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To be sure, public trust is declining, not only within companies, but across many of our institutions—government, the news and other media, nonprofits, the major professions and educational institutions—but the focus of our concern here is the eroding trust of employees in their own companies and their leadership.

The unwillingness of employees to report misconduct or volunteer their good ideas for helping their companies to improve products and services lies in their lack of trust that good will come from speaking up. Their mistrust, as Detert and Edmonson found, may be a result of their own personal experience, their knowledge of the negative consequences suffered by others who spoke up, or a culture of collective myths, which may be rooted in fact or only in their fears.

In our first blog (January 1, 2008), we asked, Why do employees continue to remain silent in the face of corporate ethical lapses? We cited data from the Ethics Resource Center’s 2007 National Business Ethics Survey which found that more than half (56%) of employees witnessed what they believed to be serious misconduct in the previous twelve months, and nearly half of them (42%) refused to report that misconduct to anyone.

New research by Wharton School Management Professor Maurice Schweitzer and three colleagues documents how ambitious corporate goal setting can cause more harm than good. Moreover, he concludes that not only is it overprescribed but it helps to drive destruction of an organization's ethical culture increasing risk and corruption.

The systemic erosion of ethics and responsibility in business and individual decision-making has brought the world economy to a virtual standstill. Algorithmic risk management designed to ignore real world problems, short-term profit driven decisions, extremist free market fundamentalism, and shareholder primacy at the expense of other stakeholders, have divorced business leadership from standards of good faith, wise stewardship and care for the public interest.

Trust the essential element of credit-based market transactions has become a rare commodity. Indulgence in the race-to-the-bottom, profit-at-all-costs, instant gratification mentality of the entitlement culture, can no longer be cloaked in terms of capitalism and the free market. The blame for where we are can be shared by everyone in government and industry who acted only in their immediate self-interest and in apparent belief that the bubble would never burst. Is it any wonder that a recent Washington Post story was headlined, The End of American Capitalism?

The unwillingness of employees to report misconduct, even anonymously to corporate ethics offices or external hotlines, poses a continuing risk to companies, as I observed in my posting in January, "Dangerous Silence"

Some time afterwards, I had lunch with Norm Augustine, the retired chairman and CEO of Lockheed Martin, and we discussed that topic. He brought up a salient point, and I asked him to post it on our blog.

The Ethisphere Institute (http://ethisphere.com/influential/ ) recently compiled a list of the 100 Most Influential People in Business Ethics ranking executives' “influence” based upon their involvement in government rulemaking, company practices, corporate responsibility and sustainability efforts and many other things. The final list, released last month, is notable primarily because it includes a number of privacy protection advocates including Ethisphere’s top honoree, Neelie Kroes, the European Commissioner For Competition

This week, IBM released a study on Businesses Seeking Growth through Social Responsibility available at: www.ibm.com/gbs/csrstudy.

IBM surveyed more than 250 business leaders globally to gauge how deeply Corporate Social Responsibility (CSR) has penetrated the core of corporate strategies and operations to discover that two-thirds of them are focusing on CSR activities to create new revenue streams. However, IBM found fewer than one-quarter of those surveyed believe they understand their customers' and other stakeholders CSR expectations well. This should be an alarming finding in today’s economic environment when customer expectations - and clout - are an increasingly important business dynamic.