In this module we’ve covered a range of different corporate ethical challenges, legal requirements, and opportunities to contribute to social good. Every year, a company called Ethisphere provides a through review of businesses seeking to gain recognition for being upstanding corporate citizens. (See the full list of honorees.)

The review process captures company performance in five areas, but in order to be honored, the companies must demonstrate that they are addressing ethics and social responsibility holistically. The five factors, which are nicely aligned with the topics of this module, are described below, each with a brief description of how the companies show compliance.

Ethics and Compliance Program

We discussed this topic in our focus on company policy, along with the important role of executive leadership in supporting and following the policy. This category reviews the ethics program structure, responsibility, and resources, and evaluates the program oversight and tone among top management in the company.

In the following video, Walmart’s chief ethics officer, Cindy Moehring, explains how the compliance and ethics team makes this sophisticated program simple:

Corporate Citizenship and Responsibility

We’ve looked at a number of ways in which companies can be good corporate citizens and “give back” to society and stakeholders. In this category, Ethisphere evaluates a wide range of a company’s performance indicators associated with sustainability, citizenship, and social responsibility, with special attention to areas such as environmental stewardship, community involvement, corporate philanthropy, workplace impact and well-being, and supply chain engagement and oversight.

In the video below, Executive Vice President of Government Affairs, General Counsel, and Corporate Secretary of PepsiCo Tony West discusses the responsibility to society that businesses have:

Culture of Ethics

We also discussed the importance of building a culture of accountability within an organization. In this area the Ethisphere evaluation measures an organization’s efforts and success at establishing an ethical tone throughout every level of the company.

In the following video, Tony West of PepsiCo shares insight on sustainable ethical cultures, employee values, and their persistence over time:

Governance

We discussed the importance of executive leadership when it comes to monitoring and promoting a quality company culture. This category of the Ethisphere review examines the availability and quality of systems designed to ensure strong corporate governance, which not only includes executive managers, but also the company’s board of directors.

CH2M Hill board member Georgia Nelson discusses the positive effects of board diversity on corporate governance and innovation in the video below:

Leadership, Innovation, and Reputation

The companies that make Ethisphere’s list of honorees are visibly presenting themselves in an ethical context, which supports their reputation among all stakeholders. This category evaluates the company’s ethical reputation in the marketplace and among key stakeholders such as employees and customers.

In the video below, the corporate communications manager of Aflac International, John Sullivan, explains how ethical practices reflect on the business:

The world’s most ethical companies outperform their peers in the stock market.

The chart above shows the stock performance of these highly ethical companies relative to their peers. It is clear that leadership in ethic results in market leadership, as well.