A firm’s culture can predict how much market value that firm will create for stakeholders. Researchers have found that companies with ethical cultures significantly outperform other companies in stock value. In fact, researchers have shown that a firm’s culture is the strongest predictor of how much market value that firm will create for shareholders’ investments.
A 2012 Great Place to Work® Institute report shows the stock price growth of the 100 firms with the most ethical cultures outperformed stock market and peer measures by almost 300 percent, and more recent studies have also confirmed this. Yet, as I’ve posted about before, in at least half of our workplaces, employees report seeing unethical or actual illegal practices (Ethics Resource Center). Lapses in ethics are costly, not just in loss of trust and erosion of confidence on the part of employees, customers and the public, but in dollars as well.
In the last ten plus years, billions of dollars have been paid in fines as a result of ethical breaches by companies from WorldCom to Enron, not to mention almost all of the large Wall Street banks. Wells Fargo’s recent debacle in which 5