(PRWEB) October 26, 2004
The recent resignation of Marsh & McLennan Cos. Chief Executive Officer, Jeffrey Greenberg following accusations by the New York Attorney General Eliot Spitzer of rigging insurance prices and taking kickbacks has again shown the risks investors take in supporting companies where activities are not guided by a core set of values.
New Zealand based MetaWealth Limited, a company that tracks the culture of S&P500 firms, reports that Marsh & McLennan shared the same profit-maximizing culture as Enron, Worldcom and Tyco Â companies involved in recent high profile scandals. ÂThese companiesÂ, says Branton Kenton-Dau, who runs MetaWealth, Âare far more likely to step over the legal line because their actions are not guided by core values. As such they represent a higher investment risk.Â MetaWealth believes there are other S&P500 insurance companies firms such as Chubb that are driven by their values and consequently represent a lower risk. It calculates that ChubbÂs focus on core values contributed US $873,000,000 to the company's market valuation last year. MetaWealth has also found that companies driven by their values are much more likely to grow larger and last longer than companies focused on profit alone.
ÂValues make a significant contribution to the performance and risk profile of companies, Â says Kenton-Dau, Âwe advise all shareholders to understand as much about why a company is taking the actions it takes as they do about the bottom line results. If values are at the core of every decision you are on much safer ground.Â
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MetaWealth Limited is a research and consultancy firm that improves the performance of companies by strengthening their purpose and values. Its research into S&P500 and Nasdaq companies has demonstrated that companies driven by their purpose and values produce higher returns to shareholders, grow bigger, last longer, have higher price/earnings ratios, represent lower investment risk, are better employers, give better customer service, contribute more to their communities and do more to protect the environment.