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$creener social responsibility research
tool with its Benchmarker corporate governance research vehicle into a single web-based platform.
IRRC claims that this represents the first research apparatus that responds to the increasing
fusion of these two issues in investors' minds.
"Investment managers who may not
have shown interest in social issues in the past are finding it necessary to do so now," said
Michele Soulé, IRRC's director of marketing. "In the same vein, I'm seeing the social investing
group showing much more interest in the governance side, so the two sides are blending into one."
"Philosophically, we think that the health of a company can be seen in how it handles not
just governance issues but social issues as well," Ms. Soulé told SocialFunds.com.
has been has providing impartial research on corporate governance and social responsibility issues
for more than 30 years. IRRC distinguishes itself as a research provider that does not analyze or
assess the data it gathers to rate companies on social responsibility or on corporate governance.
"Whereas other products assign either a letter or numerical grade, we don't do that: we
let investors make their own decisions," said Ms. Soulé.
Companies and investors alike
have expressed frustration and incomprehension when ratings diverge significantly.
company can get a '92 percent' score from one rating agency and an 'F' from another rating agency
based on similar data," said Ms. Soulé. "We're actually happy not to be participating in that
scoring, because we consider ourselves impartial--we just gather and manipulate and provide the
data for our clients."
Portfolio$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.