Each year, Forbes takes a look at the companies that rate the most trustworthy, based on accounting and governance practices. Recently, for example, we covered a report – compiled at our behest by, MSCI ESG Research – on the most trustworthy companies in the United States, which you can read here.
We also explored which financial firms are the most trustworthy, for which MSCI provided us a similar analysis of the 50 companies in the realm of finance that have recently, and over past years, shown themselves to be honest and transparent in their accounting. For a look at 10 of the most consistent such firms, check out our slideshow below. For a look at the full 50-company roster, scroll to the bottom of this article.
In looking for trustworthiness, MSCI calculated the companies’ AGR ratings—“Accounting and Governance Risk”—the composite scores by which organizations are judged. Factors considered include high risk behaviors like regulatory actions, amended filings, revenue and expense recognition methods, and bankruptcy risk.
One of the most consistent firms on this year’s list is State Auto Financial Corp., a midsize insurance firm which has found a place on the roster of most trustworthy companies every year going back to 2013. State Auto’s most recent AGR score is 99, and for the past four quarters it has maintained an average rating of 91.
Another performer in recent years is Sandy Spring Bancorp, a small bank headquartered in Maryland. Like State Auto, the firm has found a spot on FORBES-MSCI’s roster of trustworthiness since 2013, and it's most recent AGR score is 90. Over the past four quarters it has maintained an average score of 90.
Community Trust Bancorp, founded in Kentucky, is also a noteworthy appearance on the list. It has graced our roster of trustworthiness over the past three years and in this latest quarter earned an almost perfect AGR score of 99 points. In fact, Community Bancorp has earned an average of 99 points for the past four financial quarters.
Another financial company – a midsize bank based in Kansas, Capitol Federal Financial – has also average a 99 point rating over the past several quarters, including the one rounding out 2016. It appeared in the list in 2014 as well.
In rating the companies, each firm begins with 100 points and then points are taken off for blips or haziness or opaqueness in its financials, says Agnes Grunfeld, vice president at MSCI. “Mainly, AGR looks for risk factors that indicate the financial statements might be misleading,” she explained. “We’re looking for extreme values in a large set of ratios. We’ve got about 55 metrics and about two-thirds are accounting ratios—everything comes from public information.”
Additionally, MSCI rates company governance as part of the analysis and made sure no company made the list whose leadership did not score 4.5 or more out of a possible 10 points. Factors analyzed in rating governance include quality of the board of directors, pay practices, ownership and control.
