How to be good.

From the viewpoint of classical economics, the structure of a company is pretty simple: There are just two entities--the managers and the owners. Managers either respond to the wishes of the owners, in modern terms this means the stock price rises, or they don't. Good managers get rewards, bad managers get the boot.

Now consider for a moment the babbling array of stakeholders surrounding companies today. Customers, employees, environmentalists, regulators, politicians, op-ed writers, shareholder activists, the list goes on. As the Internet has spread knowledge about the inner workings of capitalism--by and large a great thing, since it sows the seeds of competition to dark corners of the world still run by despots and fools--it also left the company books wide open. Everyone, by one proxy or another, seems to have a vote on how companies behave, price, hire and invest.

That's what's driving the whole business-values movement. Good companies have always been good, and they've always been out there, but bad companies, or simply shoddily run companies, increasingly must pay a price for their misdeeds. Call it the miscreant tax.

But if not stock price--or its parallel, earnings--then what? In this issue, we asked hundreds of companies across Latin America to tell us how they know when their corporate social responsibility programs are working. Putting some numbers on an idea is pretty hard, but companies are starting to do it. And they're starting, in some cases, to compensate their managers for meeting those goals.

Interestingly, many said, public image isn't really the big idea; they're more interested in getting their employees excited about coming to work everyday. Now that's bottom-up thinking at its best.

Greg Brown 

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P.S. Speaking of competitiveness, Mexican competition regulator Eduardo Perez Motta has his work cut out for him.

HOW DOES YOUR COMPANY RATE? ART DIRECTION: B.Y. COOPER