In my last column, I addressed the lack of female leadership in corporate America, and sadly enough, the only female executive who made Glassdoor’s list this year was Sharon Turney, who runs Limited Brands, Inc. (NYSE:LTD)‘ Victoria’s Secret unit. She had an 82% approval rating, placing her at No. 42 on the list.
Last year, Hewlett-Packard Company (NYSE:HPQ)‘s Meg Whitman was the sole female chief executive on the list; this year, she’s disappeared from the list altogether.
Morale: an intangible but invaluable asset
If you’re an investor who has followed investment philosophies such as stakeholder value capitalism or “conscious capitalism,” which take many more groups into account than simply shareholders, you know the arguments for good employee treatment. If not, you can read about why such strong foundations boost value for shareholders and everybody else here and here.
In a nutshell, though, happy employees help create happy customers, and these are the lifeblood of any company. Employees who feel well treated and loyal — and attribute these feelings to the leadership of their companies’ chief executives — are more likely to be positive assets for the company. Not only will they work harder, but they’ll likely evangelize about how great their companies are. That’s better than any expensive marketing a corporation could create.
Meanwhile, worker opinion is more important than ever given debates about runaway CEO pay. Leaders’ compensation doesn’t happen in a vacuum, and employees do notice how they’re treated compared to top brass.
Management guru Peter Drucker once said that when the CEO-to-worker pay ratio exceeds 20-to-1, employee morale is hurt. Last year, AFL-CIO data found the CEO-to-worker pay ratio was 380-to-1, compared to just 42-to-1 in 1980. Many companies are fighting the SEC’s efforts to mandate individual companies’ public disclosure of their own CEO-to-worker pay ratios.
Windows into the best companies… and the best investments
The Glassdoor data isn’t the only game in town when it comes to weighing such factors. For example, Forbes releases its list of Best Companies to Work For list every year. Recently, Motley Fool analysts released our own list of The 25 Best Companies in America, which weighs a variety of factors including employee treatment.
This is one example of how investors have more means than ever to take a long-term view of companies, and more information than ever before to really understand such important factors that just a few decades ago would have been laborious to unearth (if not impossible).
Forward-thinking, long-term investing assesses far more than stock prices and tickers. More important factors include strong business foundations and management that can build great companies that enrich us all for decades. If workers aren’t happy, shareholders ultimately won’t be, either.
The article Facebook Leads Companies With This Secret Weapon originally appeared on Fool.com.
Alyce Lomax has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Facebook. The Motley Fool owns shares of Amazon.com, Apple, and Facebook.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
