The Right Way

Recent studies show that as much as 75 percent a company’s value relates to its intangible assets, including its reputation. That’s part of the reason more and more executives are taking ethics seriously.

That may be hard to believe given headlines over accounting fraud at Japan’s Olympus, onerous workplace conditions at Apple operations in China, the Goldman Sachs executive’s resignation letter, and how banks are handling mortgage foreclosures in the U.S.

The World’s Most Ethical (WME) Companies designation recognizes companies that go beyond making statements about doing business “ethically” and actually translate those words into action. WME honorees not only promote ethical business standards and practices internally, but they also exceed legal compliance minimums and shape future industry standards by introducing best practices today. The winners also have policies encouraging employees to report wrongdoing and supporting them when they do.

The award has been given by the Ethisphere Institute for the past six years.. Ethisphere evaluates 5,000 global companies, including all members of the Standard & Poor’s 500 index, on reputation, corporate citizenship, culture and other qualities.

Ethisphere Executive Director of Ethisphere Alex Brigham said the competition has intensified every year. “This year’s winners know that a strong ethics program is a key component to a successful business model, and they continue to scrutinize their ethical standards to keep up with an ever-changing regulatory environment,” Brigham said.

This year, a record 145 companies made the list, covering more than three dozen industries, from aerospace to wind power. The 2012 list of the World’s Most Ethical Companies includes these from insurance: Arthur J. Gallagher & Co.; Hartford Financial Services Group; Aflac Inc.; Blue Cross Blue Shield of North Carolina; Blue Shield of California; Wisconsin Physicians Service Insurance Corp.; Sompo Japan Insurance Inc.; Progressive Group of Insurance Companies; Tokio Marine Holdings Inc. and Swiss Re.

It is tempting to be cynical and point out, for instance, that there are no Wall Street firms on the list; also no Chinese companies. But it is easy to be a cynic and find fault with companies on a list of the most ethical. No company is perfect.

But these insurers and all of the firms making an extra commitment to ethics deserve recognition and encouragement. It’s the right thing to do.