Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Determining the “best” companies

Posted by David Kassel on May 29, 2007

What makes a company a good one, a better one, the best one?

 Last week, The Boston Globe came out with its annual Globe 100, which the paper describes as the 100 best companies in Massachusetts. 

 The Globe ranks the companies based on financial measures such as return on average equity, total revenues and and one-year change in revenue and profit margin.  Fair enough, but does that make the firms that garner the highest rankings in these categories the “best” companies?  “Best” certainly has a connotation that goes beyond financial performance alone and passes into the realm of ethics.

In fact, corporate ethics have become a topic of growing interest in recent years, even sparking new centers of academic research, such as the Kennedy School’s Corporate Social Responsibility Initiative, the Center for Corporate Citizenship at Boston College , and the Center for Responsible Business at the University of California Berkeley.

It would therefore seem that when newspapers or other organizations attempt to rank the best companies in their regions, they should take into account at least some corporate responsibility or ethics measures.

In fact, that’s what The London Sunday Times does when it publishes an annual Corporate Responsbility Index, which is compiled by a nonprofit, UK-based organization called Business in the Community.  The 2006 CR Index was published by The Times earlier this month.  The Index ranks the 100 most “responsible” companies in Britain based on measures of environmental and social impact.  The ranking process is a rigorous one that requires companies to fill out a survey that takes up to two months to complete, and requires site visits to the firms and internal auditing.

The CR Index surveys companies on a range of social and environmental issues.  Companies are asked, for instance, whether they have a certified environmental management system in place that meets the requirements of the International Organization for Standardization (ISO), an international standard-setting body, and whether they ask their suppliers to provide information on their environmental performance.  They are asked about their workplace safety measures and other initiatives for the well-being of their employees.  They are also asked about how they engage the marketplace, including the safety of their products and the amount of product information and labelling they provide. 

 I asked The Globe for comment as to whether it would make their own rating system more comprehensive if the paper were to include at least some of the corporate social responsibility measures used in the CR Index.

Caleb Solomon, The Globe’s business editor in charge of The Globe 100 (and who has just been appointed a deputy managing editor for Page One), responded with the following statement:

These are all important and interesting subjects. It’s difficult to see how
to incorporate them into the existing Globe 100, which gives us the
opportunity to rank companies across industries based on the same financial
measures. But augmenting our coverage with some social measures is
something we’re looking at.

 I also thought it might be useful to get a comment on the topic from the Kennedy School’s CSRI prople, Boston College’s CCC, and the Center for Business Ethics at Bentley College.  I contacted all three, but no one responded.

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