2011 ranking of the World`s most ethical companies



The Ethisphere Institute, a New York-based think-tank, has released its fifth annual ranking of the world's most ethical large companies. This year's list includes 110 companies in 38 sectors, all of whom stand out for having strong policies on ethics and enforcing them.

The list includes some of the world's largest companies, including General Electric, Statoil of Norway, Swiss Reinsurance, Target, Starbucks, General Mills and Ford.

Calgary-based Encana, is new to the list and the only Canadian company in this year's ranking.

The 2011 World's Most Ethical Companies rankings by Ethisphere magazine honor companies deemed to have demonstrated a commitment to ethical business practices. Honorees must demonstrate real and sustained ethical leadership within their industries and translate ethical words into action, Ethisphere says.

Ethics Count

Quoted in an Edmonton Journal article, U.S. insurer Aflac Ltd., on the list for five years straight, said its strong approach to ethics includes alerting investors to problems quickly.

'Bad news does not improve with age. The faster you get out anything bad, the better off you are.

'There is no set number of companies that make the list each year. Rather, the World's Most Ethical Company designation is awarded to those companies that have leading ethics and compliance programs, particularly as compared to their industry peers,' says Ethisphere.

'This year, there are 110 World's Most Ethical Companies. Of these companies, 36 are new to the list in 2011 and 26 companies dropped off from the 2010 list. These 'drop offs' generally occurred because of litigation and ethics violations, as well as increased competition from within their industry.'

It pays to be good

Investing in ethics is beneficial for any company, even in a recession, saysEthisphere. The below graph compares the 'WME Index,' or all publicly traded 2011 World's Most Ethical Company honorees, against the S&P 500 since the initial World's Most Ethical Companies recognition from 2007.

The selection process takes into account how well companies' ethics and compliance programs are aligned with corporate best practice, case law and guidance set out in the Federal Sentencing Guidelines.

The evaluation also considers companies' legal compliance and litigation track record, reputation in the marketplace, concrete examples of local, national, industry or gEthics Inside certificationslobal initiatives, governance and corporate citizenship, including environmental stewardship, supply chain engagement and corporate philanthropy.

The Ethisphere institute also awards Ethics Inside certifications to companies that go beyond legal requirements to cultivate and maintain an exemplary culture of compliance and ethics.

Ethisphere's rankings have some overlap with the EthicalQuote rankings by Swiss company Covalence, with PepsiCo making both lists. But IBM and Intel, which appeared first and second on the Covalence list, did not make Ethisphere's rankings.

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