First the good news. The number of formal ethics and compliance programs is on the rise. And companies with well-implemented programs are doing more reporting.

The bad news, according to a new survey, is that ethical misconduct is on the rise and has now reached pre-Enron levels. During the past 12 months, more than half the employees surveyed said they had seen ethical misconduct of some kind. And more than two in five didn't report what they had observed as one in eight experienced some sort of retaliation.

The findings are in the Ethics Resource Center's 2007 National Business Ethics Survey. Polling a total of 3452 employees in the business, government and non-profit sectors, the survey found that 23 per cent of employees observed conflicts of interest, 21 per cent witnessed abusive or intimidating behavior and 20 per cent witnessed lying.

The report also found that over the past few years, the percentage of companies with weak cultures has returned to pre-Enron levels and the proportion of companies with strong ethical cultures has fallen to the historic average. Features of companies with weak cultures include lying to employees, abusive behavior, discrimination, lying to stakeholders, misreporting hours worked, safety violations, people putting their own interests ahead of the organization, improper hiring practices, sexual harassment, stealing, environmental violations, internet abuse, misusing confidential organizational information, altering financial records, bribes and altering documents.

According to the study, 10 per cent of employees felt pressure to compromise their ethical standards. And despite a rise since 2005 in the number of companies that have implemented comprehensive ethics programs. less than 40 per cent can say their programs cover all bases.

All this comes five years after Sarbanes-Oxley. Clearly, something is not working.