Moral Rating Agency
The goal of MRA is to publish deep Moral Ratings that reflect the five pillars of our rating philosophy – truth, fairness, standardization, transparency, and indelibility – so the rating system can serve as a moral yardstick against which companies can be measured and also exposed.
Although the aim of morally rating a company’s involvement with Russia is unashamedly to pressure it to act morally, we want to achieve this by providing ratings that are entirely objective in the ratings themselves. Such ratings will allow consumers, shareholders and the media to identify companies that are putting profits before lives, and before the interests of the Free World that these companies enjoy, and also will allow a multi-dimensional comparison of companies’ moral behavior. The rating details will also expose companies that are being credited for doing more than they actually are.
Having built up each Moral Rating with this policy of objectivity, we likewise feel unashamedly at liberty in our ‘Verdict’ text to admonish or congratulate the company based on the rating it obtained from our dispassionate system and its underlying facts. The dispassionate Moral Rating is calculated and decided upon first, after which we write our Verdict. Thus, we have no idea which companies will get our strongest criticism or praise until after we have seen our own rating results.
The underlying information we use for our ratings is mainly confined to publicly-available sources such as serious media and company news releases.
To get to the truth, we need to look beyond the soundbites and PR messages of companies. A 360-degree view of truth is provided by the thoroughness of our rating system. Its foundation stones are the five dimensions we investigate and evaluate in order to give a holistic moral picture covering the Degree, Speed, and Exposure of any action, plus the two
Moral Multipliers, Exposure and Power, and each of the five dimensions’ various sub-components.
Truth in Degree: It’s very easy for a company to say that it is cutting its links with Russia, but what does that actually mean? All of its activities, or just some? Now or in the future? What does “suspending” mean in real terms? What does the “is” in “is leaving” really mean? And if “is” really means “will”, can we be sure the proposed action will ever happen, or is it just a statement to keep criticism at bay while the company hopes for the controversy of Russian association to settle down so it can announce that implementation of the promise is no longer needed. Likewise, it is very easy for a company to announce what it is withdrawing without saying what it isn’t. To resolve this murky picture, we cut through the double-speak and look in a clinical way at the Activities a company had at the time of the invasion and how full an Announcement is and whether it has happened or is a promise.
Truth of Timing: We identify the date of the Announcement and compare its timing to peer companies to determine if the company was a Leader of Pack or Chicken .
Truth in Attitude: We look at the Attitude with which the Announcement was made, in Leadership statements against Russia and Altruistic donations to Ukraine.
Truth in Effort: We look at what level of Sacrifice a company is making on the basis that a company not withdrawing with less Exposure to Russia should get a lower rating than a one with high Exposure; and that a company taking action with a lot of Exposure should get a higher rating that one with little Exposure.
Truth in Power: We look at the economic impact a company could make on Russia if it chooses to, on the basis that the more Power it wields, the greater moral duty it has to use it.
In our system, there are dozens of sub-factors considered under the headings of Degree, Speed, Attitude, Exposure, and Power. This range of considerations and their investigation reveal, as we say, many Shades of Red, which are separate moral categories into which we sort each investigated company’s invasion reaction.
First, fairness is assured by a taxonomy of corporate morality delivered through a single set of rules, our Rating Methodology, against which every company is judged equally.
Then, our 360-degree rating system avoids two companies with entirely different moral behavior being classified in the same catch-all category – such as out of Russia/still in, or fast/slow. Instead, the two companies will end up being judged by us into one of about 65 categories, so they are fairly credited or otherwise for their different behaviors.
The Rating Methodology is applied in a standardized way, with raters systematically applying the rule book to each company, including verifications by different raters not influencing each other, with the result that companies are scored consistently.
At the end of this process, the resulting five-dimension scores are not balanced by humans. Each company is classified into one of about 65 categories, which we call Moral Badges, without any subjectivity by using a ‘linguistic algorithm’ that picks the badge formulaically from a company’s five scores. Likewise, each Moral Rating result is generated objectively by the five-dimension scores being put through our Moral Algorithm.
Despite having a methodology designed to maximize the number of rating decisions that can be taken objectively according to a rules-based system, the complexity of the issues and lack of perfect information means that we are of course obliged to use our own judgment in applying the methodology to specific cases. Nevertheless, we try, as a minimum, to standardize such judgments by requiring a different analyst to make their own assessment and then reconcile any differences with a third colleague. Thus, we also try to standardize even the subjectivity in the process.
We deliver this in several ways:
First, by disclosing Rating Methodology, so companies know as much as practically possible about how they are being judged and how their future actions will be judged, down to significant detail for each of the five dimensions.
We also show how the five-dimension results are combined to arrive at the final Moral Ratings for companies by disclosing the Moral Algorithm , the theory behind each of its components, and, in a pop-up box beside each company’s Moral Rating, the calculation behind the resulting Moral Rating the company obtained.
The components of each Moral Badge is also disclosed on the home page, so it can be tied directly to the five scores each company obtained.
In short, we show how we reach the five scores and then how they are translated into our final ratings. This is not a black box process being managed in a dark room.
Since company’s behavior is a moving picture based on world events and pressures that they face to do the right thing, which causes them to ‘catch up’ with other companies that did this earlier, we want to give credit to companies that move fast and fully.
We do this by measuring the company’s first disclosed or reported action (which we call the Announcement). Any updated information caused by later developments doesn’t allow the company to hide any shortcomings in its initial action. See Indelible Ledger.