Sustainable Innovation


More women on boards: improved sustainability performance

‘Corporations build better societies if they have balanced boards’. Kellie McElhaney found that 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, Center for Responsible Business at the University of California, Berkeley’s Haas School of Business.

McElhaney of UC Berkeley Haas School of Business recently published a paper that identifies the relationships beween female coproate directors and corporate sustainability.  The study, “Women Create A Sustainable Future,” is co-authored by Sanaz Mobasseri, PhD candidate, Berkeley-Haas Management of Organizations Group, and sponsored by KPMG and Women Corporate Directors (WCD). MSCI Inc. provided the dataset of Fortune 1500 companies and their environmental, social, and governance (ESG) performance, which they have been measuring since 1992.

To measure corporate performance, the authors reviewed each organization’s ESG performance. Environmental criteria include steps to improve energy efficiency of operations, to measure and reduce carbon emissions, the reduction of packaging, and investment in renewable power generation. Examples of social factors include health care access for underserved populations in developing market supply chains, strong employment benefits and performance incentives, products with improved health or nutritional benefits, and products and services to communities with limited or no access to financial products. Finally, governance is defined as avoiding corruption and bribery, clean accounting, and a high level of disclosure and transparency about business practices.

‘The sweet spot is three’. Companies with at least three female board members had a better ESG 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,” says McElhaney. McElhaney interviewed several female directors to learn more about their personal experiences on a board.

Source: http://responsiblebusiness.haas.berkeley.edu/Women_Create_Sustainable_Value_FINAL_10_2012.pdf


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