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June 12, 2003
IRRC Platform Combines Corporate Governance and Social Responsibility Research
    by William Baue

The Investor Responsibility Research Center merges its corporate governance research tool with its social responsibility research tool in a web-based platform.


This week, the Investor Responsibility Research Center (IRRC) announced the combination of its Portfolio$creener social responsibility research tool with its Benchmarker corporate governance research vehicle into a single web-based platform. IRRC claims that this represents the first research apparatus that responds to the increasing fusion of these two issues in investors' minds.

"Investment managers who may not have shown interest in social issues in the past are finding it necessary to do so now," said Michele Soulé, IRRC's director of marketing. "In the same vein, I'm seeing the social investing group showing much more interest in the governance side, so the two sides are blending into one."

"Philosophically, we think that the health of a company can be seen in how it handles not just governance issues but social issues as well," Ms. Soulé told SocialFunds.com.

IRRC has been has providing impartial research on corporate governance and social responsibility issues for more than 30 years. IRRC distinguishes itself as a research provider that does not analyze or assess the data it gathers to rate companies on social responsibility or on corporate governance.

"Whereas other products assign either a letter or numerical grade, we don't do that: we let investors make their own decisions," said Ms. Soulé.

Companies and investors alike have expressed frustration and incomprehension when ratings diverge significantly.

"One company can get a '92 percent' score from one rating agency and an 'F' from another rating agency based on similar data," said Ms. Soulé. "We're actually happy not to be participating in that scoring, because we consider ourselves impartial--we just gather and manipulate and provide the data for our clients."

Portfolio$creener has been around for a number of years, and IRRC recently introduced an online version of the product. The Benchmarker is not brand new, as IRRC launched it last fall.

Portfolio$creener provides access to comprehensive profiles on 2,000 US companies. More in-depth coverage is available on 600 companies in the global market in the form of compliance lists regarding a number of corporate responsibility issues. These issues include involvement in alcohol, gambling, firearms, defense contracting, weapons production, nuclear power, adult entertainment, contraceptives, and animal testing. It also informs clients on companies' employment policies, labor relations, international operations, respect for human rights, board diversity, and environmental performance.

For example, Portfolio$creener can compare companies' toxic emissions in a recent three year period to an earlier three year period to see if it has decreased its exposure to this risk.

The Benchmarker provides comparative governance profiles of 1,500 leading U.S. companies covering five key categories: boards practices, board committees, directors, CEO pay and stock incentives, and shareowner rights. Within these categories, the research addresses more than 70 data points, including such details as director affiliations, attendance, committee memberships, and shareholdings as well as overall independence levels on the board and other practices.

IRRC stresses the value of blending social responsibility and corporate governance research.

"The 'bundling' of this information on a single platform is a big step forward for compliance officers and financial professionals who appreciate the fact that they are expected to see the entire picture about the companies they research," said IRRC CEO Linda Crompton.

 

 
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