Vol. 4 No. 2 – March/April 2013

2013 100 Best Corporate Citizens List

Our annual chronicle of transparency and accountability includes more than 25 companies that were not on last year’s list.

By The Editors

What follows is CR Magazine’s 14th annual recognition of the standout performers among public companies across the United States. Representatives from the final list joined Newark Mayor Cory Booker for the unveiling at the New York Stock Exchange in April.

The 100 Best List documents 298 data points of disclosure and performance measures—harvested from publicly available information in seven categories: environment, climate change, employee relations, human rights, governance, finance, and philanthropy. The list is drawn from an involuntary audit of companies on the Russell 1000 Index.

“We are pleased to honor the companies on this year’s Best List, as they represent a tried and true standard of transparency within the Russell 1000,” said Dirk Olin, Editor-in-Chief and Publisher of CR Magazine.

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It is a Jungle Out There

The global marketplace has never witnessed an environment so fraught with peril and filled with promise.

By Dean Simone

In 2012, the forces of change that had shaped business over the previous decade coalesced to become the new normal. Globalization, the rise of emerging markets, the ever-deeper penetration of data technologies and third-party service providers, the increased influence of external stakeholders, and continued repercussions from the global recession of 2008–09 combined to produce a new environment of uncertainty and complexity, where exogenous risks could come swiftly and unexpectedly, with far-reaching ramifications.

To cope with these new market realities, senior executives began to rethink their risk attitudes and approaches. Many companies initiated business transformation efforts to position themselves for success in a fast-changing marketplace.

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Corporate Responsibility From the C-Suite

In assessing the many stakeholders affected by any CR initiative, consider a new gauge: return on impact.

By William B. Horne

The traditional view of prioritizing investments and decisions around corporate social responsibility (CSR) has changed in recent years, due to a significant shift in how companies communicate with their constituents and the public’s expectations on the way businesses operate. While companies could once focus almost exclusively on their products or services, they are now also expected to play a role in creating a positive impact through actions focused on safeguarding the welfare and interests of the society they serve. C-level executives are becoming increasingly aware of how public perception of their CSR initiatives can have a direct impact on their bottom line and are thus taking a closer look at their strategic plans in this regard.

The concept of CSR started to pick up momentum in the early 1970s, but the world has changed greatly since then.

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Context-Based Metrics

Between the relative and the absolute falls the shadow.

By Mark W. McElroy and Jo Van Engelen

As a distinct school of thought in the field of corporate sustainability management (CSM), the context-based approach gives rise to its own style of metrics that should be used in measuring and reporting sustainability performance. We call these context-based metrics, or CBMs. More familiar to practitioners in sustainability management, however, are so-called relative and absolute metrics. It is important to understand which of these two categories of metrics CBMs fall into, if any.

Starting with absolute metrics, these are perhaps the simplest form of measurement used in sustainability reporting, although they do have their problems. First, here’s a definition of absolute metrics we can use: Absolute metrics express operational performance in terms of what overall levels of performance are in specific areas of interest (e.

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A Tale Of Three Breakdowns

A horse breeder, a pharmaceutical giant, and a automaker each offer lessons on damaged brand reputation.

By Bob Vanourek and Gregg Vanourek

Today we see too many leadership failures, too many leadership breakdowns and scandals. We need leadership that can build excellent, ethical, and enduring organizations. We need triple crown leadership.

Personal leadership is necessary but not sufficient in avoiding organizational breakdowns. In today’s volatile global environment, such organizational breakdowns are fairly common. Sometimes a breakdown is a quiet affair with an orderly dissolution of assets. Other times it is a seismic crash with embarrassing headlines, prison sentences, and painful ripple effects. Sometimes an organization rises to the top of its industry and then slowly falls back in the field.
In any list of great organizations, some are likely to descend from great to grim.

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Meaty Questions

Hormel CEO Jeffrey Ettinger discusses transparency, hunger relief, and animal welfare.

By Dirk Olin

Jeffrey M. Ettinger is chairman of the board, president and chief executive officer at Minnesota-based Hormel Foods.
He joined the company in 1989 and has served in a variety of roles, including senior attorney, product manager and treasurer. In 1999, he was named president of Jennie-O Turkey Store—the firm’s largest subsidiary—and he was
appointed president of the entire operation in 2004 and CEO in 2005. Today, he oversees all functions and operations at the multinational, which most recently clocked in at $8.2 billion.

Under Ettinger, Hormel has grown through strategic acquisitions and a focus on new product innovation (part of a broader company philosophy he dubs “continuous improvement.”) The company’s common stock was added to the Standard & Poor’s 500 Index in 2009, and Hormel increased dividends for the 47th consecutive time in November 2012, despite economic and industry challenges.

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Honor Thy Mother

Boards with more women typically enrich the bottom line and lower risk.

By R. Paul Herman and Zhaoqi Fu

If a Credit Suisse report showed that your company’s return on equity (ROE) could be one-third higher than your competitors by just changing one factor, would you consider making that change?

Many global companies have ignored this factor, even though it comprises one half the population, one half the talent pool, and one half or more of most customer bases. The factor is the number of women on the board of directors. It is a meaningful indicator for potential increases in return on equity: Of 2,560 companies reviewed globally between 2005 and 2011 by Credit Suisse, those with no women on the board averaged 12 percent ROE, while those with one or more women on the board averaged 16 percent ROE—and with less volatility. How many women are on your board of directors? Does the percentage match your customer base and talent pool?

Gender inequality on corporate boards is increasingly a hot topic, especially with Facebook COO’s Sheryl Sandberg’s new book Lean In.

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