2Sustain

Ethisphere has released its 2010 list of the World’s Most Ethical (WME) Companies, and again this year, I was struck with the U.S. Ethisphere Institute’s findings which  show, quite clearly,  that it does pay to be ethical.

As the graph below illustrates, even during a recession, the “WME Index” (which includes all publicly traded 2010 WME Companies) beat the FTSE 100 and the S&P 500.

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, and this year Ethisphere found 100 companies that made the cut. 26 companies are new to the 2010 list; 24 companies dropped off from the 2009 list. (more…)

With news of the Madoff scandal dominating the headlines once again, it’s no surprise I’m thinking about ethics today. Remember my post from April, the one in which Ethisphere Magazine showed us that over the past five years, the world’s most ethical corporations have significantly outperformed the S&P 500 in terms of average stock growth percentile? Ethisphere Magazine made a convincing argument that it pays to be ethical, but why is this? Are employees more productive if they’re working for an ethical company? Maybe ethical companies foster greater loyalty?

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The dictionary defines ethics as “the principles of conduct governing an individual or group; a set of moral issues or aspects (rightness).”

But, how does that definition translate into every day business practice? What role do ethics play in today’s ultra-competitive marketplace? Or, to put it a little more bluntly, does it pay for a company to be ethical?

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