The Business Ethics Blog

From today’s Washington Post comes a story about a company’s advertising of it’s place in a “corporate citizenship” ranking: Freddie Mac, Becoming a Model Corporate Citizen?

You’d think that being ranked the 38th best corporate citizen in the country wouldn’t be all that much to brag about.

But it is if you’re Freddie Mac, the McLean-based mortgage finance company that is struggling to clean up its books from a $5 billion accounting scandal.

In a news release last week, Freddie Mac crowed that it ranked higher than any other Washington area company that made Business Ethics Magazine’s list of “100 Best Corporate Citizens…”
…
Freddie’s news release didn’t mention its larger cousin across the Potomac, but it was issued a day after Fannie Mae said it would pay $400 million to settle charges by federal regulators stemming from its $10.6 billion accounting scandal.

Here’s the list. [Link updated Nov. ’08] What exactly is the value of such lists, you ask? Good question. One answer is that they give credit where credit is due: some companies manage to earn a hefty profit while at the same time treating people & the environment well, and they deserve to be recognized for doing so. Also, a move up or down the list from year to year can provide either a carrot or a stick to motivate better corporate behaviour. Of course, the methods used for arriving at such rankings is a difficult and controversial issue.
Two rules of thumb:
1) Always read the footnotes.
2) Look for patterns. The fact that company that ranks high on ONE list might be a very good thing, or it might be a fluke of the evaluation method. Companies that consistently rank high on lists employing different evaluative methods deserve serious praise.