I was reading a recent article in Barron’s on the the “World’s Most
Respected Companies” published on the 15th of Feb 2010. While I was very
happy to note that IBM has jumped up 10 notches to be the fourth most
respected company in the world, I was very keen to know the parameters that made this possible

So what inspires respect ? I noted that while a strong management still matters the most, it is ethics that has become a critical factor in
deciding  after a year of questionable corporate behavior.

Survey participants say respected companies have strong management, good
governance, valuable products and services, and strong stock returns. They
treat their shareholders, customers and employees well. They act ethically.
And while some money managers name respect as the first cut in their
investment process, others say respect is more often the result of a sound
investment process.

In fact, when it comes to calculating asset values — physical, financial
or reputational — Wall Street is never at a loss. Investors pay up for
respect, in part because respected companies tend to hold their value
longer.”Respected companies aren’t going to fall as far in the bad times,
and they come back better,” says David Hartzell of Cornell Capital
Management, a participant in the survey.

In 2009’s roller-coaster market, the top-ranked stocks generally
experienced lower volatility and outperformed during the bear leg. And now,
even after the broad market’s furious rally, the value of respect is still
felt: For the most part, shares of the most respected companies are either
above or not much below their pre-Lehman-bankruptcy levels, and have beaten the market since that crisis erupted.

The World's Most Respected Companies

Reference/ Data Source / Quotes

Barron’s Report on on “World’s Most Respected Companies” published on the 15th of Feb 2010

Image courtesy: Graphs published in the report which have been repurposed on the blog from the report directly

Disclaimer
The views and opinions mentioned in this blog are strictly my own and in no way reflect those of IBM or any other corporation or individual in any manner