Catalyst Blog

Companies should have a conscience—gone are the days when profits, and profits alone, can grow a sustainable business. But how do smart companies boost their levels of corporate social responsibility (CSR)? As Catalyst’s Rachel Soares, Senior Associate, Research, explains, gender-inclusive leadership and increased CSR go hand in hand.

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What is the number one goal of a corporation? Seems like a foolish question—flip open any MBA textbook and the “right” answer is obvious: profit maximization. But is it really so simple?

If companies haven’t turned their ears to the Occupy Wall Street protestors yet, they should. The growing movement reflects an important trend in public opinion: 71% of Americans report an unfavorable impression of Wall Street and large corporations. It’s clear that while companies need to make money to survive, profit maximization, without regard to consequences or risks, is not a strategic business practice.

Cue corporate sustainability.

Through its focus on stakeholder relations, a key tenet of corporate sustainability is CSR, or corporate social responsibility—a consideration of the organization’s impact, both positive and negative, on the world. Companies committed to CSR pay more than lip service to their stakeholders, looking beyond the interests of quick-buck investors. They are positioned for long-term growth.

For members of Generation Y (that’s me), CSR isn’t just a passing fad. A company’s CSR activities are a visible way to judge their values. And one easily investigated metric—something that we at Catalyst measure for every Fortune 500 company each year—is the representation of women in senior leadership. Gender and Corporate Social Responsibility: It’s a Matter of Sustainability, a study I recently authored with Harvard Business School’s Christopher Marquis and Matthew Lee, shows that companies and society win when business leaders are gender-diverse.

My co-authors and I found that across a period of ten years, companies with more women board directors and more women corporate officers donated significantly more charitable funds than their less-diverse peers. Each additional woman board director translated to an added $2.3 million in annual philanthropic giving. And for every percent increase in woman corporate officers, companies gave an additional $5.7 million.

These findings can’t be explained away by factors other than gender diverse leadership. Women leaders still had a significant positive effect after controlling for financial performance, company size, and industry. While this could be a case of the chicken versus the egg, other research suggests that diverse leaders are employed before increases in CSR are observed.

So why might this be? We believe that operating with gender-inclusive leadership can provide diverse perspectives on fairness, which may broaden the company’s understanding of CSR and lead to greater philanthropy.

Obviously, CSR isn’t just about the quantity of philanthropic donations. The quality of initiatives is important too. We speculate that when leaders spotlight gender issues in their CSR strategies, for example focusing on the importance of women as customers and suppliers, they often position their organization for sustained growth, and the payoff extends beyond the company to society at large.

So the next time you are looking to invest, make a purchase, or take a job offer, consider the gender diversity of the company’s leadership. It might point you to a company that pays attention to its stakeholders, and not just the next quarter’s balance sheet.

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Rachel Soares conducts research on corporate governance and women in leadership, and oversees the annual Catalyst Census reports of the Fortune 500. She is also a member of Catalyst’s Work-Life Issue Specialty Team. Through her current role at Catalyst and prior positions, she has extensive experience working with quantitative and qualitative research methods in leadership, organizational change and effectiveness, and work-family contexts. She received her M.A. in Organizational Psychology from Columbia University, Teachers College, and her B.A. in Psychology and Sociology from New York University.

Catalyst turns 50 next year—the big Five-0. Clicking through our multimedia Timeline last week while flying back from the Middle East, I was struck by how we’ve evolved as an organization.

In the beginning, we functioned largely as a career center supporting women one at a time as they tried to advance in the corporate world. In the 1980s, we recognized that the problem wasn’t the women—it was female-unfriendly workplaces. So we shifted our focus from “fixing the women” to “fixing the workplace.”

Over the past decade we have established offices in Silicon Valley, Toronto, and Zurich, and have forged close relationships with organizations in Asia, Latin America, Africa and the Middle East. Catalyst events now span the globe too—from Tel Aviv, to Toronto, to Mumbai, London, Oslo and beyond.

In many ways, Catalyst is now entering a third stage in our evolution. Empowering women is the key to economic growth and sustainable development. So today we’re not just fixing the workplace.

Now, we’re fixing the world!

One year ago, we launched Catalyzing with the belief that until women achieve parity in business leadership, we will be marginalized in every other arena. More than 70 blog posts and 65,000+ page views later, we’ve only scratched the surface.

What gives me hope amid entrenched pay and leadership gaps, and setbacks like defeat of the Paycheck Fairness Act, are inspiring interactions with women and men who share our vision of changing workplaces and lives. As I blow out the candle on our 1-year anniversary, I wanted to leave you with a selection of comments from readers. Brace yourself—they are funny, angry, and even sad. Taken together, they serve as a potent call to action, and a reminder that we will not stop until we achieve our goal:

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Ilene, congratulations on using your blog to “catalyze” the use of the gender lens. The Economist’s “We Did It!” cover aside, women have a LONG way to go and corporations need to look at their advancement efforts with fresh eyes before we get to the 50% at the top that women reflect in the pipeline.

Susan Colantuono 2010/02/16 at 9:33 am

The glass ceiling is not only still here, it’s an illusion that it is window pane thin. It is about 10 meters thick and all you can see when you look up is the bottom of a man’s $350 shoes looking down at you like a gerbil treading a wheel that goes nowhere for their own amusement.

susan clark 2010/03/04 at 6:00 pm

How can you fix what you don’t know is broken?

I have a much loved uncle who, when I told him about the wage gender gap refused to believe it existed….I then spent the remainder of that Thanksgiving breaking down how it occurs, why it hasn’t stopped, etc., and by the time he left, he was writing a letter to his congressman asking why there weren’t laws against it. Hopefully there are more ah-ha moments happening every day

Shayna 2010/04/09 at 3:33 pm

We hear so much about the importance of senior men mentoring women (and it is important), but it’s very refreshing to reverse this and think about the benefits of women mentoring men.
Lynn Harris 2010/04/28 at 1:54 pm

I have implemented many mentoring-projects for women with mentoring men in Austria. Thanks for your blog, because I really think that it is time for an change. We have so many good women, who would be great mentors for open minded men.

Daniela Stein 2010/05/04 at 3:19 pm

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To mark the end of 2010—and my final Catalyzing post until January 2011—I asked my colleagues at Catalyst what they wish for in the days ahead for women and work. Here are Catalyst’s top ten wishes for 2011:

We wish for…

10. Inclusive, agile work cultures that reward results rather than face-time.

9. Companies around the world to “get it” that more women in senior positions can improve financial performance.

8. Men to champion and sponsor the many talented women they work alongside, question the tyranny of macho norms, take more responsibility for child-rearing and the division of labor at home, and  become truly equal partners to women.

7. An acknowledgment that women are the key to solving the world’s problems.

6. Managers to accept and celebrate the career commitment of mothers returning from maternity leave.

5. Headline writers to actually link headlines to story content—instead of writing unrelated, misleading, or “sexy” headlines that do not reflect the more thoughtful points in the article.

4. An end to the false notion that women don’t help each other advance in the workplace.

3. The realization that diversity is not a zero sum game—women, men, families, business, and the economy have a lot to gain from inclusive workplaces.

2. Equal pay for equivalent work—eliminate the gender pay gap once and for all! 

1. More optimism from both women and men who doubt that all this change is possible.

What do you want to see in 2011 for women and business? Let me know in the comments below!

One by one, people are starting to get it. What’s good for women is good for the world.

Last month began with the Women Deliver conference in Washington, DC on the economic impact of global maternal health. Then, days after the inaugural G(irls)20 Summit in Toronto, nearly 40 CEOs endorsed a UN-led initiative to empower women by promoting gender equality at work. The following week, the UN Economic and Social Council opened in New York with speakers calling for women and girls to be placed at the centre of the global struggle to achieve a set of UN development and anti-poverty goals.

All four events shared one simple message: women are the key to solving the world’s problems.

It’s all about access. When a woman accesses work and education, she can build a bustling economy in villages, towns and cities. When a woman accesses adequate healthcare, she can see to it that her  family’s health improves. When she can access women in political and business circles as role models, she becomes an active contributor. And when she gets access to political or corporate leadership, she can shape policy to further improve the lives of women, men and children.

It’s a cycle of positive change. And women are at its core.