242/ PART 3 I MOVING FROM AN IDEA TO AN ENTREPRENEURIAL FIRM
including regulations spawned by the Sarbanes-Oxley Act of 2002. We provide
more information about the Sarbanes-Oxley Act in Chapter 10.
Against this backdrop, the following sections discuss several of the most
important ethical and legal issues facing the founders of new firms.
Establishing a Strong Ethical Culture for a Firm
One of the most important things the founders of an entrepreneurial venture
can do is establish a strong ethical culture for their firms. The data regarding
business ethics are both encouraging and discouraging. The most recent
version of the National Business Ethics Survey was published in 2009. This
survey is the only longitudinal study that tracks the experiences of employees
within organizations regarding business ethics. According to the survey,
49 percent of the 2,852 employees surveyed reported that they had observed
misconduct or unethical behavior in the past year.
Of the employees who observed misconduct. 63 percent reported their
observation to a supervisor or another authority in their tirm.3 The 10 most
common types of misconduct or unethical behavior observed by the employees
surveyed are shown in Table 7.1.
While the percentage of employees who have observed misconduct or
unethical behavior (49 percent) is discouraging, it’s encouraging that 63 percent of
employees reported the behavior. According to the survey, the maionty of employ-
ees also have a positive View of their leaders’ transparency and accountability. A
total of 80 percent said they were satisfied with the information they were getting
from top management about “what`s going on in my company.” Seventy-four
percent said they trusted that top management would keep their promises and
commitment. A full 89 percent said top management talks about the importance
of workplace ethics and "doing the right thing.” And when asked if they believe top
managers would be held accountable if caught violating the organizations ethical
standards, 82 percent said yes.4 Overall, these numbers are heartening.
TABLE 7. I. PERCENTAGE or U.S.Wo1u