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BF: What factors or qualities are considered paramount for the Ethisphere Institute to designate a company as ethical?
AB: More than 70 criteria make up a company’s Ethics Quotient score. Critical factors include:
1. How robust is the corporate compliance and ethics program? Examples include the quality of its code of ethics and related ethics training and communication; effectiveness reporting and whistleblower systems; and tone from the top.
2. Environmental impact, where criteria may vary by industry; sustainability initiatives, reporting and transparency.
3. Industry leadership in ethics, citizenship and responsibility; we are looking for standard setters and early adopters versus followers.
4. Clean legal history, or in case of past violations, evidence of adequate response and significant efforts made to avoid future infractions.
BF: Do any specific industries have large numbers of ethical companies?
AB: Consumer products and food industries traditionally have been topping the charts for corporate ethics and citizenship, perhaps due to consumer and peer- pressure factors. Some companies were on the forefront of responsible business long before it became an accepted practice. For example, Kellogg’s pioneered recycled packaging in 1906.
The technology sector, including computer and electronics manufacturers, software developers, Internet and telecom companies, also is noteworthy for a large number of ethical companies. Many of them are relatively young companies, whose cultures have been shaped or influenced by their founders, many of whom are known supporters of responsible business practices.
BF: How can a company with a tight budget improve its ethical standing?
AB: Companies should treat spending on ethics as investments into brand equity versus cost to be cut. Many pragmatic steps can be taken without breaking the bank. The cost of creating a best practice code of ethics and related training and communication program is miniscule compared to what some companies spend on brand advertising. While publishing glossy citizenship reports can be expensive, some of them really disappoint by the lack of hard facts. Greater transparency and disclosure don’t really require extra budgets; they require an executive will. Likewise, strong tone from the top needs engaged, visible and committed executives. Finally, walk the talk.
World’s Most Ethical Companies
The Ethisphere Institute, a think tank dedicated to the best practices in business ethics, recently announced a list of the World’s Most Ethical Companies. Entries came from more than 100 countries and 35 industries, and 99 companies made the final cut.
A sample of honorees from the United States include: Honeywell International, The Aerospace Corporation, Nike, Patagonia, Dell, Hewlett-Packard, Xerox, Oracle Corporation, Symantec, Mattel, General Electric, Intel, Texas Instruments, Duke Energy, Wisconsin Energy, American Express, The Hartford Financial Services, The Principal Financial Group, General Mills, Kellogg Company, PepsiCo, Safeway, Trader Joe’s, International Paper, Target, Cleveland Clinic, Johns Hopkins Hospital, Premier, Marriott International, Caterpillar, John Deere, Milliken, Aflac, Google, Zappos.com, Time Warner, Jones Lang LaSalle, McDonald’s, Starbucks, Best Buy, Gap, Ten Thousand Villages, Avaya, Cisco Systems, T-Mobile, and United Parcel Service.
Some international recipients are: BMW, Toyota Motor, HSBC, Rabobank, Standard Chartered Bank, Accenture, Henkel, Unilever, Statkraft, Accor, Thomson Reuters, Royal Philips, Kao, Petro-Canada, AstraZeneca, Novartis, Novo Nordisk, Novozymes, IKEA, Marks & Spencer, Vodafone, and Nippon Yusen Kaisha.