Want to be more socially and environmentally responsible? We'll be coming out with a new tool kit soon. In the meantime, appoint a couple more women to your board. New research shows that the number of female board members correlates with sustainability performance. The more women, the more sustainable, says corporate responsibility consultant Kellie McElhaney, who recently criticized Apple’s appointment of another man to an already all-male executive team.
McElhaney’s new research goes one step further. Companies with one or more women on their boards are significantly more likely to have improved sustainability practices.
“This is not a women’s or men’s issue, it’s a collective and business opportunity,” says McElhaney who is also faculty director for the Center for Responsible Business at the University of California, Berkeley’s Haas School of Business. The study, “Women Create A Sustainable Future,” was sponsored by Women Corporate Directors and KPMG—which shouldn't be a surprise seeing as how the company has already steeped its business in social responsibility (case study).
“We also found, like researchers before us, that the sweet spot is three. Companies with at least three female board members had a better ESG (environmental, social and governance) performance, but we’re talking about very few companies who meet this threshold—just three of the 1,500 we studied—Kimberly-Clark, General Motors and Walmart."
McElhaney interviewed several female directors to learn more about their personal experiences on a board. “Women and sustainability are two sides of the same coin. Corporations build better societies if they have balanced boards,” says interviewee Halla Tomadottir, executive chairwoman and co-founder of Audur Capital.
The study’s authors also spoke with former U.S. Secretary of Agriculture Ann Veneman, who serves on the board at Nestle. “The voices of women are critical in advancing the goals of corporate shared value,” says Veneman in the study. Other female directors told McElhaney that they evaluate invitations to sit on boards based on the organizations’ ESG factors.
Dina Dublon, former executive vice president and chief financial officer of JP Morgan Chase, is a director at PepsiCo, Accenture and Microsoft. “There is an element of self-selection for me,” she says. “I choose to serve on boards who have openness to ESG issues because I care deeply about these issues.”
McElhaney points out that “causality” remains problematic. “Is a company that’s not managing risk like ESG going to realize that it’s a risk not to have more women in senior leadership. Which happens first, adding more women to a board or improving sustainability initiatives?”