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CEOs: Do Your Employees Trust You?

Chart: data points are described in article

CEO ousters for ethical violations -- such as fraud, bribery or misrepresentation -- are on the rise, according to a recent article in The Washington Post.

So are CEOs becoming more unethical or have shareholders grown less forgiving?

The Washington Post suggests a variety of reasons for the intense scrutiny of business leaders' ethics, from the 2008 financial crisis to the rise of social media.

Given the high levels of institutional distrust across society, many business leaders may feel like they're in the ethical hot seat more often these days. But how do most American employees feel about their own leadership?

Well, CEOs can take heart. According to recent Gallup research, 45% of U.S. employees rate the moral values of their CEOs, presidents or other business leaders as "excellent," 30% rate them as "good" and only 23% rate them as either "fair" or "poor."

At the same time, employees rate the moral values of their coworkers at 35% excellent, 43% good and 20% either fair or poor.

In short, CEOs outperform coworkers when it comes to employees rating their moral values as excellent.

Additionally, workers are much more positive about their company leadership and their coworkers than they are about the moral values of the country in general. In this same survey, just 17% say that the nation's moral values are excellent or good, while 36% say they are fair and 45% say they are poor.

One reason behind such trust in company leadership could be the large percentage of Americans who are employed in small businesses. Employees for smaller enterprises are naturally closer to their company's leadership and score higher when it comes to employee engagement.

Nevertheless, according to Gallup's annual updates, business executives rank near the bottom on a list of professions by perceived ethics and honesty. But, as noted, this distrust of executives doesn't seem to apply when workers rate their own leadership.

This could reflect the well-established pattern by which people are generally more negative when asked to rate things "out there" in the nation as a whole than when asked to rate the same things locally. We see this in ratings of Congress, crime, schools and the economy. In the same way, it may be that while there are negative stereotypes about other CEOs, one is less likely to apply those stereotypes to one's own company.

The primary challenge for most CEOs may lie not with their ethics and morality, but elsewhere, particularly when it comes to vision and communication. According to Gallup's recent State of the American Workplace report, only 22% of U.S. employees strongly agree that their company's leaders have a clear direction for their organization. And only 13% strongly agree that their organization's leadership communicates effectively.

It's no wonder, then, that most American workers are either not engaged (51%) or actively disengaged (16%). Our decades of workplace research show that there is a direct link between understanding a company's mission and purpose and employee safety, turnover and profitability.

The bottom line is this: Most American workers trust their CEO to do the right thing -- they just aren't sure their CEO knows where the company is going.

Want to know what your employees are thinking? Gallup can help you find out.


Ryan Pendell is a Senior Workplace Science Editor at Gallup.

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