It is often said that ethics can be defined as doing the right thing even when no one is watching. But is ethics in business defined that simply? It is much more than a tally of good deeds and gold stars, and a checklist of benchmarks. So how can something that sometimes seems so subjective be measured?
Ethisphere Institute, dedicated to advancing and recognizing best practices in business ethics, does that measurement every year. The organization assesses companies’ ethics and compliance programs, and creates an impressive list of the World’s Most Ethical Companies.
Ethisphere’s framework and methodology were created using years of research and expertise from an advisory panel of leading attorneys, government officials, professors, and thought leaders in ethics and compliance. Companies considered for the honor receive a raw score based on survey questions, and then are put through “due diligence” — the panel scrutinizes documents and runs queries through the global Thomson Reuters database.
The assessment measures an organization’s performance in an objective, consistent, and standardized way by collecting a sampling of data in core competencies.
Based upon Ethisphere Institute’s Ethics Quotient framework, there are five core competencies that measure company ethics:
- Ethics and Compliance Program (25%)
- Corporate Citizenship and Responsibility (25%)
- Reputation, Leadership & Innovation (20%)
- Culture of Ethics (20%)
- Governance (10%)
Ethisphere describes an ethical company as one that truly goes beyond ethics mission statements and translates those words into actions. To achieve this, a company should:
- Promote ethical business standards and practices internally
- Comply with federal sentencing guidelines
- Abide by international labor, anti-trust and trade laws
- Lead their industries in compliance, corporate governance and social responsibility
Explore the rest of our Ethics Series, as we take a closer look at Ethics and Compliance Programs, Corporate Citizenship and Responsibility, Reputation, Leadership and Innovation and The Culture of Ethics — all elements of Ethisphere Institute’s Ethics Quotient framework.
Kennametal is proud to have ranked amongst the World’s Most Ethical Companies for a third consecutive year. If you’re interested in working for a company that makes Ethics a priority, visit our Careers Page for an open position near you!