By Joe Zlomek

When they think about ethics, most people remember The Golden Rule: "treat others the way you'd want to be treated." 

In real estate and other financial businesses, regulatory agencies push ethics much further. Many states, as a condition of issuing a real estate sales or broker's license, demand that licensees pledge to treat clients and customers BETTER than they way they'd want to be treated.

Which, it turns out, may not be as big a sacrifice as it sounds.

Corpedia, an Arizona firm that helps companies comply with and measure their risks in meeting legal and ethical mandates, claims that being ethical pays off handsomely. It reports that the stocks of publicly-held companies which do the right thing by their stakeholders outperformed stocks listed in the Standard and Poor's 500 by more than 370 percent over five years.

"The right thing" can be measured in many ways. Corpedia defines it as being recognized for corporate citizenship, for the ability to attract and keep good employees, and for environmental consciousness. Businesses who adhere to those kinds of moral principles, according to Corpedia's research, tend to be more profitable over time than those that don't.

For its comparison, Corpedia in November 2006 created what it calls an "Ethics Index," a list of companies that meet its moral principles criteria. They included Intel, Starbucks, The Timberland Company, and Whole Foods Market, and others. According to Corpedia, independent experts repeatedly cite these selected firms on lists of quality corporate citizens, admired companies, or best companies for which to work.

Then Corpedia matched the results of Ethics Index companies to those listed in the S&P 500. It found that the average five-year return on the Ethics Index was 102 percent, compared with 26 percent for the S&P. As a result, Corpedia suggests that investors in Ethics Index companies would have earned returns on their investment almost four times higher than the market in general during the 5-year period.

"Consumers want the companies they frequent to do business in a manner they can respect," says Alex Brigham, Corpedia president and CEO. "The financial implications are clear: to be ethical means to be profitable," he adds.

Ethical companies enjoy other benefits besides profit, Corpedia notes. They also seem better positioned to attract customers away from competitors, prevent their own customers from defecting, enter new markets, attract and retain a superior workforce, more easily obtain or develop proprietary intellectual property, offer new products and services to the same customer, and command higher prices.

So, will an ethical real estate agent similarly earn more business than one with fewer scruples?

Dr. Kevin Boileau would bet money on it. Boileau, executive co-director of the Ethical Lending Foundation and author of the "Real Estate Ethicist" column for Inman News, contends in a July 2006 Inman article that a licensee's fiduciary duty to clients "requires the highest good faith and fair dealing," along with a willingness "to never put his own interest above the interest of his client." Successfully fulfilling the fiduciary duty, Boileau promises, creates "trust in consumers and in potential customers (that's) good for business."

When considering future real estate transactions, clients report they most often decide to return to the same agent -- or use a different one -- based on their perceptions of how the agent treated them in an earlier transaction. If real estate agents put clients' interests first, provide superior service, are consistent in follow up, attend to details, and ensure each transaction is as hassle-free as possible, there's a strong likelihood they will enjoy both return and referral business for years to come.

Proving there's gold in The Golden Rule.