2020 World’s Most Ethical Announced

Ethisphere announced its 2020 list of World’s Most Ethical Companies today, and corporate ethics and compliance officers know what that means: a barrage of emails from the CEO and board asking, “Why aren’t WE on that list???”

This year Ethisphere honored 131 companies from 21 countries and across 52 industries. We can’t name all 131 here, but that is three more than the 128 honored in 2019. We should note seven companies that have been on the WME Companies list all 14 years of its existence. They are:

• Aflac
• ecolab
• Fluor Corp. 
• International Paper
• Kao Corp.
• Milliken & Co.
• Pepsico

Alas, Texas Instruments, which had been on the list every year prior, was not among the privileged few this year. Maybe the company didn’t make the cut; maybe it decided not to participate this year. I don’t know. Regardless, that short list of annual winners is a bit shorter this year. 

Ethisphere compiles its World’s Most Ethical list by having companies complete a detailed survey of their ethical values, business practices, corporate governance, and the like. That generates a lot of data worth studying, and eventually Ethisphere will publish one or more reports based on that information — but alas, that report isn’t ready today.

That said, Ethisphere did flag a few best practices from its WME honorees that are worth noting. Among them: 

• 67 percent of WME companies use a survey purpose-built for measuring ethical culture;
• 91 percent give third parties access to their hotlines and reporting mechanisms;
• 61 percent provide ethics-related training assistance and resources to their third parties;
• 57 percent go beyond having a third-party code of conduct and provide training, communications, and other resources to help third parties comply with their third party code; and 
• Nine out of 10 honorees have an established mental health wellness program in place. Which is nice, since the corporate grind drives so many of us nuts.

The WME companies will be feted, and those compliance practices mentioned above will be explored in more detail, at Ethisphere’s Global Ethics Summit happening April 1-2 in New York City. I’ll be there, looking for insight and free food. It’s an event worth attending for ethics professionals.

And for cynics out there who say devotion to ethics doesn’t bring any extra return, below is a chart of what Ethisphere calls “the Ethics Premium.” It charts the stock performance of the WME 2020 companies over the last five years, versus a general large cap index over the same five years. As you can see, those WME honorees outperformed the market by 13.5 percent.