Has Enron Made Companies More Ethical?

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A new national business ethics study, gathered from surveys of more than 200,000 U.S. employees, finds an increase in employee awareness of issues related to business integrity, social responsibility and corporate values since Enron's accounting scandal in 2001.

Leading global employee research and consulting firm ISR announced today the result of a national business ethics study showing a dramatic five-year increase in how employees perceive their company’s ethics. The study, gathered from surveys of more than 200,000 U.S. employees, examines issues of integrity, social responsibility and company values.

“After the SEC began investigating Enron’s accounting scandal in 2001, ISR documented an increased interest in better understanding the role ethics plays in a company’s culture, from identifying potential land mines to determining how to make improvements before a crisis occurs,” said ISR Executive Director Adam Zuckerman.

Among its findings, ISR’s national business ethics study examines the impact the media attention on corporate ethics scandals has had on US employees. From 2001 to 2005, the study found that employee opinions on company integrity increased a dramatic 11 percent from 2001 to 2005.

This trend is not isolated either. ISR data shows that US employee awareness of corporate integrity, social responsibility and corporate ethics issues have all increased since 2001.

Other study findings include a seven percent increase since 2001in positive employee opinions across the U.S. to the statement, “My company is socially responsible in the community.”

Values are Consistent with Management Decisions

Nationally, employee perceptions of internal corporate values increased from 78 percent in 2001 to 82 percent in 2005. Likewise, perception of management’s consistency with stated internal values has increased from a 60 percent positive response in 2001 to 65 percent in 2005.

“Overall, these figures show there is reason to be optimistic about the improving state of ethics in corporate America,” said Zuckerman. “Knowing where to focus your efforts is half the battle, and companies are clearly paying more attention to ethics.”

To receive additional data illustrations from ISR’s U.S. Ethics Study, contact richard.sharp@isrinsight.com. For more information on ISR’s ethics solutions, visit our website, http://www.isrinsight.com/solutions/organizationalethics.aspx

About ISR

ISR is a global HR research and consulting firm founded in 1974. ISR has designed and implemented employee, management, and customer surveys for 35 million employees from more than 3,000 companies in 106 countries. Visit ISR online at http://www.isrinsight.com

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Peter Wiltjer