The Best Citizens in Corporate Governance

by Selena Maranjian for The Motley Fool, April 14th, 2011.

Like most investors, you probably aim for the best possible return when picking potential investments. But as consumers increasingly clamor for companies to embrace social responsibility, good corporate citizenship is fast becoming a vital part of any business or stock’s success.

Corporate Responsibility magazine recently released its “100 Best Corporate Citizens” list, in which it rated members of the Russell 1000 large-cap index on more than 300 different elements related to responsible behavior. I’ve been delving into each of the seven categories that contribute to a company’s overall score.

Today, we’ll look at corporate governance, which gets a 7% weighting. Dozens of companies got a top rating in this category, including:

  • EMC (NYSE: EMC  )
  • Boeing (NYSE: BA  )
  • Sherwin-Williams (NYSE: SHW  )
  • Consolidated Edison
  • Xerox (NYSE: XRX  )
  • Abbott Labs
  • Cisco Systems

To earn their high scores, the companies above engaged in a variety of good practices, including maintaining an independent audit and compensation committee, having an outside majority on the board, not having many directors serving on more than four boards, not employing poison pills as defenses against takeovers, and giving shareholders the right to call special meetings. (continue reading… )

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