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 becoming a vital part of many companies' success -- and it can boost the performance of our portfolios, too.
Corporate Responsibility Magazine recently released its "100 Best Corporate Citizens" list for 2012, in which it rated members of the Russell 1000 large-cap index on nearly 325 different elements related to responsible behavior. In the coming weeks, I'll delve into each of the seven categories that contribute to a company's overall score.
Today we'll look at the employee relations category, which gets a hefty 19.5% weighting. Being regarded as a top-notch employer can give companies a significant advantage, as it will attract talented workers and help retain them, as well. Since high employee turnover can be costly in terms of time, money, and productivity, employee retention is valuable.
Here are the top five companies in this category, according to the new list:
- Intel (Nasdaq: INTC )
- Nike (NYSE: NKE )
- Consolidated Edison (NYSE: ED )
- Gap (NYSE: GPS )
- Cisco Systems (Nasdaq: CSCO )
To earn their high scores, the companies above engaged in a variety of good deeds, including disclosing their workforce demographics, disclosing the percentage of management that is female, providing on-site recreation facilities, and offering benefits such as profit-sharing plans, bereavement leave, elder-care subsidies, and domestic-partner insurance coverage.
- Intel, with more than 44,000 employees, is one of the top-paying companies, recently giving its workforce a big bonus averaging about six weeks' worth of salary. It also moves its workers into different positions every year or two. That helps them learn more about the business and find good fits for themselves. Intel's campuses sport spas and nearby childcare centers, and its workers do a lot of volunteering.
- Nike, meanwhile, offers its more-than-35,000 employees benefits such as a 15% discount on company stock, paid sabbaticals, discounts on Nike products, transportation allowances, tuition assistance, on-site fitness centers, and more.
- Benefits available to ConEd's employees include a stock purchase plan, an adoption benefit plan, parental leave-of-absence pension credits, tuition assistance, transportation reimbursement, a work-at-home wellness program, and more.
- Gap, employing about 132,000 people, offers them between 20 and 35 paid days off, to be applied toward vacation or illness, along with seven paid holidays and a generous leave-of-absence program. The company reimburses child adoption expenses up to $2,000 per kid and offers discounts not only on Gap products (and those of company-owned chains such as Old Navy and Banana Republic), but also on expenses such as computers, flowers, and travel.
- Cisco Systems recently employed more than 63,000 people, with more than 75% of them working from home to some degree. The company regularly checks the pulse of its employees, confidentially assessing their satisfaction with their job, their empowerment, their boss, their career development, and how much they like Cisco as a place to work.
Companies that treat employees well can boost your portfolio. A Goldman Sachs report found that leaders in social, environmental, and governance policies outperformed their peers by some 25%. That's a great motivation for even the most coolly rational investors to take social responsibility to heart. And here's one more great employer to check out: The Motley Fool.
If you're in the market for solid, socially responsible candidates for your portfolio, check out the Rising Stars portfolio run by my colleague Alyce Lomax. Out of more than a dozen portfolios run by smart Fools, she was recently in second place.