Trust Deficit in the WorkplaceBy
A study from Ernst & Young finds a lack of trust in companies throughout the world.
Trust is fundamental to each of the overarching principles contained in the IMA Statement of Ethical Professional Practice: honesty, fairness, objectivity, and responsibility. Audit and advisory firm Ernst & Young (EY) has conducted Global Generations 3.0, a survey of 9,800 workers to explore trust in business that reveals how far professionals need to go before this quality is a cornerstone in the workplace. The research found that “less than half of full-time workers surveyed globally between the ages of 19-68, in eight countries, place a ‘great deal of trust’ in their employer, boss, or colleagues.” Globally, “a great deal of trust” in employers was lowest at 46%, and trust levels for bosses and colleagues were at 49% each.
Karyn Twaronite, EY Global Diversity & Inclusiveness Officer, said, “Giving individuals a forum to voice their opinions on what factors truly influence their level of trust in an employer, boss, or team not only helps guide us as we continue to build a culture that is more inclusive of all views and differences, but also helps pave the way for us to be more progressive as modern trustworthy organizations, well into the future.”
A CULTURE OF TRUST
The factors that global respondents cite most frequently as very important in determining trust in their employer are whether it “delivers on promises” (67%), “provides job security” (64%), “provides fair compensation and good benefits” (63%), “communicates openly and transparently” (59%), and “operates ethically” and “provides equal opportunity for pay and promotion for all people regardless of differences” (both 57%).
Although management accountants and finance managers aren’t likely to be able to fulfill all of those factors, their responsibilities affect all areas and functions of their organizations. Therefore, they have an important role to play in making sure that if a strong ethical culture is set forth at the top, they can then help implement it throughout the organization. If ownership or the board of directors sets a poor ethical tone, IMA members should do all they can to bring about change.
Global Generations 3.0 finds that Generation X workers (born between 1965 and 1984) were least likely to place a great deal of trust in their current employer. Globally, the most influential factors leading to low trust in their current employers across age groups all involve compensation. These are “employee compensation is not fair” (53%), “does not provide equal opportunity for pay and promotion” (48%), “lack of strong leadership” (46%), and “too much employee turnover” and “does not foster a collaborative work environment” (both 43%).
The negative outcomes suggested by workers who have a low level of trust in their current employer include “pressure to seek employment elsewhere” (42%), “work only the required minimum number of hours” (30%), and “adopt a less engaged attitude resulting in lower productivity” (20%). Whether they are supervisors or not, management accountants and finance managers should always refrain from engaging in any conduct that would compromise the ethical fulfillment of their duties.
The country reporting the lowest level of trust was Japan, where only about 20% of survey respondents had a great deal of trust in each of the three groups. The United Kingdom followed, where the “great deal of trust” level for companies was 33%, 42% for bosses, and 44% for colleagues. Next was the United States, where the trust levels were 38%, 50%, and 48%, respectively. The two countries with the highest “great deal of trust” ratings were India and Mexico, where the levels approached two-thirds of the total.
STRONG CULTURE AIDS PROFITABILITY
In another research study conducted by its British practice in corporate integrity, EY reports that 40% of senior-level respondents from large British public companies say that “culture is fundamental to overall strategy and performance” while an additional 46% say it’s “very important.” That study, “Is your board yet to realise the true value of culture?” also notes that 92% of respondents say “investing in culture has increased their financial performance” and 55% believe that “investing in culture has increased operating profits by 10% or more.”
The study notes that intangible assets, rather than manufacturing machinery and equipment, can now represent up to 80% of the value of a company. An organization’s culture is key to its successful strategy and performance, helping to produce long-term growth that’s sustainable while reducing risk. Culture matters because it defines how an organization is run. As a critical component of culture, ethics guide employee behavior and influence the day-to-day decisions made throughout the organization. Because of interactions between the organization and its vendors, customers, and community, ethical practices are also a significant factor in an entity’s reputation. “Our market approach, HR practices, internal functions, and other strategies are all in line with our overall values and mission,” said one senior executive of a giant British company.
“The lessons are clear,” the study reports. “Culture is important and generates value for organizations willing to invest in it, encompassing both improved performance and reduced risk.”
IMA ETHICS HELPLINE
For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline.
In the U.S. or Canada, dial (800) 245-1383. In other countries, dial the AT&T USA Direct Access Number from www.usa.att.com/traveler/index.jsp, then the above number.
The IMA Helpline is designed to provide clarification of provisions in the Statement of Ethical Professional Practice, which contains suggestions on how to resolve ethical conflicts. The helpline cannot be considered a hotline to report specific suspected ethical violations.