The power of nun: taking a lead role in shareholder activism
As a shareholder representative who believes in good pay for bottom-rung workers, Ruth Rosenbaum occasionally reminds corporate executives across the table from her that she has a doctorate in economics. In other words, she knows something about business.
But she may get more clout sometimes, she says, when she tells them something more personal: She's a nun.
That's partly because living under vows carries with it a certain moral authority, she says, even in plush boardrooms. It's also because nuns are well-connected in ways that can stir even high-powered executives to action.
"Companies will say, 'We have this program in country X' " to address a local problem, says Sister Rosenbaum. "And I have no qualms about saying, 'We have sisters, or we know sisters, operating there. I'd like to talk with them to get some feedback about how this program really works on the ground.' Just saying that anchors the dialogue in a deeper reality."
In one niche of a financial world known for crisp suits and material passions, nuns in modest business attire have emerged as an unlikely group of senior stateswomen. Their role, earned through three decades of private-sector activism, has become one of representing both shareholders and the poor, whom they believe feel the impact of corporate policies most intensely.
As investors gear up for hundreds of shareholder meetings over the next four months, nearly half of the first 299 resolutions filed reflect the initiatives of religious investors. In this faith-filled milieu, newcomers to ethical investing are sometimes surprised to see the field's activism led by dozens of nuns and more than 100 orders of religious women, who invest their communal funds with higher goals in mind.
In 2004, Bill Mills launched the Good Steward Fund, a fund of hedge funds that caters to an ethically minded clientele. But he says he had no social mission of his own until last year, when he attended a meeting of faith-based investors in Philadelphia hosted by the Sisters of St. Francis. "As I got to know these folks, they would say [such things as], 'Sister over there was very instrumental in the first campaign against Philip Morris,' " says Mr. Mills, a Birmingham, Ala., entrepreneur. He knew that social investing had won a number of successes over the years, but says he was inspired "by getting to know the individuals who in fact had made all that happen by virtue of their commitment.... I realized ... how much more there was to do and could be accomplished."
Today's investors owe a debt of gratitude to the sisters who laid the groundwork for dozens of shareholder proposals on this season's proxy voting ballots, say some long-time participants in ethical investing.
Investors "who are concerned about how to express their opinions to [companies] are given an opportunity by sisters and others in the faith community to vote on shareholder resolutions on specific issues," says Tim Smith, president of the Social Investment Forum, a network of socially responsible investors. "So it's a platform that's been provided to them."
Nuns routinely work behind the scenes. Sometimes religious orders own stock in a firm and send a nun to represent their social agenda. Nuns also head groups of religious investors, who stand to get a better hearing as a group than they would alone.
Victories don't come often, and marshalling support from even 20 percent of shareholders on a ballot issue can take years. Even so, nuns have seen some successes. Last month, for instance, New York attorney general Eliot Spitzer credited a nun and her allies with persuading General Electric to disclose the $122 million it spent on lobbying, public relations, and legal fees fighting efforts to clean three contaminated sites in New York, Massachusetts, and Georgia.
Sometimes activist sisters have to get their hands dirty. An Alcoa shareholders meeting in 1996 included low-level Mexican employees who had watched the company pollute local water sources and had routinely found bathrooms locked during breaks. Their exchange with management happened with help from Sr. Susan Mika, a Texan Benedictine who had used religious connections to visit Mexico, take notes, and round up a crew of witnesses. Soon after the meeting, Alcoa's CEO visited the Mexican site, fired the regional manager, raised workers' pay, and unlocked the bathrooms.
For Sister Mika, such activism on behalf of religious investors builds directly on her previous work as a mother superior for 18 nuns in the monastery at Boerne, Texas. All of it, she says, has been part of her calling to live by the simple, work- and prayer-focused Rule of St. Benedict. "Benedictines are very big on stewardship," Mika says. As investors, that means encouraging "sustainable" treatment of all human and natural resources. She sums up the approach as, "We have the Rule in one hand and the Wall Street Journal in the other."
Far away, in New York City, Sr. Patricia Wolf found her way into ethical investing after eight years of teaching, first at an East Harlem junior high school and later at a correctional facility for boys. In 1975, with nudging from the president of the Sisters of Mercy, she explored how the religious order might channel investments into needy communities.
"It was like this eye-popping moment for me," she recalls. "Whole communities were excluded from loans. Banks were buying up blighted communities. [The experience] taught me a way of systemic thinking" that now informs her work as executive director of the Interfaith Center for Corporate Responsibility. It is a 30-year-old coalition of 275 faith-based institutional investors whose combined assets exceed $110 billion.
Like Mika, Sister Wolf sees shareholder activism as a natural outgrowth of her religious order's ideals. In her case, the Sisters of Mercy emphasize justice for the poor. Example: At Wolf's suggestion, the Bronx-based Sisters of Mercy bought stock in Synagro, a fertilizer pelletmaker with a plant in the Bronx, in order to lean on them to clean up emissions caused by burning New York City sewage in the pelletmaking process.
Some nuns point out that the sisterhood entails varied labors for the glory of God. While some feed the hungry and others advocate for humanitarian programs, a third group - the shareholder activists - aims to change entrenched structures that, in their view, perpetuate injustice.
"It's part of who we are," says Rosenbaum. "It's not enough [to feed the poor]. We have to say, 'What needs to change so they're able to feed themselves?' "
Today, sisters are pushing firms to look into the costs that HIV/AIDs and global warming could have on their businesses and industries. As they press on these and other issues, the sisters remind observers that for them, even the best business practices will always be just a means to a higher end. "It's a not a calling to corporate responsibility," Wolf says. "It's a calling to an expression of commitment in service to the poor."