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Investors value ethics, says study

By Darla Mercado

July 13, 2007 12:11 pm ET

Most investors prize a company’s ethical behavior over rich returns, a study found.

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Seventy-six percent of investors said they would pull their money from a company that engages in legal but unethical behavior—even if that behavior brought in higher returns, a poll by Opinion Research Corp. for Pepperdine University’s Graziadio School of Business and Management found.

Two-thirds of the 482 investors polled also said that they knew about the ethical standards and practices of companies they invest in.

Two-third of the 482 investors polled also said that they knew about the ethical standards and practices of companies they invest in. About half said that corporate boards are doing a good job of ensuring that companies are managed ethically, while 42% said that boards were doing either fairly or poorly.

“Clearly, investors are looking at more than the balance sheet and sales projections when it comes to investments,” said Linda A. Livingstone, dean of the Graziadio School of Business and Management, in a statement.

“Corporate Board leadership that is centered on values and ethical behavior plays an important role in how investors evaluate options,” she added.

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