Black Lists

Two weeks ago I went to the Harvard Club in Cambridge to accept an award on behalf of Weber Shandwick for the best corporate responsibility advisory firm in CR magazine's ranking of our category. No doubt about it...it was an honor. CR rated public relations agencies and advertising/marketing firms and we topped the list. The meeting in Cambridge was to honor CR's 100 Best Corporate Citizens and to gather people together to discuss corproate responsibility. This was before the Horizon oil spill which would have undoubtedly dominated the discussion. The meeting was terrific by the way.

What surprised me the most was that one of the issues that was given out in addition to the issue devoted to 100 Best Corporate Citizens was CR's Black List.

This made me wonder whether there will be a bumper crop of Black Lists in the next few years. Should we brace ourselves for Black Lists of the worst companies to work for, least ethical companies, worst companies for working mothers, worst MBA programs, most terrible IT companies to apply for, meanest CEOs, etc. Actually there have been many Worst CEO lists -- according to Google there are nearly 900,000 hits for Worst CEOs.  No surprise. But the Black List sounded deadly to me and I cracked open the issue to learn why a publication would go this far. Below is what CR's magazine's editor Jay Whitehead had to say about why they published the list. He makes some good points (transparency builds credibility) and I was glad to see why they did not take this List so lightly. As noted, many of the companies were on the list because they did not disclose information on the factors that go into CR's ranking. We will see what next year brings in terms of Black Lists but I can tell you one thing....Worst CEO lists will be here for eternity. As I always say (and I am sure someone else said it before me)....Just as CEOs get all the credit when things go right, they get all the blame when things go wrong.

"We have a confession. What we have not told you is that every year after we publish the “100 Best Corporate Citizens List,” someone reminds us that we also have an obligation to publish the bottom of the list. Up until now, we’ve ignored that reminder. But we cannot ignore it any more. The “Black List” is the result of recurring demands to see which companies are the most opaque among the Russell 1000.

In publishing the “Black List,” we do not take our responsibility lightly. Companies on the “Black List” represent the least-transparent companies in the Russell 1000, which is a tough place to be in the era of corporate responsibility and its ever-intensifying drive for transparency. We expect the companies on the “Black List” will be unhappy with us.  We offer them one piece of solace. All a “Black List” company has to do is make a few CR-related data points about itself publicly available. Report a couple data points to the Carbon Disclosure Project. Put your employee benefits policies online. Publish some human rights information. Get a formal climate change policy, and put it online. Some of the actions required are the public company hygiene equivalent of washing your hands after visiting the rest room. Yet all the “Black List” companies have made the decision to skip that basic step. 

While being a “100 Best Corporate Citizens List” company is a major accomplishment requiring considerable commitment and cost, indulging in just enough transparency to get your company out of the cellar is not that hard, nor that expensive. And one thing’s for certain: it’s less embarrassing than being on the “Black List.”

 The “Black List” methodology is exactly the same as what we use for the “100 Best Corporate Citizens List.” Our population of companies is still the Russell 1000. We used the same 349 data points in 7 categories. We used the same data provider, IW Financial. We contacted each of the companies by email to request that they provide any data they have to help us correct their files. We got no replies from the 30 companies that appear on the “Black List.”

 Where the “Black List” differs from the “Best” list is in the paucity of data. Where “100 Best” companies disclose hundreds of data points in Environment, Climate Change, Human Rights, Employee Relations, Finance, Governance and Philanthropy, “Black List” companies have disclosed virtually zero. In fact, all 30 of this year’s “Black List” companies tie for dead last in every category—with the exception of three-year total return, which varied a bit as you see on the Black List above. And the irony is that “Black List” companies significantly under-performed both the S&P 500 and the “100 Best Corporate Citizens List” companies in three-year total return."