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. 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 employee relations, which receives a big 19.5% weighting. Here are the top-rated companies in this category:
To earn their high scores, the companies above engaged in a variety of good deeds, including disclosing their workforce demographics and 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.
Citigroup aims to be an "employer of choice," developing diversity in the workplace by sharing best practices throughout the organization. It also fosters employee networks for working parents, veterans, women, and those of African heritage, among others.
Intel offers many innovative benefits for employees, including online homework help for their children, subsidies for public transportation, access to wellness coaches, and paid sabbaticals.
Merck offers many on-site day care and fitness centers, as well as some on-site banking services. Other benefits include vision and dental insurance, with some employees even qualifying for pensions, which are hard to find these days.
Gap offers discounts on merchandise and is generous with time off, offering leaves of absence and 20 to 35 days of paid time off (in addition to holidays). The company also provides some on-site fitness centers and discounts on gym memberships.
When it comes to women in leadership positions, it's not surprising that Avon stands out; women compose half of its board of directors. It holds quarterly "town hall" meetings with all associates, and like Citigroup, has networks of employees in categories such as Asian, LGBT, and parents.
ConEd's union and management workers enjoy benefits such as long-term disability coverage, adoption assistance, and transportation reimbursement. Hess's commitment to employee health has been recognized by the American Heart Association, and it offers a Learning Center for all employees.
Companies that treat employees well can boost your portfolio. In its first nine years, companies on the "100 Best Corporate Citizens" list outperformed the Russell 1000 over the ensuing three-year period by more than 25%. That's a great motivation for even the most coolly rational investors to take social responsibility to heart.
Click on Citigroup, Intel, Merck, Gap, Avon Products, Consolidated Edison, and Hess to add them to your watchlist. You'll get valuable updates as well as immediate access to a new special report, "6 Stocks to Watch From David and Tom Gardner." Click here to get started.