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Characteristics that Make Up Ethical Companies

Ethical Companies
Characteristics that Make Up Ethical Companies
on March, 31 2017

Annually, the Ethisphere Institute, an Arizona-based firm, releases a list of companies that make it to their World's Most Ethical Companies awards. The organization measures and defines ethical standards of corporations and distinguishes those that further the best practices in business ethics. The organization publishes the list in their Ethisphere Magazine. This year is their 11th edition, where 124 companies made it to the list.

Criteria for consideration

To qualify for inclusion in the list, a company must respond to a very detailed 200-question survey form. The survey focuses on how a company addresses ethics while conducting business. Their answers are verified through supporting documents from the companies and other sources, such as filings with the SEC. Analysts from Ethisphere check ethical track record, history of litigation and the reputation of each company. They look into the entire company’s observance of ethical practices, their corporate responsibility to people and the environment, and their corporate governance, including corporate diversity. Company reputation, innovation and leadership are also taken into consideration.

Companies pay an application fee between $1,000 and $1,500 depending on their revenue. While Ethisphere, which is a private company, earns a revenue from their products and business services, such as advertising, subscriptions, event sponsorship and conferences, they state that their business relationships with various clients does not impinge on their decision on which companies get on the list.

For the 2016 list, the organization observed a trend – more companies have been disclosing corporate misconduct to their employees, such as the number of complaints filed and what the company did to resolve them.

Regulars and newcomers

More than 10 ethical companies make it to the list year after year, such as Xerox, UPS, Texas Instruments, Starbucks, Kao Corporation, PepsiCo, GE and Aflac. Some of the newcomers this year are Eli Lilly, VF Corporation, Brightstar and Grupo Bimbo.

What makes a company ethical?

Making it to the list of the most ethical companies in the world adds prestige to an organization, boosts business, and solidifies industry standing. Realistically, there are many more organizations out there that practice ethical standards but do not make it to the list. But how do you consider a company an ethical one? An ethical company is a firm that does not produce dangerous and harmful products, does not use child labor, does not exploit workers by giving low wages, and does not damage the environment.

Let us explore this further and find out the characteristics that make a business an ethical company. It requires commitment. It calls for making the right decisions between financial rewards and things that will not have adverse effects on people.

Characteristics of ethical companies


The company develops an ethical culture that starts from the top of the management roster down to all departments and staff. The leaders employ ethical practices in decision-making, ensuring that there is a balance between social responsibility and financial profits. An ethical leader should stand by his or her word and should not hesitate to own up to mistakes.

Solid corporate values

The mission of the company is described in its core value statement, with which it lives by. The ethical company sees to it that every employee understands and follows the corporate mission through its code of conduct.

Moral soundness

An ethical business has integrity. It follows the regulations and laws at all levels. It is a company that treats employees fairly, encourages open and honest communication, and gives vendors and customers fair deals by providing them the highest quality standards in services and competitive pricing.

Day Translations, Inc. always follows ethical business practices in all its business dealings. All translation works that leave the company adhere to company standards of quality and accuracy, are charged fairly, meet customer requirements, and are delivered on time.


Ethical companies show respect for their staff by putting value to their opinions and suggestions. Each employee enjoys equal treatment and every customer is shown respect by assessing their needs and listening to their opinion. It has respect for its vendors and service providers as well as its community by giving back and practicing environmental responsibility. It shows respect by providing its staff with direction, training and coaching and trusting them to do their job the best they can without micro-managing them.


An ethical company is after loyal business relationships with its employees, its vendors, service providers, and customers. It is a dependable and reliable business, in good times and trying times.


An ethical company extends concern to everyone – the public, vendors, employees and customers that are affected by the business. An ethical business thinks of the effect its decisions will have on each thing or person.


A business is nothing without its customers. It must provide what customers need and pay for. A business should focus on its customers, which is the company's first responsibility, followed by the organization's partners, investors and employees.

Business ethics are the standards and principles by which a company operates, that are shown by the firm's acts of responsibility, honor, integrity, compassion and fairness. When a company sticks to good business ethics, it brings a wealth of benefits to the company. It helps attract additional customers, makes employees loyal, increases their productivity and attracts more talented employees. It's sound business sense to be an ethical corporation, whichever way you look at it.

Bernadine Racoma

Bernadine is a writer, researcher, professional and multi-awarded blogger and new media consultant. She brings with her a rich set of experience in the corporate world, as well as in the field of research and writing. Having taken early retirement after working as an international civil servant and traveling the world for 22 years, she has aggressively pursued her main interest in writing and research. You can also find Bernadine Racoma at .

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