Business ethics

It’s no secret that I don’t trust big corporations in general, even if in the specific I think some are okay. The problem is that the ones that are bad are so very bad that they taint all big business. Take a look at my posts tagged “Corporate Greed” for what most annoys me.

The modern business paradigm rewards greed, and that, in turn, encourages behaviours that are unethical, immoral and even illegal—as long as profit is maximised and you don’t get caught, anything goes. There are, of course, businesses big and small that take a different approach, trying to act with integrity and solid ethics. Some even do a pretty good job of meeting such positive goals.

How can the rest of us tell? Third parties can help.

There are many different rankings of businesses based on various criteria, and I was reminded of that yesterday when I saw a story saying that the world’s “most ethical businesses” had been “revealed”. It turns out it’s from a New York City-based outfit called “Ethisphere” which, quite frankly, I’d never heard of (even though they’ve produced rankings dating back to 2007).

I never take assertions like a ranking of the “world’s best” anything without checking out the details. Not only are the rankings legit, to my mind they make excellent benchmarks for investors and would-be employees.

They ranked 145 companies throughout the world with 43 based outside the US (there were only two Australasian companies, both Australian banks: Westpac and National Australia Bank, which owns the Bank of New Zealand; ANZ dropped off the rankings this year). Companies are ranked using a series of multiple choice questions built on five main categories, which are weighted (the questionnaire is available online).

Two of the categories caught my eye: “Corporate Citizenship and Responsibility” (25% of the score) and “Culture of Ethics” (20% of the score). While all of the criteria are related to good, transparent and sustainable business practices, these two categories highlighted what to me is the very opposite of what I so often criticise in businesses.

But there are other considerations that people often make. For example, the Human Rights Campaign, the largest GLBT political organisation in the US, produces a “Corporate Equality Index” every Northern Hemisphere autumn. In their current Index, they introduced more stringent criteria regarding transgender health benefits, and yet 189 companies still achieved a perfect 100% score, including ten of the top 20 Fortune 500 corporations. When the Index began ten years ago, most companies were listed in the middle rankings, but now the majority of companies have a score above 80%.

So, what use are such rankings? They provide a useful tool for people looking for companies that aren’t evil, whether to invest in or to work for or to patronise. For example, Exxon-Mobil has a negative 25 ranking on the HRC index, so I won’t buy petrol (or anything else) at Mobil stations in New Zealand so that none of the money I spend in this country makes it back into the USA and the greedy mitts of Exxon-Mobil.

Ultimately, knowledge really is power, and the more information we have about big business (or governments…), the better. These rankings show that behaving ethically is good for business. It’s up to all of us to ensure they don’t forget that.