Unethical behaviour can occur in any business but may go unnoticed for a long amount of time. The type of unethical behaviour, its gravity and the number of individuals involved, could mean that the future of the business is being harmed without any of the stakeholders realising it. Unethical behaviour is not easy to recognise due to the way businesses operate. When employees are hired, a certain amount of trust is placed upon them, requiring them to act in the interests of the company. Unfortunately, unethical behaviour is not limited to employees. Directors may also engage in unethical behaviour that benefits their interests or the views that they hold over their duty to the company.

What is unethical behaviour?

There are many examples of unethical behaviour that could take place in your business. Knowing what they are, can help understand the warning signs. Some examples are:

1. Discrimination: Discrimination could be taking place in the form of employee exclusion and bullying. The behaviour of employees towards another may be unfair, treating them as if they are inferior. A staff member may also discriminate during the hiring process. This means that they do not hire qualified applicants based on factors such as race, gender, age, or religion. Such behaviour may be breaching company policies. 

2. Misuse of customer data: Companies can collect a lot of information about their customers, sometimes, without their consent. In a survey, about 3 in 4 employees revealed they had access to data they shouldn’t have. This leaves a lot of room for individuals with ill intent to misuse this information for purposes other than what was initially intended. Examples include selling customer data to third parties or using the data to engage in targeted advertising without the customer’s express permission.

3. Insider trading: This is an illegal financial practice that involves trading stocks using non-public information. Insider trading is often difficult to detect, but it can result in significant losses for investors and may also result in criminal sanctions. Recently, the CEO of Unity sold his shares before making a controversial announcement. This caused a lot of people to speculate that insider information affected his decision. This kind of unethical behaviour can cause customers to lose faith and trust in an organisation. 

4. Bribery: Employees of any level can engage in bribery or corruption. This type of unethical behaviour may be done for personal reasons or for the interest of the company. For example, an employee completing a deal with an external supplier to create inflated invoices so they can get more money is an action taken for personal gain. There are other scenarios however, where employees or directors of the government may try to bribe government officials or government staff. This can take the form of direct payments, or more subtle incentives such as gifts, entertainment, or tickets to events.

5. Manipulating records: Employees falsifying records is unethical primarily because it undermines the trust that stakeholders place in the organisation. Employees who falsify records usually have something to hide. It could be unauthorised purchases or changes to financial performance so the employee meets their goals. Manipulating records to show a different picture can bring more investors in or allow the company to get a loan it may not have qualified for. This type of unethical behaviour can have serious legal consequences, which is why it needs to be detected and controlled quickly. 

unethical behaviour

Recognising the red flags of unethical behaviour

1. Lack of communication

A sign to look out for is employees not giving details about their tasks or financial information. This could be refusing to give accurate amounts or not being able to find important documents. They may decide to change suppliers or business partners without a clear reason. 

2. Abuse of power

An employee may be seen abusing their position of power to get away with things. For example, they may label harassment and bullying as “constructive criticism” and “feedback”. It is important to be able to recognise the difference between giving genuine advice for improvement versus attacking an employee due to discrimination. 

Employees may also use their position of power to commit nepotism. They may seem to evidently favour one candidate during the interview process which will then translate to them favouring that employee over others. This is why background checks are important, especially when signs of nepotism are present. 

3. Dishonesty 

It is always advised that tasks are delegated, rather than leaving one employee to handle all the important tasks. This is because it can be easier to spot dishonesty. An employee may be dishonest about the tasks and the process they followed to complete them. This can be detrimental, especially in today’s world, where security is a priority. If an employee looks constantly busy without clear outputs, this could indicate that they are not being very sincere about what their responsibilities involve. 

4. Lack of documentation 

Any type of business activity is always followed by some form of documentation. It could be an invoice, a Word document with more details, or even an Excel sheet. Something that proves the action an employee took and/or explains the reasoning behind decisions. If such documentation is missing, it may mean that the employee is not being fully transparent. 

5. Refusal to work with others

In a company setting, it is usually required that an individual can work alone or as part of a team. If they constantly refuse to work for other people, repeatedly finding excuses for not wanting to collaborate with other team members, may indicate that something is wrong. Sitting down and having a conversation with the employee can help uncover whether there is a personal issue or something more serious. 

6. Complaints from employees

Every employee complaint needs to be taken seriously. At the very least, the company should talk to the employee and get more details about the report and understand why they are making it and what happened. Complaints from employees can raise red flags about someone’s behaviour. Taking time to speak to employees can uncover a lot of problems that other stakeholders might not know about. 

Looking to uncover unethical behaviour?

At Polonious we help investigators uncover any unethical behaviour that may be taking place within your organisation. We make the whole process more efficient to ensure that staff can focus on core business tasks while the investigation is underway. Our workflows help businesses save both money and time, with our customers reporting a 38% reduced admin time. Book a demo to learn more about how our system can help you!