Vol. 51, No. 6
Screening in Good HR Practices
Most socially responsible investors refuse to invest in companies that don't pass certain screening factors, but some investors take the opposite approach-investing only in companies that excel at certain socially responsible investment factors.
Nelson Capital Management in Palo Alto, Calif., is one such company.
"We look at Fortune's '100 Best Companies to Work For' list and corporate governance," says Lloyd Kurtz, senior portfolio manager. "Studies show that good corporate governance and restrained executive pay are positive factors."
Kurtz also watches for "a pattern of trouble with regulators and the law." He may lose interest in an otherwise viable company if legal difficulties become a distraction. "One reason I haven't liked Merck, even though it's on the 'Best Companies to Work For' list, is that at Merck job one has been to handle the legal firestorm surrounding Vioxx," he says.
Robert J. Grossman, a contributing editor of HR Magazine , is a lawyer and a professor of management studies at Marist College in Poughkeepsie, N.Y.