Hardly a week passes without at least one corporate crisis in the news, often with unpredictable and long-term negative consequences, impacting not only the organization’s reputation, but also all its internal and external stakeholders.
When the culture and core values of an organization are not only strong but also reinforced daily, and leaders keep their word, the following occurs:
- Employees are more engaged and turnover decreases
- Innovation increases
- Decisions are made faster
- The reputation “bank account” grows
- Crises diminish
- Profits are higher
According to a 2011 Booz & Co. study (pdf), “The Global Innovation 1000: Why Culture is Key,”companies with both highly aligned cultures and highly aligned innovation strategies have 30 percent higher enterprise value growth and 17 percent higher profit growth than companies with low degrees of alignment.”
Accoridng to another study, companies with a highly engaged workforce improved operating income by 19.2 percent over a period of 12 months whilst those companies with low engagement scores saw operating income decline by 32.7 percent over the same period. (Towers Perrin ISR 50 (pdf))
Lack of integrity elevates the risk of negative surprises. A few examples:
Volkswagen lost 20 percent of its stock value after the emissions scandal.
Target’s profits fell 34.3 percent after it’s data breach.
Mylan stock is getting crushed after their Epipen debacle.
Well’s Fargo remains a train wreck.
Much of our work at Trust Across America-Trust Around the World focuses on measuring the integrity or trust “worthiness” of public companies and identifying “best in breed” through a quantitative framework we call FACTS®.
Feedback and input from professionals like the readers of the FCPA Blog is critical to our research.
Understanding that ethics, integrity and compliance are closely linked, would you be willing to answer the following question?
How does your company measure, track and manage its integrity or trust “worthiness” with both its internal and external stakeholders?
Thank you in advance for responding either in a comment to this post or to me by email.
Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award winning TRUST INC. book series and a Managing Member at FACTS® Asset Management, a New Jersey registered investment advisor. In 2012 she was named one of “25 Women who are Changing the World” by Good Business International. In 2017 she was named a Fellow of the Governance & Accountability Institute.