28 February 2023
Nearly half of global corporate E&C professionals in the finance industry say that their organization has disciplined or terminated the employment of a senior executive or top performer in the past year for unethical behavior.
Nearly half (47%) of global corporate ethics and compliance (E&C) professionals at companies in the finance industry say that their organization has disciplined or terminated the employment of a senior executive or top performer in the past year for unethical behavior, according to recent data from leading ethics and compliance solutions provider LRN.
And when such situations have happened, companies appear to be increasingly prepared to take back financial compensation or implement other sanctions to discipline bad behavior. In fact, more than three-quarters (77%) of respondents who reported disciplining or firing an executive also said that the individual was subject to financial “claw back”. More widely, a sizable majority (62%) of respondents said that their organization’s policies provide for bonuses, incentives and other forms of financial compensation to be clawed back in the event of ethical misconduct.
“It’s clear that organizations in the finance industry are sharpening their focus on one standard of ethical behavior for everyone, when such a large proportion demonstrate that they aren’t afraid to discipline errant employees, including star performers or business leaders,” said LRN senior advisor Susan Divers. “Unethical behavior or compliance failures invariably impact a firm’s economic performance, and the substantial use of ‘financial clawbacks’ in such circumstances not only protects company revenues but also drives home that they have a business culture where misconduct will not be tolerated.”
The findings were included in this year’s Program Effectiveness (PEI) Report, which is based on survey responses from more than 1,860 ethics and compliance professionals at companies and organizations with at least 1,000 employees, across 26 industries and in 10 different countries – making it the most comprehensive research of its kind. Of the total respondents, 222 represented firms in the finance and financial services industries.
