Diversity, Equity and Inclusion

What’s Integrity in the Workplace?

Can leaders truly build resilient and trustworthy businesses by integrating ethical considerations into the fabric of their organization?
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Integrity, as defined by C.S. Lewis, is doing the right thing, even when no one is watching. These profound words resonate deeply in today’s complex business landscape, where success and profitability often take precedence over integrity in the workplace. 

Increasing societal pressures and rising transparency have left organizations grappling with the delicate balance between achieving their goals and upholding unwavering integrity.

From introducing the new role of Chief Integrity Officer (CIO) to updating their code of ethics – it’s clear that companies recognize the importance of integrity.

But are standalone ethical codes and integrity frameworks disconnected from corporate realities? Is upholding principles a liability or an asset that drives sustainable success? Can leaders truly build resilient and trustworthy businesses by integrating ethical considerations into the fabric of their organization?

To answer these questions, we examine the intricate interplay of integrity in the workplace and the practical realities of the modern workplace.

What is Integrity in the Workplace?

To truly understand integrity, it is essential to distinguish what integrity is not. It is not merely a superficial act of doing the right thing for appearance’s sake or to meet public scrutiny.

What is integrity in the workplace, then?

True integrity is consistently upholding high ethical standards because it is the morally correct course of action rather than seeking personal gain.

Having a strong sense of integrity in the workplace means that:

  • You are trustworthy and honest
  • You have strong moral principles
  • You take responsibility for your actions

To foster integrity within an organization, it is crucial to develop a comprehensive understanding of the term and agree on a definition that aligns with the organization’s values and goals.

However, defining integrity in a business context is not an easy task.

Defining Integrity

Integrity is widely recognized as a fundamental core value, with fifty-five percent of Fortune 100 organizations highlighting its importance. While companies often include it as a pillar of their mission statements, it can be challenging to pinpoint its precise meaning in the day-to-day lives of employees.

In certain industries, established codes provide some insight into what integrity might look like in practical business scenarios.

For example, the financial sector’s FINRA Rule 2010 mandates that workers “observe high standards of commercial honor.” Similarly, the UK General Medical Council expects doctors to “always be honest about their experience, qualifications, and current role.”

From these examples, we can deduce that integrity revolves around consistently making ethical and morally sound choices whenever possible.

In the workplace context, integrity extends beyond compliance or ticking boxes. It transforms the fundamental question from “Is this allowed?” to “Is this right?” when it drives a business. Essentially, workplace integrity signifies a commitment to doing the right thing, especially in the face of adversity.

Characteristics of a Workplace with Integrity

So, what does a workplace with integrity look like?

To gauge the presence of integrity within an organization’s culture, specific characteristics serve as telltale signs:

  1. Honesty and Transparency – An organization that upholds integrity has open and honest communication. Leaders share information openly, both the successes and the challenges. Employees feel empowered to express their opinions and concerns, knowing their voices are valued and heard. Transparency is upheld in decision-making processes, and there is a commitment to providing accurate and truthful information.
  2. Well-being and Mental Health – A workplace with integrity recognizes the importance of employee well-being and mental health in the workplace. It promotes a supportive and inclusive environment that encourages work-life balance, burnout and stress management, and professional growth. Mental health resources, EAP programs, and support systems are readily available, and employees are encouraged to prioritize self-care without fear of judgment or reprisal.
  3. Ethical Organizational Leadership – Good leaders in a workplace with integrity prioritize the well-being and success of their team In this dynamic business environment, leaders must embrace their role as ethical stewards, navigating the fine line between profitability and integrity. They lead by example, demonstrating ethical behavior and accountability.
  4. Respectful and Inclusive Behavior – Embracing diversity and inclusion is a testament to an organization’s commitment to integrity. A workplace with integrity values and appreciates the unique perspectives and contributions of all individuals. Respectful and inclusive employee experience is practiced at all levels, ensuring everyone feels valued, respected, and included, regardless of their background, identity, or characteristics.
  5. Consistency and Reliability – Maintaining consistency between words and actions is an essential attribute of integrity. Individuals with workplace integrity follow through on their commitments and deliver on promises. They set realistic expectations and ensure they can be relied upon. This consistency builds trust and confidence among colleagues, stakeholders, and clients.

By embodying these characteristics, a workplace cultivates an atmosphere of integrity, fostering trust, ethical conduct, and positive work culture.

Why is Integrity Important in the Workplace?

Amid geopolitical crises and economic uncertainties, it’s easy for organizations to focus all their resources solely on those challenges. However, there’s another crucial matter that organizations are addressing: ESG compliance. 

While the global spotlight has been on the environmental and social aspects of ESG, leaders and organizations are finally putting the “G” of ESG on the agenda – governance.

Business leaders are increasingly acknowledging the tremendous value of fostering integrity structures. A recent survey by the OECD revealed that a remarkable 60% of companies viewed their investments in enhancing business integrity as highly valuable rather than merely perceiving it as an expense.

But why is integrity so important in the workplace? Is there a tangible connection between good behavior and business success?

Benefits of Workplace Integrity

Running an organization with integrity is not only the morally right thing to do, but it also brings about commercial benefits. Here are some reasons why integrity in the workplace matters:

  1. Strong Business Performance

Research has shown a clear link between integrity and business success. According to the Ethisphere Institute, organizations recognized as the World’s Most Ethical Companies outperformed the US large-cap sector by 14.4% over a five-year period.

  1. More access to capital

Companies that prioritize integrity and transparency enjoy the advantage of a lower risk profile. Numerous studies have found that corporate transparency is associated with easier access to capital and lower costs, making it financially beneficial for businesses. This means that acting with integrity can lead to cheaper access to funding and reduced financial risks.

  1. Higher Shareholder Returns

Companies with a robust commitment to integrity have been found to generate better returns for shareholders. Estimates suggest that these companies can achieve 10-year shareholder returns that are 7% higher than those with low integrity. By upholding ethical standards, businesses can create value for their shareholders and attract long-term investors.

  1. Improved Employee Conduct

A workplace culture rooted in integrity can significantly influence employee behavior. Research from the Corporate Executive Board indicates that employees in organizations with a strong culture of integrity are 90% less likely to observe misconduct in the workplace. Moreover, they are more inclined to report any misconduct they witness, fostering an environment of accountability and trust.

  1. Mitigation of Corruption Consequences

Companies demonstrating a genuine commitment to integrity are likely to face less severe consequences in the event of corruption. Many countries, including the United States, have enacted legislation that allows for reduced penalties or suspensions for firms with robust internal control systems in place. This means that businesses that prioritize integrity can mitigate potential legal and reputational risks more effectively

Consequences of Lacking Integrity in the Workplace

On the other hand, unethical behavior within a company can have far-reaching consequences, causing a ripple effect. In a company that lacks integrity, the costs of unethical behavior manifest themselves in various forms:

  • Legal repercussions, such as hefty fines, confiscation of assets, or even the incarceration of key personnel
  • Fractured partnerships with stakeholders and suppliers
  • Reputational brand damage can result in decreased customer retention, waning brand loyalty, and a decline in market share
  • Disengaged workforce as employees who witness or are exposed to unethical conduct often experience a drop in morale and job satisfaction
  • Toxic culture perpetuation, as unethical behavior tends to spread like wildfire, infecting the work environment and fostering a culture of misconduct
  • Community alienation, as a tarnished brand image, can impact relationships with local authorities, hinder opportunities for growth, and damage the overall perception of the company among potential employees, customers, and partners

In today’s hyper-connected digital age, where news spreads rapidly through various media channels, the fallout from negative events can be devastating.
Therefore, maintaining integrity isn’t just a moral imperative but a strategic business move. It’s the foundation upon which trust is built, and trust is the currency of sustainable success.

Challenges to Upholding Integrity at Work

Maintaining unwavering integrity may seem idealistic on paper, but it often clashes with competing priorities like performance and profitability in the complex business realm. Studies have revealed a disheartening reality: personal ethics can be the first standard to slip in moments of crisis.

Recent research conducted by EY sheds light on organizations’ struggles in upholding their standards amidst rapid change and challenging market conditions. A staggering 59% of respondents acknowledged the difficulty of maintaining integrity, with the figure rising to 63% for those operating in emerging markets.

These numbers paint a sobering picture and prompt crucial questions about the state of integrity in today’s corporate world.

Moreover, research indicates that as pressure mounts, the likelihood of employees observing misconduct within their organization also increases. This correlation is particularly pronounced in midsized organizations, where the risks are amplified.

Adding to this alarming reality is the fact that 46% of respondents believe that certain managers within their organizations would willingly sacrifice their integrity in pursuit of immediate profits. This distressing figure jumps to an even more concerning 51% when referring to senior managers who should serve as beacons of ethical leadership.

These findings are a stark reminder that upholding integrity in the face of competing priorities is an ongoing struggle.

Addressing Ethical Dilemmas

One significant avenue for effectively addressing ethical challenges lies in implementing ethics and compliance training. A KPMG survey revealed that 87% of respondents from organizations with comprehensive compliance programs reported increased motivation among individuals to “do the right thing.”

Certain organizations have taken a bolder step by appointing a chief integrity officer to occupy a pivotal role in the C-suite. Compliance leaders, in particular, are entrusted with broader integrity responsibilities, including overseeing government relations and environmental, social, and governance (ESG) matters.

While appointing a chief integrity officer in the C-suite is a step in the right direction, that alone is not enough to address the multifaceted ethical challenges facing companies today.

Overcoming existing hurdles, such as inconsistent terminology, framing, and reporting recommendations, as well as the over-emphasis on environmental aspects in ESG relative to other material risks and opportunities, is essential.

Above all, integrity should not be confined to a singular role or department. It must permeate every level and function of an organization.

Dealing with Resistance to Change

Despite approximately 60% of board members affirming that their organization has frequently communicated the importance of behaving with integrity over the past 18 months, only 30% of employees can recall such messages. Such disparity highlights the inherent challenge of effectively transmitting and embedding ethical values throughout an organization.

To bridge this communication gap, it is imperative to rethink how information is conveyed. Merely sending emails or issuing one-way communications about integrity is insufficient. Instead, organizations should strive for more interactive and engaging approaches that foster a stronger connection between employees and important ethical information.

For integrity and ethics to take root, leaders must go beyond mere words and actively explain, model, and act upon the organization’s values and code of conduct.

However, studies reveal a troubling trend: the higher an employee’s seniority, the greater the likelihood of engaging in unethical behavior. Senior employees often resort to justifying misconduct, such as ignoring  wrongdoing within their teams, deceiving external parties like auditors or regulators, or succumbing to bribery to advance their own careers or financial gain.

Creating lasting change in organizational culture is a complex endeavor that far surpasses the scope of rules and regulations. It requires a concerted, long-term effort to transform the fundamental fabric of the organization rather than relying on

Examples of Integrity in the Workplace

Integrity is not just a concept; it manifests through tangible actions that uphold ethical standards and foster trust in the workplace.

Here are some examples of integrity in the workplace and how they can be demonstrated across various aspects of business:

  • Advertising: A company ensures its environmental claims are supported by evidence, avoiding any misleading statements
  • Supply Chain Management: Businesses commit to fair trade practices, verifying that suppliers adhere to labor and environmental standards
  • Data Privacy: Organizations handle customer data responsibly, implementing robust security measures and obtaining explicit consent for data collection
  • Conflict of Interest: Board members recuse themselves from decision-making processes where personal financial interests could compromise their objectivity
  • Whistleblower Protection: Companies have ethics hotlines as an integral part of their whistleblower protection framework and establish policies that encourage employees to report unethical behavior without fear of retaliation
  • Financial Reporting: Businesses provide accurate and transparent financial statements, following accounting principles and regulatory requirements
  • Employee Treatment: Organizations foster a culture of dignity and respect, prohibiting discrimination and microaggressions and promoting equal opportunities for all employees
  • Intellectual Property: Businesses respect intellectual property rights, avoiding plagiarism, copyright infringement, and unauthorized use of others’ work
  • Environmental Responsibility: Organizations demonstrate integrity by adopting sustainable practices as part of their CSR efforts, adhering to environmental regulations, and seeking ways to minimize their ecological footprint

These examples illustrate that integrity permeates various aspects of the workplace, from advertising and supply chains to data privacy and employee treatment. Organizations can foster a culture of trust, accountability, and ethical conduct by consistently demonstrating integrity through actions.

Strategies for Maintaining Workplace Integrity

So, where do you begin when aiming to cultivate a culture of integrity in the workplace?

Here are some strategies that can help in fostering workplace integrity:

  • Establish Clear Values and Policies: Develop a comprehensive code of ethics that clearly defines expected behaviors and values. Ensure that employees know these values and policies through regular communication and training.
  • Leadership Commitment: Leaders should demonstrate a solid commitment to integrity and act as role models for ethical behavior. They should consistently reinforce the importance of integrity and hold themselves accountable to the same standards.
  • Cultural Training: Provide training programs that promote ethical decision-making and help employees navigate ethical dilemmas. These programs should build awareness, enhance ethical reasoning skills, and encourage open dialogue.
  • Incentives and Recognition: Align incentives and performance evaluations with ethical behavior and integrity. Recognize and reward employees who exemplify integrity in their work and decision-making.
  • Technology and Data Analytics: Leverage technology and data analytics to enhance compliance and integrity monitoring. Implement systems that detect potential violations and provide real-time alerts, allowing for proactive action.

Creating and maintaining a culture of integrity requires a strategic approach encompassing various aspects of an organization.

Conclusion

In an era where success often overshadows integrity, organizations must recognize the importance of upholding ethical standards in the workplace. By embracing integrity in the workplace as a core value and integrating it into all aspects of their operations, businesses can foster a culture of trust, mitigate risks, and ultimately achieve sustainable success in the long run.

Written by Ivana Radevska

Senior Content Writer at Shortlister

DE&I Consulting Companies

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