When it comes to selecting companies for business ethics, corporate beauty contests are now all the rage.

Which is what caught my attention when Ethisphere, one of the better ethics journals around, ran its list of the world's most ethical companies for 2007.

The Ethisphere methodology is solid, ranking company performance in areas that include governance and transparency, corporate citizenship, litigation and controversy, ethics and compliance programs, the way the company works with its peers, innovation and trade partner analysis.

The judges talk to stakeholders and examine the systems the companies have to deal with issues.

The result is an interesting list and some of the names, like McDonalds and Starbucks surprised me, as they have not been without some controversy.

Still, the value of these sorts of exercises is that they encourage companies to take ethical issues more seriously and put the right systems in place.

But these beauty contests are not perfect.

Beauty is in the eyes of the beholder and besides in a lot of cases, the focus seems to be on systems and not outcomes.

I explain my reservations in a piece I wrote here.