Our evaluation of a company’s reputation looks carefully at the perception of the company’s brand among stakeholders. We give an applicant credit for third-party recognitions indicating positive stakeholder perception. For example, we consider awards and accolades garnered as well as inclusion on indices related to governance, ethics and compliance, culture, environmental practices, citizenship, or social responsibility.
We off-set the credit given for third-party recognitions with any negative reputational issues faced by an applicant. Specifically, we conduct a review of publicly available information (e.g., public filings and Dow Jones Factiva business information and research tool) to understand any negative perceptions caused by an applicant’s legal compliance, litigation, environmental, or other ethical issues. This review has a five-year look-back period. Ethisphere bases its timing for the look-back period on the timing of an issue’s resolution. For example, if the conduct occurred in 2005, but the issue is settled in 2020, Ethisphere would consider the relevant timing to be 2020 for purposes of the five-year look-back period.
While evaluation of any particular issue is necessarily objective, Ethisphere considers the following factors in its evaluation: (i) how long-ago the conduct at issue occurred and when it was resolved, (ii) the seriousness of the conduct or issue, (iii) actions taken by the applicant to address the issue, and (iv) how the issue impacts the applicant’s reputation. If the issue is severe enough, it alone can exclude a company from being included on the World’s Most Ethical Companies List. In such a case, we will fully score the applicant’s submission and provide the Analytical Scorecard and feedback. We will also inform the applicant that, regardless of its performance within our evaluation process, the reputational issue precludes it from being included as one of the World’s Most Ethical Companies.
Given the necessary subjectivity of this reputational evaluation, we are happy to answer any questions you may have at [email protected].