • Some outside law firm and/or in-house legal experience is preferred.
Skills Required
  • Demonstrated leadership ability and ability to communicate effectively orally and in writing.
  • Familiarity with operational, financial, quality assurance, and human resources procedures and regulations.
  • Effective project management skills.
This description portrays in general terms the type and levels of work performed and is not intended to be all-inclusive or represent specific duties of any one individual. Nothing in this job description restricts managements right to assign or reassign duties and responsibilities to this job at any time.

About this company

The mission of NORCAL Mutual Insurance Company is to provide the policyholder-owners the highest quality medical professional liability insurance products and services at the lowest responsible cost while maintaining a financially sound company. The company was formed by physicians in 1975 to carry out this mission. NORCAL Mutual insures nearly 20,000 physicians and other healthcare professionals in solo practice, medical groups, hospitals, clinics and allied healthcare facilities in California, Alaska, Rhode Island, Texas and Illinois. Facilities coming soon are Pennsylvania, Delaware, Kansas and Missouri. As an active partner with organized medicine, NORCAL seeks to anticipate and influence changing industry and policyholder trends and to respond to those trends to the benefit of the policyholders. They are endorsed by 31 county medical societies and professional organizations. The Core Values * Underwriting to the standard of care * Clinically driven risk management services * Aggressive defense of non-meritorious claims and prompt, fair resolution of all meritorious claims * Sustained financial strength and stability * Physician and health care focus To apply, click here.