The Dark Side of the “World’s Most Admired” Companies

Fortune magazine recently released its 2018 list of the World’s Most Admired Companies. From a pool of roughly 1,500 candidates, Fortune picked the 50 “best-regarded companies in 52 industries.” Apple topped the list for the eleventh year straight. General Electric plummeted in the last year from number 7 to number 30. Lockheed Martin and Adidas both cracked the top 50 for the first time.

Of course, Fortune’s ranking is somewhat skewed and self-serving. It is based on a survey of corporate executives and financial analysts. “Admiration” is measured according to criteria that emphasize companies’ financial shape over their track record of integrity and business ethics.

So, we took it upon ourselves to document the dark side of the world’s 50 most admired companies. Ten of the companies are in our Federal Contractor Misconduct Database (FCMD), which includes civil, criminal, and administrative misconduct instances dating back to 1995 for 220 of the federal government's largest contractors. All but 3 of the top 50 are in Good Jobs First’s Violation Tracker corporate misconduct database, which includes enforcement data from the federal regulatory agencies and the Justice Department dating back to 2000 for over 2,800 companies. Both databases show that most of the companies have multiple instances of misconduct for which they paid millions of dollars in fines, penalties, judgments, and settlements.

Click on dollar figures in the table to go to the company’s summary page in the FCMD and Violation Tracker:

Fortune RankCompanyFCMD InstancesFCMD Misconduct Dollar AmountViolation Tracker RecordsViolation Tracker Penalty Total1 Apple 1 $32,500,000 2 Amazon 26 $5,022,375 3 Alphabet 4 $541,507,657 4 Berkshire Hathaway 1 $896,000 2,205 $388,557,922 5 Starbucks 15 $4,204,571 6 Walt Disney 32 $9,503,247 7 Microsoft 1 $5,855,841 8 Southwest Airlines 289 $18,440,515 9 FedEx 58 $759,688,721 168 $16,841,391 10 JPMorgan Chase 77 $29,459,586,865 11 Netflix 12 Facebook 1 $5,600 13 Costco 35 $15,149,903 14 American Express 16 $350,226,556 15 Salesforce.com 1 $11,009 16 Nike 1 $24,040 17 Johnson & Johnson 23 $3,005,373,378 18 Coca-Cola 85 $7,061,416 19 BMW 4 $5,250,769 20 USAA 21 3M Company 56 $6,287,531 22 Home Depot 123 $14,631,028 23 BlackRock 4 $14,265,350 24 Marriott International 64 $2,560,108 25 Boeing 68 $1,456,813,493 51 $798,109,276 26 Walmart 235 $174,764,973 27 Goldman Sachs 21 $9,526,227,860 28 Nordstrom 7 $757,935 29 Toyota 22 $1,322,336,919 30 General Electric 62 $648,594,796 132 $325,158,028 31 Delta Air Lines 584 $278,282,059 32 Singapore Airlines 7 $48,082,000 33 UPS 18 $389,305,420 243 $75,052,672 34 Procter & Gamble 28 $837,281 35 IBM 26 $916,069,818 9 $20,453,203 36 Exxon Mobil 97 $3,242,127,429 248 $1,023,262,058 37 McDonalds 19 $636,136 38 Target 57 $5,817,664 39 CVS Health 118 $738,534,720 40 Accenture 9 $124,219,559 1 $63,675,000 41 PepsiCo 108 $7,115,748 42 Adidas 2 $26,000,000 43 Caterpillar 70 $3,874,043 44 Unilever 16 $4,806,905 45 Intel 2 $894,000 46 Visa 47 Nestlé 58 $9,189,176 48 Lockheed Martin 85 $767,331,643 74 $158,774,793 49 AT&T 22 $311,615,102 164 $433,474,022 50 Charles Schwab 4 $118,441,800 Totals 445 $8,616,661,981 5,511 $49,067,425,343

Alphabet (#3) is the parent company of Google.

Berkshire Hathaway (#4) is a multinational conglomerate consisting of dozens of subsidiaries, including BNSF Railway Company. The vast majority of Berkshire Hathaway’s records in Violation Tracker are BNSF railroad safety violations. We are aware of only one misconduct incident involving the Berkshire Hathaway corporate entity itself: an $896,000 settlement with the Federal Trade Commission in 2014 over a financial reporting violation.

Two of the companies in the top 50 were in the news recently for questionable business conduct. Accenture (#40) paid $1.7 million to settle charges of overbilling the U.S. Army. Lockheed Martin (#48) agreed to a $4.4 million deal resolving allegations that it provided defective communications equipment to the U.S. Coast Guard.

Overall, these 50 companies have racked up thousands of misconduct instances and billions of dollars in penalties for a wide range of misbehavior including defective medical equipment, consumer fraud, unsafe workplaces, foreign bribery, environmental violations, and submitting false invoices on government contracts.