Thursday, July 12, 2007

2007 World's Most Ethical Companies

The best companies in the long run do in deed value ethics.

"Ethics are absolute. Business ethics are relational. And ethical leadership requires a position of influence.

What does that mean? Certainly there are absolutes to business ethics, such as respecting employees and stakeholders, competing fairly and within the law, and being a responsible corporate citizen.

Companies routinely compete for recognition for their “corporate citizenship” or “best place to work” award. And predictably, a select few pharmaceutical companies, a handful of consulting and high-tech firms, and a couple of retailers appear near the top of the list.These lists are based only upon absolutes.

Not surprisingly, the companies that appear on those lists usually are from high net margin industries that can afford to invest in self-promotion, and may have a more vested interest in the awards than other companies. For example, the consulting firm that knows it will help them in the ‘war for talent’; the pharmaceutical company that wants to blunt criticism over patent practices or high prices; or the retailer that wants to attract the higher spending ‘ethical’ demographic shopper.

Yes, many of those companies truly are ‘ethical’—but those industries represent only a minority (less than 20%) of the overall industry of global business, commerce and workforce.

What about the rest of the economy? How can we accurately examine and compare business ethics practices and leadership when we only look at a small portion of the economic landscape?

Frankly, we can’t. We need to look at the relational context.
The absolutes are the necessary grounding for a company to have strong core values to build upon. The context is the environment in which a company operates, both geographically as well as industrially.
The best lens through which to view a company’s ethical leadership behavior is to examine a company compared to other companies in the same industry. Are they leading, are they following, or are they ignoring? And to be a leader, the company needs to have or build a competitive edge, such as size or technology, which allows it to be influential.

In assembling the 2007 rankings of the World’s Most Ethical Companies, the researchers and editors of Ethisphere examined more than 5,000 companies across 30 separate industries looking for true ethical leadership.

We looked for absolutes. We examined companies in relational context of their industries. And we looked for influential leadership that moved others to change or follow.

Companies were measured in a rigorous eight-step process and then scored against nine distinct ethical leadership criteria.Some may ask, “How can McDonald’s be on the list?” The answer is that the food service industry is the largest industry in the world—and McDonald’s has clearly stood apart in introducinghealthier food fare, sustainable packaging, food safety, and ethical purchasing practices.

The winners of the World’s Most Ethical Companies are the standouts. Each of these companies has materially higher scores versus competitors in their industries. Each forces other companies to follow its leadership or fall behind. Each uses ethical leadership as a profit driver. And each of these companies embodies the true spirit of Ethisphere’s credo: Good. Smart. Business. Profit."

No comments: