APPENDIX
Good Company Index: Scoring and Sources
In calculating the Good Company Index Scores for the companies represented in this book, we used data from a variety of sources, which are listed at the end. (The most up-to-date information on the Good Company Index can be found at http://www.goodcompanyindex.com.)
In some categories, companies were ranked from high to low into octiles, or eighths, which were used to assign category scores that make up the Good Company Index ratings. For example, a company that falls in the top 12.5 percent (the equivalent of the top one-eighth of the overall distribution) would be in the first, or top, octile. A company that falls between 75 percent and 87.5 percent would be in the second octile, and so on.
Overall Good Company Grades and
Corresponding Numerical Scores
GOOD EMPLOYER
In order to calculate a score for a given company, we begin by measuring how good an employer it is. Using companies that have at least 25 employee reviews as of April 2010, we get a starting number based on the octile into which a company falls in Glassdoor.com’s overall ratings, relative to other Fortune 100 companies.
GOOD SELLER
The GOOD SELLER score is calculated based on the octile into which a company falls (relative to the entire wRatings company database) in a custom rating calculated by wRatings using customer evaluations of quality, fair price, and trust.
GOOD STEWARD
To calculate the GOOD STEWARD score, we used six different measures in four categories.
Environment
Penalties/Fines
If company paid fines between $1 million and $100 million, –1 |
– — |
If company paid fines of more than $100 million, –2 |
– — |
|
= — |
Restraint
CEO COMPENSATION
If its executive compensation is among the 5 highest on either the |
– — |
New York Times report or AFL-CIO database, –1 |
= — |
TAX HAVENS
If company had subsidiaries in any country with all 3 “tax haven/ |
– — |
|
= — |
Contribution
If company demonstrates the use of a core capability to contribute |
+ — |
If company has a systematic process (as opposed to a one-time |
+ — |
Overall good company score |
= — |
Sources
GOOD EMPLOYER
Compiled by authors, April 2010, from www.glassdoor.com and Fortune’s 2010 list of 100 Best Companies to Work For
GOOD SELLER
Custom rating (2008-2009 data) provided to authors by wRatings (www.wratings.com)
GOOD STEWARD
Environment www.sustainability-index.com, as of April 2010; and http://green rankings2009.newsweek.com
Penalties and Fines Compiled by authors, 2010, through systematic review of 2005 to 2009 penalties and fines listed on U.S. Government agency Web resources plus review of major European Union fines/penalties during the same period.
Restraint: CEO Compensation New York Times report on executive compensation, April 2010, http://projects.nytimes.com/executive_compensation and AFL-CIO executive compensation database, April 2010, http://www.aflcio.org/corporate watch/paywatch/ceou/database.cfm (Different methodologies used; each source had multiple missing data points.)
Restraint: Tax Havens U.S. Government Accountability Office, International Taxation: Large U.S. Corporations and Federal Contractors with Subsidiaries Listed as Tax Havens or Financial Privacy Jurisdictions, December 2008, http://www.gao.gov/new.items/d09157.pdf
Contribution Compiled by authors, 2010, based on (a) direct requests to companies for information on their activities, and (b) systematic review of available social responsibility (or similar) sections of their Web sites for relevant information