Opinion KPMG 2010 | WISE Workplace

Unethical conduct in the workplace has increased significantly, according to a recent survey of Australian and NZ companies.

The survey on workplace fraud, conducted by respected global business advisors KPMG, showed incidents of bullying, harassment and assault are on the rise in the workplace.

Organisations surveyed were asked if they had experienced unethical conduct – other than fraud – during the survey period (February 1, 2008 to January 31 this year).

Fifty one per cent of respondents reported unethical behaviour compared with 37 per cent in a previous KPMG Fraud Survey conducted in 2008.

The report, however, says it is unclear whether the big increase can be solely attributed to a rise in unethical conduct or “greater organizational sensitivity to the problem.”

Reported unethical conduct included:

  • Unauthorized use of the internet (29.3%)
  • Management/employee conflict of interest (12.5%)
  • Falsely claiming sick leave or absenteeism (10.7%)
  • Conducting business transactions in a manner that derives an unwarranted personal advantage (9.2%)
  • Unauthorised disclosure of confidential or sensitive information (8.2%)
  • Lavish gifts or entertainment bought at company expense that are not brought to the attention of management (5.9%)
  • Gifts or entertainment bought at a company’s expense for parties external to the organization (4.2%)
  • Unauthorised use of corporate assets (3.8%)
  • Running a private business during work hours (2.3%)
  • Favoritism to suppliers (1.5%)
  • Disclosure of information via internet (1.1%)
  • Reprisals against an employee for reporting suspicions of fraud or misconduct (0.3%)
  • Improperly gathering competitor information (0.2%)
  • Other (11%).

Most respondents cited “poor communication of the organisation’s values or code of conduct” as a major reason for employee misconduct.

Other factors included financial pressures, lack of ethics and awareness and poor leadership by supervisors.

Respondents were also asked how unethical behaviour could affect their organization.

An overwhelming 93 per cent said such misconduct could lead to a loss of public trust and reputation damage.

When asked how they dealt with unethical conduct, 31 per cent of respondents said they provided training in ethics and 16 per cent said they had developed codes of conduct or ethics.

WISE Workplace, a firm with vast experience in investigating workplace misconduct, believes many of these cases can be prevented if adequate procedures are in place.

By seeking expert advice companies and Government agencies can minimize the fallout caused by unethical behaviour.

There are simple measures an organisation can take to deal with dishonest activity.

Conducting a thorough, professional investigation when complaints arise is a valuable part of responding to unethical conduct.

Investigation findings can be used to make effective business decisions and improve systemic issues that have contributed to the behaviour.

About the KPMG survey

KPMG Forensic and the University of Melbourne invited a sample of Australian and NZ organizations in the public and private sectors to complete a questionnaire on their attitudes and responses to fraud occurring in their organization from February 1, 2008 to January 31, 2010.

The report findings were based on responses received from 214 organisations.