The World’s Most Ethical Companies? A Joke

An organization called Ethisphere has put out a list called “2009 World’s Most Ethical Companies”

There is nothing wrong with the list, but the basis on which it was put together is a bit naive and it appears to be troubled by several conflicts of interest. Ethisphere reports that the categories it used were Corporate Citizenship and Responsibility; Corporate Governance; Innovation that Contributes to the Public Well Being; Industry leadership; Executive Leadership and Tone from the Top; Legal, Regulatory and Reputation Track Record; and Internal Systems and Ethics/Compliance Program.

The list leaves off some important measurements and plays down affiliations that many of the companies have with Ethisphere.

The most significant problem whether the winning firms are members of the Ethisphere “Business Ethics Leadership Alliance.”  The executive director of the Business Ethics Leadership Alliance is Suzanne Hawkins. In addition to consulting for several blue chip companies on an independent basis, Ms. Hawkins draws on her experience as Senior Counsel, Legal Operations at General Electric Company and as a Director on the Board of the Association of Corporate Counsel to guide BELA and its members.

What kind of consulting does Ms. Hawkins do? Is she paid by any of the companies on the World Most Ethical Company list?  That would be “unethical.”

Fifteen of the companies that made the list are members of the Business Ethics Leadership Alliance. That looks a little a conflict.

There may be a number of reasons that it is inappropriate that firms like GE (GE), Dell (DELL), Starbucks (SBUX), and Weyerhaeuser should not be winners. But, the real trouble with the entire process is that it has the appearance of many of the corporations on the list “voting for themselves” due to the close ties with The Ethisphere Institute.

Too bad. It undermines what could have been a valuable undertaking.

Douglas A. McIntyre