Two Indian companies in world's most ethical list
Only two Indian organizations have made it to the coveted ‘World’s Most Ethical Companies List’ this year. Wipro Limited and Tata Steel Ltd. are amongst the 135 organizations that have been named the ‘Most Ethical’ by US-based Ethisphere Institute.
The think-tank has been publishing the ‘World’s Most Ethical Companies List’ annually since 2007, and according to the institute, these are organizations that “...recognize their critical role to influence and drive positive change in the business community and societies around the world and work to maximize their impact wherever possible.” This year, a total of 135 companies from 23 countries and 57 industries were selected to be a part of the list, amongst which, there are twelve 12-time honourees (i.e., companies that have made it to the list each year since its inception) and fifteen first-time honorees. The companies that have been included in the list outperformed the large-cap sector over five years by 10.72% and over three years by 4.88%, Ethisphere said.
The list emphasizes the importance of being ethical in today’s polarised world and says that companies have increased their role in the society in the past year, “Values-based leadership leaped to the forefront of business strategy, and companies increasingly discussed their purpose in broad, community-focused terms. Diversity and inclusion, investment and long-term commitment, and constructive use of a company’s voice are now the hallmarks of what stakeholders are expecting, and investors are rewarding.”
Ethisphere Institute’s Ethics Quotient (EQ) framework makes the foundation of the assessment process, and it “offers a quantitative way to assess a company’s performance in an objective, consistent and standardized manner.” The EQ is based on scores from five categories: ethics and compliance program (35 percent), corporate citizenship and responsibility (20 percent), the culture of ethics (20 percent), governance (15 percent), and leadership, innovation, and reputation (10 percent). Regardless of whether they make it to the list or not, all companies that undergo the assessment receive their scores. The list names ‘Honouree’ companies who will be felicitated in an event in New York on March 13, where Pepsico Chairperson and CEO Indira Nooyi will deliver the keynote address.
A vast majority (106 of 135) of the organizations are American. As far as the performance of Indian companies goes, in 2017 as well, Wipro and Tata Steel were the only two Indian organizations that were a part of the list. However, in the preceding years, in addition to these two, Tata Power Company Limited (in 2015 and 2016) was also a part of the list. In 2014, Wipro and Tata Power Company were the only ones on the list. You can view older editions of the ‘World’s Most Ethical Companies List’ here.
So what do these companies have in common, and what makes them more ‘ethical’ than their peers? Timothy Erblich, CEO, Ethisphere, says, “Over the last 12 years, we have repeatedly seen that those companies who focus on transparency and authenticity are rewarded with the trust of their employees, their customers, and their investors. While negative headlines might grab attention, the companies who support the rule of law and operate with decency and fair play around the globe will always succeed in the long term.”
Other well-known organizations that made it to the list are:
- General Electric (GE)
- Manpower Group
- Marriott International
In a statement, Erblich says, “Companies recognized by Ethisphere in 2018 had record levels of involvement with their stakeholders and in their communities around the world. Measuring and improving culture, leading authentically, and committing to transparency, diversity, and inclusion were all priorities... Yes, 2017 brought profound changes. What doesn’t change is that values-based leadership and commitments to ethical business practices both pay dividends.”
You can view the entire list and read the statements issued by Dell, Volvo, Microsoft, and Grupo on being a part of the list here.