SOURCE: Kenexa

December 16, 2008 11:00 ET

Several Highly Regulated Industries Report No Code of Conduct

Kenexa Research Institute Explores Existence of Code of Conduct Across the Globe

WAYNE, PA--(Marketwire - December 16, 2008) - Kenexa® (NASDAQ: KNXA), a leading provider of recruitment and retention solutions, today released information about the incidence of codes of conduct and how they relate to the existence of ethical cultures, among other factors. The data come from an analysis of the WorkTrends™ database, which is an annual survey of worker opinions conducted by the Kenexa Research Institute (KRI).

According to the WorkTrends data, employees in Australia, Canada, the United Kingdom and the United States have the highest awareness that their organizations have a code of conduct. Employees in Saudi Arabia, Germany and Russia have the lowest awareness. Of those companies with a code of conduct, 84% of employees reported that they understood the code.

With major ethical breaches occurring and publicized, many organizations have increasingly instituted a "code of conduct." These principles are intended to guide business decisions and allow work to be conducted in a way that supports the welfare of stakeholders and rights of an organization's constituents. Codes of conduct refer to practices that leaders can distinguish as "good" and "bad," and formalize the organization's perspective on adherence.

"From an industry standpoint, it seems clear that government (85%), banks (85%) and financial services institutions (80%) are focused on promoting behaviors that meet the 'ethical' litmus test, with high rates of code of conduct implementation. That said, even when codes of conduct exist, they may not fully address or even contemplate the consequences of risky business decisions made in the arena of intense competition, such as the decisions that led to the subprime mortgage crisis. For many, the concept of 'ethical' appears to be an ever-changing, dynamic construct that is continually re-defined by organizations, stakeholders and society at-large," said Jack Wiley, executive director, Kenexa Research Institute.

Wiley continued, "The data are troubling in that the accounting and legal industries report some of the lowest scores (70%). These are some of the industries where ethical behavior should have prominence. Interestingly, almost one of every ten employees surveyed didn't know if they even had a code of conduct. Even so, having a code of conduct is no guarantee against lapses in ethical behavior."

Business culture can undermine leaders' attempts at building an ethical culture. For example, the data show that, while 73% of banking employees report that their senior leaders support ethical practices, only 63% say that they can report a breach without fear of reprisal. Senior leaders' support of ethics is notably higher than for the average employee, but leaders' support is only one piece of ensuring employees' ethical choices.

Not surprisingly, large organizations of more than 10,000 employees were the most likely to have a code of conduct (84%). The use of a code of conduct decreases in frequency as the organization size decreases, with only 67% of employees in organizations of 100 to 249 people reporting a code of conduct.

The strength of an ethical culture correlates with the publishing of a code of conduct. In organizations with a strong ethical culture, 87% of employees reported that a code of conduct had been published, as compared to organizations with a weak ethical culture, where only 71% reported the existence of a code of conduct.

Organizational reputation and performance also were related to an ethical culture-in a strong ethical culture, 58% and 63% of employees believed that their organization's reputation and performance had improved in the past year, respectively. Only 11% and 14% of those working in weak ethical cultures reported organizational reputation and performance improvement in the last year.

"The WorkTrends survey also showed that management was more in tune with whether a code of conduct exists. Since it is the individual contributors who are most often conducting business directly with clients and customers, one would hope that front-line staff would be equally aware of the code of conduct. That, however does not seem to be the case," stated Wiley.

About WorkTrends™

The Kenexa WorkTrends database is a comprehensive normative database of employee opinions on topics including leadership, employee engagement and customer orientation. Comparisons are available for workers from Australia, Brazil, Canada, China, Germany, India, Italy, Japan, Mexico, the Netherlands, Russia, Saudi Arabia, the United Kingdom and the United States.

About Kenexa

Kenexa (NASDAQ: KNXA) is a global leader in building the world's greatest workforces using a combination of software, employee research science and business process optimization. Kenexa's global solutions include applicant tracking, onboarding, recruitment process outsourcing, employment branding, skills and behavioral assessments, structured interviews, performance management, multi-rater feedback surveys, employee engagement surveys and HR Analytics. Kenexa is headquartered in Wayne, Pa. (outside Philadelphia). Additional information about Kenexa and its global products and services can be accessed at www.kenexa.com.