UPDATED FOR 2015
At the heart of the evaluation and selection process for Ethisphere’s World’s Most Ethical Companies is Ethisphere’s proprietary rating system, the corporate Ethics Quotient (EQTM). The framework of EQ is comprised of a series of multiple-choice questions that capture a company’s performance in an objective, consistent and standardized way. The information collected is not intended to cover all aspects of corporate governance, risk, sustainability, social responsibility, compliance or ethics, but rather it is a comprehensive sampling of definitive criteria of core competencies. The EQ framework and methodology was determined, vetted and refined by the expert advice and insights gleaned from Ethisphere’s network of thought leaders and from the World’s Most Ethical Companies Methodology Advisory Panel.
The EQ framework consists of five core categories. The categories and associated weighting for each is defined as follows:
- Ethics and Compliance Program (35%)
The criteria used for this category are fully aligned to corporate best practices, relevant case law and the “hallmarks” of an effective compliance and ethics program as outlined by the Federal Sentencing Guidelines, including:
- Program structure, responsibility and resources
- Program oversight and the tone at the top
- Written standards
- Training and communication
- Due care
- Detection, monitoring and auditing
- Enforcement and discipline
- Corporate Citizenship and Responsibility (20%)
This category reviews a wide range of a company’s performance indicators associated with sustainability, citizenship and social responsibility, specifically including such areas as environmental stewardship, community involvement, corporate philanthropy, workplace impact and well-being and supply chain engagement and oversight. The quality and effectiveness of the initiatives are considered, in addition to stated and measureable goals, accountability and transparency.
- Culture of Ethics (20%)
This category examines the extent to which an applicant promotes an organizational culture that encourages and achieves ethical conduct and a commitment to compliance with the law. Specifically, the category measures an organization’s efforts and success at establishing an ethical tone throughout every level of the organization.
- Governance (15%)
This category looks at the availability and quality of systems designed to ensure strong corporate governance including oversight, governance principles and risk management. Governance criteria is modified as needed and as is appropriate when reviewing private companies, partnerships, educational institutions and non-profits.
- Leadership, Innovation and Reputation (10%)
This category measures a company’s legal compliance, litigation and ethical track record, along with the strength of the company’s ethical reputation in the market place including with key stakeholders such as employees and customers. While we take into account awards and accolades garnered, we also look at some concrete examples of corporate leadership in local, national, industry and/or global initiatives that promote business ethics, responsible and sustainable business practices, environmental stewardship, good governance, transparency and social responsibility. Standard-setting and thought leadership is important, but ultimately what matters most is the quality and innovation of company’s engagement with various stakeholders considered within the context of the company size, industry and performance in comparison to industry peers.
THE EQ SCORE
An initial “self-reported” EQ score is derived through a proprietary matrix of relationships between answers to given questions and a set of complex formulas based on demographic qualifiers. It is important to understand that while the EQ is the foundation for the WME selection process, the process does not end when the survey is complete. Supporting documentation is then reviewed to verify the self-reported EQ score. The review process may also include multiple means of independent verification on an as-needed basis that may include additional research, request for additional documentation and/or interviews with company leadership. We conduct reputational and legal reviews to determine any outstanding or historical issues as well. Self-reported EQ scores are often adjusted based on documentation review and independent research.
Each candidate then receives a “validated” EQ score that may be higher or lower than the initial self-reported score. Note that if we are unable to verify certain aspects of your self-reported performance, the resulting scores may be discounted.
ACCESSING THE EQ QUESTIONNAIRE
The 2015 EQ Questionnaire has been updated for relevancy and updated best practices. To obtain a personalized link to the online survey, simply complete the nomination form here. When the new survey is ready, we will send out a notification.