November 4, 2004
“Inaugural Businesswomen’s Sustainability Leadership Summit”
Presented by the Women’s Network for a Sustainable Future with Catalyst
NETWORKS MAKE THE DIFFERENCE
The first Businesswomen’s Sustainability Leadership Summit, presented by the Women’s Network for a Sustainable Future with Catalyst in November 2004 underscored the power of women’s networks–and networking generally– to make a difference in promoting significant corporate change. This was a common thread woven through a day of lively and challenging presentations and dialogue. Offering attendees a forum in which to connect with other senior women executives who share the convergent goals of creating more responsible business and promoting sustainability, the Summit encouraged from start to finish frank and compelling exchanges of opinions, personal experiences, and ideas among attendees and speakers. The gathering was designed to encourage attendees representing companies from a diverse range of industries to interact with their peers at other corporations. The quality of the dialogue underscored the impact of networking among businesswomen who share a passion for making a difference in areas such as corporate governance, environmental performance, community responsibility, diversity, and the advancement of women–within their companies and in the business community at large. The principal speakers—a former asset manager at one of Wall Street’s most prestigious firms, a senior vice president of one of the world’s largest banks, the president of a pioneering research organization focusing on women in business, and the CEO of an innovative global venture fund—had all experienced the singular power of networking with other high-powered women throughout their careers. All stressed the professional advantages of networking that allow women to build relationships fostering business responsibility and sustainability. Noreen Harrington, the Wall Street veteran who initiated the investigation into illegal practices in the mutual fund industry, highlighted the need for greater attention to business ethics and illustrated how successful women are speaking out when they see improprieties. She also emphasized how a network, while benefiting those included in it, can, if used improperly, also hurt those excluded from it—in this case, small investors. Her example also demonstrates how a single person can still make a difference and influence others.
While working on Wall Street, Harrington came across trading irregularities at Canary Capital Partners, a hedge fund managed by her former employer, Stern Asset Management. She made the initial phone call to New York’s Attorney General Eliot Spitzer, alerting him to the irregularities. After the scandal broke, one in every four mutual fund companies were found guilty and fined some three billion dollars, according to Harrington. “Ninety-five million people were affected by this, and a large number of people knew and prospered, but didn’t do anything”, said Harrington about some of her co-workers in the industry. “Billionaires were stealing from people with small assets and accounts.” Again, as in the cases of whistle-blowing at Enron and the FBI, it was a woman who spoke out about irregularities in her own field, a fact, Harrington said, that didn’t come as a complete surprise to her. Referring to a report from the New York Times, she explained that women are more likely to be whistleblowers mainly because “they work because they want to be valued, they want to make a difference.”
Eliot Spitzer added another dimension to the phenomenon of female whistleblowers in an interview with CBS: “By definition, women aren’t part of the old boy’s network. And somehow the old boy’s network has generated this notion of, ‘Don’t tell anybody what we’re doing.’ Women who have begun to succeed, thankfully, on Wall Street are rising through the ranks and are saying to themselves, ‘Wait a minute, you’re doing what?’”
Interestingly, Spitzer’s focus on exclusion as a reason women blow the whistle was supported by Catalyst’ s latest study on women in business. Forty-six percent of women cited lack of access to informal networks as a main barrier keeping them from advancing in their careers. Catalyst is known for research and practical guides on retaining, developing and advancing women in business. Catalyst also offers advisory services to help companies develop effective ways to capitalize on the talents of all employees and to build inclusive environments.
Catalyst President Ilene H. Lang pointed out that while women occupy over half of all managerial and professional positions in the US, they comprise only 15.7 percent of Fortune 500 corporate officers and hold only 13.6 percent of board seats. They hold only 7.9 percent of the highest titles and represent only 5.2 percent of top earners.
As another Catalyst study called “The Bottom Line” underlines, supporting the advancement of women is not just seen as the right thing to do, it also enhances the company’s financial performance. “Our key finding was that, on average, companies with a higher percentage of women in top management financially outperformed companies with a lower percentage,” said Lang. Return on equity was 35 percent better and total return to shareholders was 34 percent better. The results of this study that covered five years of data for Fortune 500 companies presented a solid business case for gender diversity, argued Lang. “It is statistically significant, it is not random and it holds true across industries,” SHE said.
Lang noted that larger companies usually did better at promoting women. “Successful, large, global companies have to excel everywhere they operate,” said Lang. “They have to be employers of choice and they have to stay close to their target markets. For companies to be successful at this, they have to manage diversity well.” To get to the point of real diversity and truly accommodate women, it takes “a deep committed culture change. That is not easy for companies who think they are doing well already”, explained Lang. (More info about Catalyst’s research at http://www.catalystwomen.org)
Pamela Flaherty, Senior Vice President of Global Community Relations at Citigroup, witnessed this kind of culture change at her own company. She recalled the time when women were not allowed to eat in the corporate dining room. Citigroup has also come a long way on sustainability issues, partly thanks to input from external stakeholders and learning by business people within the company—again highlighting the power of networks, internal and external, to advance change.
Flaherty pointed out that only in the late 1990s did environmental and social concerns become more prominent. But in June 2003, Citigroup was one of the first of 10 leading banks worldwide to adopt the Equator Principles, voluntary guidelines for managing environmental and social issues surrounding project financing. The Principles cover issues like environmental assessments, natural habitats, forestry, and indigenous people as well as pollution guidelines. More banks have joined this network and today, 28 financial institutions have signed the Equator Principles. Various reports put their combined market share between 75 and 80 percent. Citigroup has also adopted other environmental and social risk policies; it tracks its own greenhouse gas emissions, and has a private equity program investing in sustainable forestry, renewable energy and clean technology.
“A company can be profitable and grow and do the right thing. It is mutually reinforcing”, stressed Flaherty. To meet these challenges, the company needs support of senior management and the right internal strategy. Explained Flaherty: “It is important to engage people from the business side. They won’t do anything if they don’t think it makes sense.” While there was initial resistance, real commitment has developed, particularly because the adopted policies help protect the company’s franchise.
Jacqueline Novogratz, founder and CEO of the non-profit Acumen Fund, offered one of the most tantalizing illustrations of how truly networked the world has become. She recalled donating a ski sweater to charity while still in high school. Seventeen years later, while managing a micro-enterprise organization in Rwanda, she encountered a young boy on the streets of Kigali wearing her very sweater, still with her nametag intact.
Acumen Fund, a non-profit global venture fund, provides financial support and management expertise to enterprises that deliver critical goods and services at affordable prices to the four billion people in the world who earn less than four dollars a day. Markets alone won’t solve the problems, and the current approach to development isn’t working, explained Novogratz. She looks at her venture capital firm for the poor as a blueprint for change, with potential for the poor to be active participants.
Acumen supports projects in three critical areas: Health Technology, Housing and Finance and Water Innovations. In identifying new enterprises, Acumen focuses on business fundamentals such as design, marketing, pricing, distribution and financing. It looks for entrepreneurs with strong leadership and for organizations with the capacity for significant growth. The fund supplies grants, loans and equity investments, helps build supportive networks, measures results and demands accountability. Acumen has raised $20 million since its incorporation in April 2001 and has 100 investors.
One of the initiatives supported by Acumen in Tanzania made Time Magazine’s list of the most amazing inventions of 2004: A new generation mosquito net, made of durable polyethylene and impregnated with a long lasting organic pesticide. The invention has not only protected more than 100,000 families in Africa from Malaria, which kills about one million people every year, but also has created over 100 jobs with salaries of 20 to 30 percent above average. (More about Acumen and its work at http://www.acumenfund.org)
The women business leaders who attended the Leadership Summit also participated in round table discussions about how sustainability can best be integrated throughout an organization, how companies can link good governance and social responsibility practices effectively and how women’s leadership initiatives can be woven into corporate citizenship programs. And, they agreed, a key strategy is networking: executive women need networks to advance, and business needs networks to engage with stakeholders—including NGOs—and to learn about opportunities to build socially responsible business practices into their operations. Participants agreed that only corporate management committed to responsibility and sustainability can ensure that employees share these values. This is best done by integrating them into performance measurement systems that reinforce accountability and transparency. Equally important, incorporating sustainability issues into the business strategy insures the long-term interest of the company.
Dianne Dillon-Ridgley, a member of WNSF’s advisory council who moderated the round table discussions, underlined the important role women play in this area: “A lot of times, women have been given the position of director of environment, philanthropy or sustainability, because these positions were considered dead-end positions, not in line towards CEO. But women have taken these positions and used them to push institutions to change. They created change that would not have happened otherwise. The Women’s Network for a Sustainable Future harvests and hones that experience to really shift the corporate sector and accelerate companies’ moving towards sustainability.”
Due to the very positive response to the summit, WNSF plans to hold a second summit in 2005 and to design a sustainability workshop based on the principles highlighted in talks by the speakers—ethics, diversity, environment and community engagement. The WNSF workshop will be tailored for several audiences, starting with internal corporate women’s networks. The 2005 Summit will again offer executive women a high-level forum in which to exchange ideas, learn from pooled experience and co-create tools and best practices for women’s leadership on corporate responsibility and sustainability.
Moderator: Ann Goodman, Executive Director, WNSF.
- Noreen Harrington, WNSF Member Advisory Board
- Ilene H. Lang, Catalyst President
- Jacqueline Novogratz, Acumen Fund Founder & CEO
WNSF thanks BP, JPMorganChase and Pfizer for sponsoring the Summit.
For more information about the 2005 Summit or the workshop, including sponsorship opportunities, contact: Ann Goodman
Women’s Network for a Sustainable Future
Please direct inquiries to: email@example.com