March 25, 2010

Ethical Corporations Outpace S&P During Downturn

Here's some good news: The S&P 500 over the last five years has showed a 4% loss, while Ethisphere's list of the World's Most Ethical companies (WME) of 2010 has shown 53% growth. This list of 100 of the world's most ethical companies also substantially outpaced the FTSE 100 by over half as much as it did the S&P.

Interestingly, 18 of the 52 companies listed 0n the 2007 WME list underperformed the S&P. These are of course averages, so we should expect that a minority of the 2010 WME also underperformed the S&P and FTSE averages. It's worth noting that all listed returns in this study only occurred over the last year, as the previous year showed losses across the board.

Overall though, the lesson seems to be that the WME tends to outperform the rest of the market even during times of negative growth, namely, 2008-09, in which WME losses were lower than the other two averages. Indeed, they were only at about 1/3 of the other overage losses.

March 18, 2010

Deep Beats Idle Conversation in Reaching Happiness

This just in from the University of Arizona!
"It may sound counterintuitive, but people who spend more of their day having deep discussions and less time engaging in small talk seem to be happier, said Matthias Mehl, a psychologist at the University of Arizona who published a study on the subject."

Of course, being deep might also lead to disillusionment and dismay at the direction the world is heading in. But perhaps those two facets aren't necessarily mutually exclusive. Still, makes me wonder if the college students interviewed are rather solipsistic.

Nevertheless, this finding is very much in line with virtue ethics, since this activity is inherently self-realizing (self-actualizing) which is the very definition of Aristotelian happiness.

What's more, a new Cornell study finds that lust for material things fade but unique experiences remain with us for a long time.

March 14, 2010

Google Withdraws from China

A fascinating case of global business ethics leadership has finally come to a head in China vs. Google:
"Google said Tuesday it would shut down its operations in China unless the government there agreed to stop using its search engine for spying or to censor political information posted on it. About 80 million Chinese use Google" (AHN).
The company has long been accused of facilitating suppression of information current and historical (e.g. the Tiananmen Square massacre) the government deems potentially threatening to its firm single-party grip on power.

It will be interesting to see what Yahoo and AltaVista do now. Yahoo even went so far, back in 2007, as to turn over internet search records of at least two Chinese political dissidents, who were jailed as a result.

Interestingly, this marks a 180 degree shift in policy for Google, which also in 2007, voted down an anti-censorship shareholder initiative very much like what the company has finally just chosen to do.

Ultimately, this may not compel China to change its repressive policies. However, it will likely inspire its competitors Yahoo and AltaVista to follow suit. This could in turn work to stigmatize the country from the rest of the developed world. It could also embolden its people to revolt once more in the name of freedom and democracy if, as a result of these corporate actions, it becomes impossible or very difficult for ordinary Chinese citizens to continue doing global business on the internet.

But Baidu, the Chinese seach engine, controls already 63% of the market. So perhaps little will change.

Still, this a refreshing and reassuring act of courageous leadership from a company that is clearly still trying to stay true to its founding motto: Don't be evil.