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 Rank	Company	FCMD Instances	FCMD Misconduct Dollar Amount	Violation Tracker Records	Violation Tracker Penalty Total
1	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.