Every year, organizations invest millions of dollars to train employees to act ethically. Yet, quite often, the employees fail in this space, resulting in significant penalties — on both their company’s culture and their bottom lines.

Large corporations continue to have a significant number of misconduct cases against them based on their business practices analyzed by industry watchdogs. Penalties are imposed on them due to various kinds of improper professional conduct from financial reporting to bribery and cheating to sexual harassment, retaliation and discrimination. All of this can have major implications on the organization, including monetary loss, and more importantly, a loss in organizational reputation and integrity. A small piece of bad news can bring substantive harm to their reputation, and shareholders waiver in their company’s confidence. Though many organizations have established an ethics and compliance (E&C) hotline to encourage employees to raise their hands when they see any misconduct and advocate for policies to address them, the number of cases continues to grow.

So, why is it that even after spending millions of dollars in ethics training, organizations still fail to act ethically?

The root causes for failure primarily revolve around gaps in an organization’s culture, communication and training. Most of the organizations that have built guidelines for effective E&C programs articulate only the minimum regulatory standards required. These standards are designed primarily to assist judicial evaluation rather than to serve as models for high-quality programs that are effective. Following are some things that may be leading to unethical behaviors.

Unrealistic Goals

This is more of a cultural issue. If the organization sets unrealistic goals for their employees, they are tempted to take a path which deviates from the ethical path. This is commonly seen in sales-driven organizations, where salespeople are given an unreasonable quota to meet. Under pressure, they agree to meet their quota, and they give further commitments to their clients that they know cannot be met. Organizations, while building SMART goals, should focus on the “A” of SMART, which stands for “achievable” goals.


When it comes to training employees, organizations are expanding budgets to enhance and grow their training content. As a result, organizational leaders feel that their mission is accomplished. The purpose of developing a voluminous amount of training content is no doubt accomplished, but unfortunately, learning does not happen. In these organizations, the learning culture is biased toward a training mandate, and little to no focus is placed on whether actual learning took place. Thus, the training is seen as another mandatory chore and time-consuming activity. As remediation, organizations should focus on learning outcomes and not on volume. Another key aspect: Do not depend on a sole modality, which is most often web-based-training (WBT). Although, traditional WBT is scalable, it does not necessarily make it effective in establishing behavior change. Consider a blended model, such as in-person, instructor-led training (ILT). Though it can seem like a costly expense, it is more engaging and can have a more effective outcome. To keep the cost in control, consider blending WBT with virtual sessions or small team sessions supported by “in-a-box” discussion materials. The bottom line: Make the content intuitive to keep learners engaged. Remember the three M’s that are the pillars of powerful training content; content should be motivational, memorable and meaningful.

Consider using the following key design approaches to create an engaging and effective user experience that yields results and leaves the learner wanting more.

  • Instead of using theoretical content, consider designing content that engages learners with compelling stories, simulations and interactive exercises drawn from actual cases and events.
  • Engage learners with mobile microlearning to fit into busy schedules. This will accelerate learning and increase retention.
  • Tailor the training program for employees by role, function and risk exposure, emphasizing the importance of acting in accord with shared values, seeking guidance and providing peer support to act ethically and speak up.
  • Create mobile-ready content so that learners can access and complete th training on a device that works for them.
  • Regularly refresh content, as laws and guidelines are constantly shifting in an increasingly global marketplace. Evaluate training for effectiveness and relevance on an ongoing basis.
  • Wherever possible, ensure E&C awareness training is led by leaders with their teams. When leaders facilitate, they demonstrate their commitment to the activity and learn firsthand how employees view situations and what questions come up.
  • Ensure that leaders are sufficiently trained and have easy access to guidance on consistently and fairly responding to issues raised by employees and creating a speak-up culture.

The idea is to make the learners understand why it is important for them, and for their organization, to act ethically and what the consequences of misconduct are. For example, a recent study showed that those employees who are intentionally involved in misconduct do not clearly understand consequences for a substantiated violation. It is important for the training content to emphasize seeking guidance, being conscious of acting in alignment with organizational values and knowing the consequences for not doing so.


From a culture perspective, organizations prioritize offering strong customer service. The same amount of care needs to be given to internal stakeholders and employees — and that includes the ethics component. Often, employees spend majority of their working hours serving clients and then fulfill their technical job-related training to be compliant. No wonder the ethics — or compliance-related training — gets a “check-the-box” treatment. Training is happening, but learning is not. A less deadline-driven and more relevant approach will help ease the pressure.

To move away from the “check-the-box” mentality, some forward-looking organizations, of all sizes and from a wide range of industries, have started adopting modern ways to make E&C training a natural part of their culture and values. The E&C programs are not just an “add-on” feature of these organizations; Rather, they are designed to complement and support the organization’s strategic objectives. Organizations have started making efforts to fully understand their audience and its needs and why learning must address those needs and the preferences and interests of the learners.

The bottom line is that getting organizations to think and act differently about their E&C culture will improve not only workplace conduct but business performance, as the consequences of noncompliance (e.g., damage to reputation, losses in revenue, share price, productivity and legal fees) can be detrimental to a business. Forward-looking organizations will likely develop E&C programs that are primarily leader led, with leaders at all levels across the organization building and sustaining a culture of integrity.