There is reason to be optimistic about the improving state of ethics in corporate America. Knowing where to focus your efforts is half the battle, and companies are clearly paying more attention to ethics.
Adam Zuckerman, Executive Director, ISR

Corporations must engage in a new level of dialogue that resonates with stakeholders' personal values. They also will have to increase transparency and adopt a more integrated approach to monitoring and influencing the online communications shaping their reputations.
Paul Argenti, professor of Corporate Communication, Dartmouth's Tuck School of Business

Employee research and consulting firm ISR's national business ethics study shows 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 landmines to determining how to make improvements before a crisis occurs," said ISR Executive Director Adam Zuckerman.

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Among its findings, ISR’s national business ethics study examines the impact the media attention on corporate ethics scandals has had on US employees. The table at left illustrates 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 (image right) include a seven percent increase in positive employee opinions across the U.S. regarding social responsibility since 2001.

Values are Consistent with Management Decisions

As illustrated in the two tables at left, national employee perceptions of internal 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."

According to a recent study by the National Consumers League (NCL), Americans' definition of the Socially Responsible Company is changing dramaticly. According to NCL;

-- Nearly Half of Americans Say Treating/Paying Employees Well Most Important

-- Two-Thirds Feel It's Important to Purchase Products from Companies that Share Similar Values

-- Only One-Fifth Believe Corporations Are Doing a Good Job

-- Internet Plays a Growing Role in Shaping Consumers' Views of a Company

More than environmental stewardship and philanthropy, nearly one in two Americans believe the most important proof of corporate social responsibility is treating employees well.

A national opinion survey commissioned by the National Consumers League and Fleishman-Hillard International Communications found that American consumers have their own views on corporate social responsibility (CSR) that run counter to established beliefs.

Americans Define CSR in Ways Most Relevant to Them
The survey found that 76 percent of American consumers agree that to be socially responsible, companies should place employee salary and wage increases above making charitable contributions. Similarly, the survey found that 76 percent believe that a company's treatment of its employees plays a big role in consumer purchasing decisions.

"What American consumers are telling us -- perhaps influenced by ongoing coverage of corporate layoffs and employee-benefit reductions -- sheds new light on how we view corporate social responsibility," said Fleishman-Hillard Chairman and Chief Executive Officer John D. Graham. "If companies want to maintain and strengthen their reputations, it will be essential for them to invest actively and visibly in their employees. It is also more important than ever to understand the online resources that Americans are using to learn about companies and their track records for corporate social responsibility."

Values Matter
Average Americans feel strongly about buying products from, or working for a company whose values are aligned with their own personal values. Survey respondents say it's "extremely" or "very" important to work for (79 percent), buy products and services from (65 percent), and socialize with (72 percent) those who have similar values and principles.

"The study findings are especially welcome because they demonstrate that the brand of CSR that most corporations favor simply isn't enough to impress most consumers," said Mal Warwick, chair of the Social Venture Network and co-author of Values-Driven Business: How to Change the World, Make Money, and Have Fun. "The consumer attitudes reported in this study reflect more closely an approach to social responsibility called the 'triple bottom line,' in which people, planet, and profit are balanced. Rather than detract from the traditional bottom line, this approach, requiring policies that actively favor the key stakeholders in a business -- its employees, its customers, its suppliers, its community, and its environment, as well as its owners -- makes that business more competitive."

Corporate America Receives Low Marks for CSR Performance
While Americans believe that social responsibility is important, only 21 percent give U.S. corporations top marks for being socially responsible. When asked to rate how companies are performing compared with two to three years ago, only 30 percent believe that companies are doing a "somewhat better" or "a lot better" job of being socially responsible.

The Internet Is Transforming the CSR Landscape
Use of Internet technology is changing the way people learn about and determine which companies are socially responsible, the survey found.

Almost half of the respondents (47 percent) say they have used the Internet to learn about the extent to which a company is or is not being socially responsible. The survey results also demonstrate that 53 percent of Americans believe that their own online research is one of the most credible means by which to shape their opinions on deciding whether U.S. companies are being socially responsible.

"This research reflects an exciting coming-of-age for consumers, as they are more empowered than ever to assess and react to corporate social responsibility issues," said National Consumers League President Linda Golodner. "Activists and consumer watchdog groups remain important opinion leaders, but rank-and-file Americans are becoming more knowledgeable than ever on socially responsible behavior, and this trend will influence businesses and increasingly benefit society."

The research indicates that a new generation of online activists is emerging that cuts across many socioeconomic groups in the arena of corporate social responsibility. Going online to learn and advocate for social issues appears to be increasingly a mainstream activity of the average American. The survey found that 58 percent of survey respondents said that because of the increased availability of online resources and information, they (or other people like them) are "more informed" about companies' records for social responsibility than they were a few years ago.

The survey also found a positive relationship between active Internet use and engagement in social responsibility. About two-fifths of those using the Internet have sent e-mail to a company about its products or services (41 percent) or to an elected state or federal official about an issue (38 percent).

Americans who frequently use online resources were also more aware of global standards that act as a seal of approval that people can use to validate a company's social responsibility commitment.

"These survey findings indicate that as the American public continues to refine its definition of corporate social responsibility and gain empowerment through online resources in their new role as activists for social change, companies, academics, and interest groups must re-evaluate the criteria they have established in this arena," said Paul Argenti, professor of Corporate Communication at Dartmouth's Tuck School of Business. "Corporations must engage in a new level of dialogue that resonates with stakeholders' personal values. They also will have to increase transparency and adopt a more integrated approach to monitoring and influencing the online communications shaping their reputations."