By Haddon Libby
Honesty and integrity: Two qualities that most of us would like from the businesses that we patronize and spend our hard earned money at.
For the last ten years, the Scottsdale, Arizona based Ethisphere Institute has recognized the most ethical companies in the world. Of the 134 companies that received this recognition, 102 are based in the United States.
To be one of their awardees, a company must ‘aggressively’ foster a business culture of ethics and provide the oversight necessary to insure that the company does what it says that it does.
Only one car company made the list – Ford. Many of their competitors have been involved in scandals for price fixing, unsafe vehicles, cheating on emission standards and other unseemly behaviors.
Banking is another business where only one American company with a local presence made the list – U.S. Bank. Worth noting, there are approximately 6,800 banks in the United States.
While banks may not have made the list, two credit card companies did – VISA and MasterCard.
The payment and staffing industry was well represented with Manpower, Paychex and TSYS.
The insurance industry had surprisingly robust representation with Aflac, Allstate, The Hartford, Arthur J Gallagher, Principal Financial and USAA.
The money management industry has been under scrutiny for the way that it charges fees on its clients yet CUNA Mutual, MassMutual, Northern Trust, TIAA and Voya walked the walk while others just talked.
In a bit of a surprise, only one philanthropic organization made the list – The Nature Conservancy.
Technology companies like Cisco, Dell, Intel, LinkedIn, Microsoft, Symantec and Texas Instruments embraced and enforced a culture of strong ethics yet Apple, Google and Qualcomm were not present.
While Coca-Cola is one of the most notable brands in the world, it was Pepsico that was amongst the most ethical companies. Other notable brands included Starbucks, Target, Kellogg, Levi Strauss, Petco, T-Mobile, L’Oreal, General Electric, UPS, Colgate-Palmolive, Hasbro and Waste Management.
Fields where you would not expect representation were the real estate and construction industries yet CBRE, Granite Construction, Jones Lang LaSalle were present.
While no airlines made the list, hoteliers Marriott and Wyndham as well as cruise lines Holland America and Royal Caribbean made the list.
While some regional health care providers made the list, none serving California were mentioned.
Looking at the dark side of business, Monsanto has been consistently ranked as one of the least ethical businesses in the world due to its production of genetically engineered seed, a business practice of unfairly suing small farmers for patent infringement as well as other anti-competitive business practices that hurt small farmers while potentially damaging the food supply.
Haliburton is another company that consistently ranks poorly for an assortment of practices that include fraud, doing business with rogue nations and exposing employees to hazardous materials and working conditions.
Goldman Sachs has been widely criticized for their role in the financial crisis as well as business practices that led Matt Taibbi of Rolling Stone to say that Goldman “is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
While these are three of the worst actors in business, Philip Morris, Bank of America, AIG, Koch, Sears, Comcast, Chevron, Pfizer and Wal-Mart are just a few of the other unethical companies profiting via business practices that are questionable, unethical and often illegal.
While you and I cannot avoid all of these ‘bad’ companies in our day-to-day lives, we can encourage good behavior by frequenting local businesses and larger businesses that are recognized as having some of the best and most ethical practices.
In the event that you want an ethical, honest and transparent investment advisor, reach out to Haddon Libby who is an Investment Advisor and Managing Director at Winslow Drake via 760.449.6349 or HLibby@WinslowDrake.com.