Tom Bubeck
Chief Executive Officer / Ethisphere
More so than ever, companies today are expected to meet—and achieve—ethical standards. Ethisphere, led by CEO Tom Bubeck, is not only helping companies develop, implement and execute business operations with integrity, but also celebrating those that already have with its annual World’s Most Ethical Companies™ designation.
At Ethisphere, acting with integrity is not only the right decision, it’s also good business. For two decades, the global business ethics data, analytics and advisory firm—headed by CEO Tom Bubeck—has partnered with thousands of companies and their business executives to empower their success in an era of accountability and help them understand that ethical behavior is linked to a strong financial performance.
“[There’s a] notion that you have to be either a missionary or a mercenary,” Bubeck said in a CEO North America magazine interview. “That you have to choose between doing right and doing well economically. We wholeheartedly disagree with that point of view.”
Instead, conducting business with integrity is also about value realization: higher stock values, improved employee retention, favorable consumer preference and overall positive brand recognition.
Doing Right, Doing Well
For the past 18 years, Ethisphere has awarded the coveted designation of the World’s Most Ethical Companies™, lauding the achievements of businesses across the globe that have subscribed to ethical practices.
The 2024 list—just released at the beginning of March—includes more than 130 companies, spanning 20 countries and 44 industries, that earned the designation by demonstrating a commitment to ethics through programs that not only contribute to sustainable, long-term business growth, but also positively impact employees, communities and stakeholders.
“It is more important than ever for organizations to operate with integrity, to be accountable, to practice transparency and to operate in accordance with ethical business practices.”
In conjunction with the awards, Ethisphere tracks what they call the “Five-Year Ethics Premium,” a number that represents the margin by which the publicly traded companies that earned the designation outperformed a comparable index of global companies over a five-year period. For 2024, that premium is 12.3%.
“So, doing right is good business, right?” Bubeck said.
How Ethics Are Built
It’s one thing to claim your business is ethically run, it’s quite another to create a workplace culture where a commitment to ethics is both documented and actively displayed. Throughout its 18 years of recognizing the World’s Most Ethical Companies™, Ethisphere has developed a 240+-point framework that defines leading practices today, and they work with clients through assessments, surveys and executive interviews to create a benchmark for the company. This allows the organizations to see where they stand compared to their peers, as well as to the World’s Most Ethical Companies™ honorees.
The point of this benchmarking practice, Bubeck stated, is to answer three important questions: Where does our program stand today? Where should it be going? How do we get there?
To support the process of uncovering the answers to these questions, Ethisphere launched an online platform, The Sphere®, 18 months ago that not only helps with the benchmarking process, but also offers access to related regulatory guidance, resources and expert insights. Additionally, the company’s online resource center—free and open to all to utilize—offers hundreds of pieces of valuable content, ranging from podcast episodes and infographics to research summaries and presentation templates
“Employees want to work at a place that stands for good things̶ they like working there, they feel comfortable working there, and they’re proud of where they work.”
Ethical Business Requires Employee Comfort
“At Ethisphere, we talk a lot about the importance of an ethical culture,” Bubeck stated. “…Invariably, we’re humans, and people aren’t perfect. Sometimes people do, either intentionally or unintentionally, behave badly.”
However, Ethisphere’s work focuses on improving a culture of compliance within its clients’ workplaces. Some employees might make the wrong choices, but when you have others who are comfortable speaking up about this bad behavior, Bubeck said, it’s easier and faster to catch and mitigate it before it turns into a major issue.
It’s not always easy for a worker to come forward, though. They need to feel secure in their jobs and workplace relationships to take the risk of speaking up.
Nearly 50% of employees surveyed for Ethisphere’s 2023 Ethical Culture Data Set pointed to a fear of retaliation as the top reason they haven’t reported misconduct that they witnessed. In fact, 26% of respondents say retaliation is one of the most common types of misconduct they witness, behind harassment and discrimination. Nearly one-fifth of employees also stated they weren’t aware of a company policy on non-retaliation. Building a “speak-up” culture that encourages misconduct reporting means that compliance leaders won’t be in the dark about what’s happening right under their noses.
“Ethisphere enables businesses to live up to complex and high-stakes expectations in a way that not only increases shareholder value, but also upholds and strengthens every business’s social license to operate.”
Bubeck also notes that a business can “operationalize integrity” through performance evaluations and what Ethisphere calls “the four levers”: Who you hire, fire, praise, and promote. If some team members are engaging in misconduct, even if it’s to achieve company goals, consider letting them go.
“Although you may get short-term benefits from their results,” Bubeck explains, “in the long term, it will be corrosive, divisive, and damaging to your business.”
The Importance of Ethical Leadership
Once standards are in place, senior leadership must publicly showcase that same ethical commitment and adhere to the organization’s policies, especially when it comes to managing employees—and that includes making sure they have the time, space and resources to work ethically without any duress coming from above them.
Although all business executives want to achieve their business goals, focusing solely on money can lead to misconduct. By pressuring employees to achieve those goals, no matter what, they may inadvertently encourage wrong or even illegal behaviors.
In fact, more than 20% of participants responding to Ethisphere’s 2023 Ethical Culture Data Set felt like they have experienced some sort of pressure to compromise the company’s written standards, values or even the law in order to achieve business goals.
“Ensure that senior leaders and managers not only speak to the importance of behaving with integrity, but also that they actually do it right and walk the walk,” Bubeck recommends.
