Leadership & Management

Health sector tops ethics while corruption and executive pay signal key ethical issues for corporate Australia

Health Industry Hub | November 17, 2021 |
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Leadership & Management: After record highs last year, our perception of Australia as an ethical society has fallen in 2021 with drops recorded across most industries, occupations and sectors, a new report released by Governance Institute of Australia today has found. 

The Ethics Index 2021, a survey of 1,000 people’s attitudes to ethical conduct across society, has recorded an Ethics Index Score of 45, down from the five-year high of 52 in 2020. The Ethics Index Score is a crunching of data from the entire Ethics Index to quantify people’s perception of the level of ethical behaviour.

COVID-19: The ethics of lockdowns, vaccinations, and the return to the office  

The Ethics Index found that as a nation, we are overwhelmingly in favour of masks in the office (net score 54) and vaccinations in the workplace (32, up from 21 in 2020), but curfews (15, down from 41 last year) and continued international border closures (42, down from 67) are increasingly unpopular options.

“We have had almost two full pandemic years now, but each of these years has thrown up its own distinct set of ethical challenges, responses and results,” Governance Institute CEO Megan Motto said. 

“Last year, we placed vast amounts of trust in our governments, scientists and health and emergency service workers during the initial waves of lockdown – and our trust was rewarded as we saw, in many cases, COVID-19 numbers settling, lockdown lifting and the resumption of most activities. The Ethics Index skyrocketed to a five-year high of 52. 

“However, 2021 has been a very different year. We have seen major fluctuations in approaches to managing the virus, stronger debate around when to lockdown – and when to open up, and we were all thrown by a new variant of the virus. It has been a tumultuous and anxious locked down year with greater uncertainty. It seems this is reflected in a dip in the latest Ethics Index which has dropped to 45.” 

Most and least ethical occupations and sectors 

Holding strong this year, the top three occupations for perceived ethical behaviour are fire services (net score 85), nurses (80), ambulance services (79). In fifth place, GPs registered a fall after a strong year in 2020, dropping from 80 to 71. 

At the bottom of the list for ethical behaviour are federal politicians (-22, down from -3), real estate agents (-14, down from -2), directors of foreign companies operating in Australia (-12, down from -4). Lawyers, state and local politicians and directors of foreign companies operating in Australia also sit in the bottom 10, and all saw drops compared to last year. 

The ethical behaviour of broad sectors also saw some significant drops this year.

Health (72), education (62) and charities/ NFPs (51) registered as the top three most ethical sectors. The biggest declines were registered for  government (5, down from 16) and mainstream media, which now sits at the bottom of the list (-17 down from -3). 

Corruption, influence and executive pay: Top ethical issues for corporate Australia 

Corruption continues to be the top issue relating to unethical behaviour in business (with 59% of respondents stating it as the top issue). Misleading and deceptive advertising increased from 45% to 51% to become the second leading issue, and company tax avoidance is the third top issue at 47%.

CEOs are seen as the most influential on ethics within an organisation (net score 71), then the board of directors (69) and senior management (64). The general workforce (12) and activist groups (7) are least influential.

Overall Australians see high levels of CEO pay (at $600,0000 and above) as increasingly unethical (net score of -28, down from -18 for companies of up to 5000 employees), with all CEO pay levels measured seeing drops in ethical perception 2021.

What next? 

The biggest ethical challenge in the next 12 months is expected to be balancing freedom of movement and individual liberties with ongoing efforts to contain the spread of COVID-19 such as mask wearing, social distancing, lockdowns, vaccination passports (54%, up from 44% in 2020).

Climate change is the top third future ethical challenge, after balancing the challenges of COVID-19, and increasing local manufacturing. Most Australians feel there is an ethical obligation for organisations to act on climate change, even if it reduces profits (87%), results in job losses (88%) or lower jobs in the future (88%). 

Motto said the results of this year’s Ethics Index serve as a firm reminder that ethics – one of the key tenets of good governance – must stay firmly on the radar, even in times of immediate crisis. “Even in times of turmoil, good ethics need to be upheld to help position us for what’s around the corner. Good ethical conduct is especially under scrutiny by the community and other stakeholders during crisis. It is during a crisis that your ethical or moral core is most exposed.” 

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