Has Leaders with Integrity

Does the company have honest leaders? According to our 2015 Survey, Americans identified a variety of related topics to include in measuring JUST leadership. These ranged from enforcing ethics policies, to honesty, to responsible business practices.

METRICS

Controversies in Integrity

Description: Assessments of whether:

  1. a senior executive of the company has been dismissed or faced criminal or other prosecution for personal misconduct or misrepresentation within the past two years. This includes the following: Embezzlement, Company Theft, Executive, Director Misrepresentation of Credentials or Qualifications, External or Other Criminal Activity, Inappropriate Relationships, Inappropriate Use of Company Assets, and Illegal Trading. The specific event triggers used are: Arrest, Charges, Dispute, Investigation, Litigation, Subpoena or Settlement, Conviction, and Fine.
  2. there are directors on the board whose previous history of board service raises concerns about this board’s integrity. Flagged if yes, including individual directors who have been involved in a corporate bankruptcy or other major loss of shareholder value, even when those circumstances are subsequently omitted from that individual’s personal bio. Individual directors are only flagged if their board service began at least one full year prior to the event in question. These flags do not expire.

Value of 10 if data point 1 is True.  Value of 5 if data point 1 is False and data point 2 is True. Value of 0 if both are False.

Data Source(s): MSCI
Metric Type: Controversy
Geography: Global
Unit of Measurement: Score (0-10)

Company Leadership

Description: Crowd-sourced average rating of a company's culture and values measured on a five-point scale by current and former employees of each company.

Data Source(s): Glassdoor
Metric Type: Crowd-sourced
Geography: US
Unit of Measurement: Score (0-5)

Board Governance

Description: The independent director composition of the Board.  Independence is as defined by ISS in their US Proxy Voting Guidelines.  Directors are classified, depending on their relationships and affiliations with the company or its executives, as either Inside Director, Affiliated Outside Director, or Independent Outside Director.  The value shown here is the percentage classified as Independent Outside Directors.

Data Source(s): Institutional Shareholder Services (ISS)
Metric Type: Performance
Geography: Global
Unit of Measurement: Percent

Related Party Transactions

Description: The existence of material related-party transactions involving the CEO or company directors, either directly or indirectly (through employers and immediate family members).

In the U.S., a material transactional relationship is defined as one that: includes grants to non-profit organizations; exists if the company makes annual payments to, or receives annual payments from, another entity exceeding the greater of $200,000 or 5 percent of the recipient‘s gross revenues, in the case of a company which follows NASDAQ listing standards; or the greater of $1,000,000 or 2 percent of the recipient‘s gross revenues, in the case of a company which follows NYSE/Amex listing standards. In the case of a company which follows neither of the preceding standards, ISS applies the NASDAQ-based materiality test.

A material professional service relationship is defined as one that includes, but is not limited to the following: investment banking/financial advisory services; commercial banking (beyond deposit services); investment services; insurance services; accounting/audit services; consulting services; marketing services; legal services; property management services; realtor services; lobbying services; executive search services; and IT consulting services; exists if the company or an affiliate of the company makes annual payments to, or receives annual payments from, another entity in excess of $10,000 per year.

Data Source(s): Institutional Shareholder Services (ISS)
Metric Type: Performance
Geography: Global
Unit of Measurement: True or False