A new poll from IDG's
CMO magazine, a
business publication for chief marketing officers debuting today, shows almost
half (48%) of marketing executives believe improper accounting practices is
number one among three top ethical issues facing U.S. business, followed by
conflicts of interest (42%) and deceptive sales and marketing practices (42%).
The poll comes amid corporate scandals rocking the nation, including cases
involving brand names such as Enron, Tyco, Pfizer and Martha Stewart.
Fully a third (31%) of marketing chiefs warn they are not confident U.S.
companies are taking appropriate actions to stem the tide of corporate scandals.
In their careers as marketers, the executives say they have personally witnessed
colleagues: participating in high pressure, misleading or deceptive sales
tactics (45%); misrepresenting company earnings, sales and/or revenues (35%);
withholding or destroying information that could hurt company sales or image
(32%), and conducting false or misleading advertising (31%). When asked the best
way to deter future unethical behavior, almost three- quarters of respondents
(73%) answered increasing penalties for offenders, with 64% suggesting employee
education programs and 52% recommending continued publicity about those being
punished for unethical behavior.
Ninety-four percent (94%) of marketing chiefs participating in the poll are
actively following the on-going corporate ethics scandal cases, with the
majority (66%) stating they want to know what demands are being placed on
corporate America. Half of respondents (50%) are monitoring the cases because
they want to avoid similar situations while 55% are watching from the sidelines
out of curiosity.
In spite of the concern expressed by some marketers taking the poll, the
majority (68%) say they are confident in the actions of U.S. companies aimed at
preventing future financial mismanagement and scandals. The majority also rates
America's companies as somewhat ethical (62%). Interestingly, only 11% rate the
actions of U.S. companies as very ethical. Yet, when asked to rate their own
company, 59% say they view their companies as very ethical. Additionally, more
than half (52%) of marketing strategists believe, based on their own experience
and knowledge, that the ethical standards in their company have improved during
the last two years.
CMO magazine Editor in Chief Rob O'Regan says, "Marketing chiefs have a wide
view of their workplace environs and interact with peers across many functions.
They, almost better than any other executive, know first hand what is and isn't
happening inside U.S. companies. This poll is proof positive that all executives
need to roll up their sleeves and work harder to clean up U.S. businesses,
establishing ethical practices as a primary objective for the future. If they do
not heed this clarion call, they stand to further erode consumer confidence."
The CMO Marketing & Ethics News Poll was designed to elicit the opinions of CMOs-executives
responsible for building brands, growing revenues, and courting consumer
affinity-on a wide range of ethical issues facing the nation. Additional
highlights appear below.
Ethics and Legal Violations:
Forty-one (41%) of respondents say their company has suffered a violation and
39% say they have not seen a violation in the past two years. Marketing
strategists whose companies experienced a violation say the leading outcomes
after a violation are: termination of employees (84%), an incident report to law
enforcement (36%), temporary suspension of employees (32%), and a lawsuit being
filed against an employee (31%). The majority of the group who experienced a
violation (73%), state the incidents did not have a significant impact on their
Policies & Enforcement:
While 86% of respondent companies have an ethics policy to govern the decisions
of employees, only 58% of marketing chiefs say their CEO/COO is directly
involved in creating and communicating ethics policies, and only 56% say their
executives are required to take ethics training. Reflecting on the results,
O'Regan says, "This finding suggests senior management needs to take a more
active role in setting, and building awareness about, ethics policies since
their actions set the tone for the rest of the organization."
The top activities covered by existing ethics policies are: financial reporting;
sexual conduct; conflict of interest; bribery, coercion or kick backs; gifts and
graft as well as applicable laws and regulations; safety; online customer
privacy, and customer data handling. Nearly three quarters of respondents (71%)
say they work in a place with a method for reporting unethical behavior
anonymously and 61% say there are policies to protect those who point out
unethical behavior. Ethics training leaves room for improvement, with nearly a
third of respondents (27%) stating their company does not provide training on
how to handle unethical practices they may observe. According to these marketing
executives, the number one factor with the greatest impact on increasing the
need for ethics policies in U.S. companies is: misstatement of financial results
to make the bottom line look better (83%).
When asked whether the states, U.S. Congress or both should regulate the sale of
customer data, marketing leaders were divided on the issue with 38% choosing the
feds and 30% opting for both. Only 11% picked the states as the preferred
arbitrator of customer data sales. The majority of respondents (85%) say their
companies do not sell or rent information about its customers.
About the CMO Marketing & Ethics News Poll:
The CMO Marketing & Ethics News Poll was conducted by CMO magazine to learn the
opinions of chief marketing officers about the state of ethics in U.S. business
and its impact on the marketing function. The survey was conducted online from
July 28 to August 4 over an independent list of senior marketing executives from
the e-Rewards for Business(TM) panel. Of the 300 marketing executives who
responded, 83% hold the title of vice president or above up to, and including,
the title of CMO. Eighty-nine percent (89%) of respondents work in organizations
with 500 or more employees, with an average company size of 15,630 employees and
average marketing budgets of $76.4 million. At a 95% confidence level, the
margin of error is +/- 5.7%.
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