The World's Most Ethical Companies

 Published On: Jan, 2014 |    No of Pages: 20 |  Published By: MarketLine | Format: PDF
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Introduction

The annual World’s Most Ethical Companies list is compiled by the Ethisphere Institute, an “independent center of research, best practices, and thought leadership that promotes best practices in corporate ethics.”The 2013 list contains 140 companies from various industries. A number of companies have appeared on the list every year; seven of these are talked about in more detail in this case study

Features and benefits

* This case study looks at the founding and activities of the Ethisphere Institute, and how it compiles its annual World's Most Ethical Companies list.
* The case study also looks at some companies that have been included every year, how they are ethical and any unethical activity.
* The case study looks at why ethical business activities might be beneficial to a company, and how it affects both employees and consumers.

Highlights

The Ethisphere's Ethics Quotient score is given to companies based on their Ethics & Compliance program; Reputation, Leadership & Innovation; Governance; Corporate Citizenship & Responsibility; and Culture of Ethics.
The 2013 list is made up of 140 companies from over three dozen industries, down from 2012's 145 companies. 40 are headquartered outside the US and 15 have been on the list every year since its inception in 2007.
Starbucks is the only company in the restaurants and cafes industry to be included. However, the company experienced controversy when it was reported in 2012 that the company had only paid £8.6m (approximately $13.6m) in UK tax over 13 years in which revenues reached £3.1bn (approximately $4.9bn).

Your key questions answered

* How does the Ethisphere Institute compile its list of Most Ethical Companies?
* Have any companies been included on the list consistently? Which companies?
* How do companies benefit from conducting business ethically?

OVERVIEW
Catalyst
Summary
THE ETHISPHERE INSTITUTE COMPILES A LIST OF THE WORLD’S MOST ETHICAL COMPANIES ANNUALLY
‘Ethical’ is defined as “honorable”, “honest”, and “virtuous”
The Ethisphere Institute evaluates companies and benchmarks them
Ethisphere initially identified four areas of research which it wanted to pursue
Ethisphere began as a magazine founded by Alex Brigham in 2007
Ethisphere Institute publishes a quarterly magazine
ETHISPHERE’S WME RECOGNIZES COMPANIES THAT EMBODY ITS CREDO: GOOD. SMART. BUSINESS. PROFIT.
The WME list is compiled based on five core categories
Ethics and Compliance Program
Reputation, Leadership, and Innovation
Governance
Corporate Citizenship and Responsibility
Culture of Ethics
The methodology also uses public information and other governance lists
The list is more competitive than other years, and includes more foreign-headquartered companies
Many companies recognize the various advantages of being included in the WME
Aflac is a Fortune 500 company which places importance on charitable donations and diverse workforce
American Express values new leaders, historic preservation, and community service
Fluor’s Corporate Social Responsibility (CSR) activities are diverse
General Electric focuses on Energy and Water, Health, Governance, and Resource Management
Milliken & Company focuses on sustainable products, responsible manufacturing and supporting charities and communities
Starbucks is the only company in the restaurants and cafes industry included in the WME
Rabobank was included in WME 2007-1012
ETHICAL BUSINESS PRACTICES ARE IMPORTANT TO CONSUMERS AND ATTRACT EMPLOYEES
Happier employees are more productive
Many consumers care about companies’ ethical activities
CONCLUSION
Companies are increasingly aware of the importance of ethical business practices, and its various benefits
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