FTSE 100 companies are failing to outline to investors how they are measuring their ethical performance, despite making bold claims in their annual reports.

A study conducted by the Chartered Institute of Internal Auditors showed that 91 per cent of FTSE 100 firms referred to business ethics and integrity in their annual statements, yet only 8 per cent provided a specific metric of their company’s ethical performance.

Some of those measures of ethical performance included indicators of employee awareness of ethics, and industry-specific measures, such as supplier and factory visits.

Some 56 per cent of the FTSE 100 stated in their latest annual report that they have an ethical code or policy but only 3 per cent of companies provided information to demonstrate that employees had read and understood the code.

The study revealed that 4 per cent of companies provided figures to show what proportion of their workforce had undergone some training on ethical standards, while one company said it had monitored employee awareness of ethics, but omitted to explain how.

The body said in its report that the low level of reporting of performance metrics left investors with little idea of how companies are protecting themselves from exposure to corporate scandals and reputational damage.

Ian Peters, chief executive of the Chartered Institute of Internal Auditors, said, ‘In a large, complex and often international business, like a FTSE 100 company, senior management cannot possibly hope to keep an informal handle on the ethical climate of the whole business.’

He continued, ‘What gets measured, gets done, so the lack of simple metrics on companies’ ethical standards should be a matter of concern.

‘It suggests that either companies don’t take ethics seriously, or they think investors don’t – and the latter is increasingly unlikely to be the case.’