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Roughly 60 percent of the companies named as EthisphereInstitute's most ethical for 2020 have an independent chiefcompliance or ethics officer who reports directly to the CEO ratherthan the manager of another business function.

AT&T Inc., U.S. Bancorp and LinkedIn are among the 132companies Ethisphere named to be the most ethical for 2020.

Douglas Allen, managing director of data and services atScottsdale, Arizona-based Ethisphere, said nearly every companynamed has someone who acts as a chief ethics or compliance officer.However, the number of companies that have independent, C-suitelevel compliance and ethics officers has increased from previousyears. That independent role has led to better corporate behaviorfrom the top down.

"Defining the role and allocating resources to this role sendsan incredibly strong signal that ethics matter to theorganizations," Allen said.

Tim Erblich, CEO of Ethisphere, said the pressure to actethically and have someone in charge of company ethics comeslargely from investors.

"As boards are thinking about this and are listening to theirstakeholder community, they really have to have a plan for this,"Erblich said.

In January 2019, State Street Corp. authored a letter to the board members of its portfolio companies andasking them to focus on company culture and compliance. BlackRockand Vanguard have also been active on emphasizing workplace cultureto board members.

"We strongly believe this has to be linked to performance.Investors are always about the return. So the integration ofbehavior into performance strategy is important," Erblich said.

Outside of investors, CEOs are also beginning to take ethics andworkplace culture more seriously, creating a greater need for achief ethics or compliance officer. Thirty-nine percent of the 89CEOs fired in 2018 were terminated because of their ownunethical behavior or the behavior of an employee, according to aPricewaterhouseCoopers survey.

"That outdistanced financial performance as to why CEOs arebeing replaced," Erblich said. "If there is a behavioral breakdownyour stock gets hammered and you lose your job."

In addition to a reliance on a chief ethics or complianceofficer, Erblich and Allen said the following of the companies theyrecognized also had:

• Nearly 9 out of 10 companies have a mental health or wellnessprogram in place. Allen said he would expect to have more data onmental health and wellness programs in the coming years.
• Companies are putting more resources into their value chain.They are helping their suppliers become more ethical and makingcompliance a business strategy over risk mitigation.

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