Evaluating Good Corporate Citizenship

Article excerpt

Being a good company increasingly means more than just making a profit.

Social responsibility is no longer the enemy of good business: Increasing numbers of mutual funds are adding "social screens" to their investment criteria, such as whether the fund invests in businesses that are committed to work force diversity or to improving the environment. Though most business journals continue to trumpet the most profitable corporations, Business Ethics spotlights the best corporate citizens.

The top honor for 2001 goes to Procter and Gamble, which moved up from number four in 2000, Business Ethics reports in its March-April 2001 issue. The giant consumer products company scored high in the category of "service to international stakeholders," a measure of how well the company behaves in the 44 countries outside of the United States in which it does business. P&G "has been generous in international grants and gifts in these communities, including earthquake relief in Turkey, community building projects in Japan, plus contributions for schools in China, school computers in Romania, special education in Malaysia, and shore protection in France," according to the magazine.

Following P&G in the top 10 are Hewlett-Packard, Fannie Mae, Motorola, IBM, Sun Microsystems, Herman Miller, Polaroid, The St. Paul Companies, and Freddie Mac.

"The term 'corporate citizenship' is coming into broader use these days, as awareness grows that business has responsibilities beyond profits," write Business Ethics editor Marjorie Kelly and management professors Sandra Waddock and Samuel Graves. "There is no single indicator of good citizenship. It must be measured through lenses representing various viewpoints."

The magazine has been ranking corporate citizenship for five years, at first using data collected in-house, then in 2000 adding data from Kinder, Lydenberg, Domini & Co. (KLD), a social-research firm in Boston whose data serves as the basis for the Domini 400 Social Index. …