By Sarah Irving
Tuesday, March 14, 2006
Women in the United Kingdom dominate the rank-and-file of ethical businesses but the bulk of the well-established companies are run by men. A new award given out this week strives to boost recognition of female social entrepreneurship.
LONDON (WOMENSENEWS)--The women on the short list for a new business award all run U.K. businesses that look beyond shareholders to the wider needs of the environment and society. Profits matter, but they aren't the only story.
Juliet Davenport's Good Energy churns out wind, solar and small-scale hydroelectric energy. Lizzie Vann's Organix Brands produces organic baby meals. Su Hardy's Mooncup provides reusable sanitary protection to protect forests from being cut for paper pulp. Safia Minney's People Tree sells glamorous women's fashion--from office suits to party dresses--that aren't made by exploited garment workers.
One of them will win the first Women in Ethical Business award, a new annual prize for a female CEO to be announced in London on March 16.
While women dominate the ranks of the half-million people working in the United Kingdom's 15,000 social enterprises, the most established of those companies are more likely to be run by men than women, according to a 2005 report by U.K. economist Rebecca Harding. While women outnumbered men by a ratio of 6-to-5 in setting up new social enterprises, 60 percent of the established businesses--around 9,000--were male-run, according to Harding's report, published by the Global Entrepreneurship Monitor, a joint research project of the London School of Business and Babson College in Wellesley, Mass.
In response to the findings, Anglo-Dutch Triodos Bank--which loans money exclusively to ethical businesses--decided to sponsor the award, which is designed to heighten recognition of female entrepreneurs, help female entrepreneurs attract financing and improve their chances of starting businesses that will survive more than a few months or years.
The boost, say some, is sorely needed, and not only for women in this particular sector.
The only securely funded business startup support in the United Kingdom comes from BusinessLink, a national support service for small businesses, where nearly 80 percent of clients are men, according to Prowess, a national business-advice network for women, based in Norwich.
On March 2, meanwhile, the government closed the Phoenix Fund, aimed at promoting small businesses, which has removed over $300 million from the funding available to startups. Run by the Department of Trade and Industry, the Phoenix Fund was principally aimed at businesses in disadvantaged areas and regions such as the north of England, and bankrolled training grants, startup costs and business support services.
"While the chancellor says 'the key factor in increasing the U.K.'s business startup rate is getting more women to start their own businesses,' he has taken the ax to the only dedicated funding available for women's enterprise support," Prowess said.
Finance was cited by 36 percent of leading female entrepreneurs in a 2005 survey by Real Business magazine as their main problem, ahead of factors such as personal confidence and family responsibilities.
The awards program was spearheaded by Triodos Bank marketing manager Karen Martin after seeing the statistics from the Global Entrepreneurship Monitor and Prowess. Triodos--which extended $500,000 of financing for ethical businesses in 2004--will give this year's winner a business-support package worth about $4,300. "We want to demonstrate that women entrepreneurs really are driving forward a way of doing business that values people and the planet as well as profit," Martin says. "We hope that mainstream recognition will bring more attention to the businesses and to challenges such as funding faced by female entrepreneurs."
The judges of the ethical-business award, all of them women, are drawn from businesses in some of the original fair-trade sectors, such as coffee and chocolate.
Packages with the Fair Trade Foundation label are now common sights on supermarket shelves and tell buyers that suppliers guaranteed fair and stable prices to producers of commodities such as cocoa, coffee and tea, which are often unstable on world markets. Such products have undergone an inspection process designed to ensure that workers and producers receive a good deal.
One of this year's judges is Sophi Tranchell, managing director at London-based Day Chocolate Company.
Her company produces leading U.K. fair-trade chocolate brand Divine, launched at a meeting in 1997 where international workers' rights activists decided to combine forces to promote fair trade.
The Day Chocolate Company is one-third owned by its cocoa supplier and grower Kuapa Kokoo, a Ghanaian cocoa farmers' cooperative based in Kumasi. In addition to ensuring price stability to growers, Kuapa Kokoo and Day Chocolate have promoted women at all levels of the cooperative's nationwide network, encouraging women to act as local co-op representatives. Women, Tranchell says, are now equal with men in this role and participate in allocating bonuses to the farmers for their production and setting quotas for coming years.
Day Chocolate last year reported a profit of over $780,000 on sales of over $13 million. It employs 14 people at its London offices, 10 women and four men.
Tranchell says building the company has been an uphill climb and the ethical businesses are often hard to sustain, no matter who's in charge, man or woman.
The international dimensions of her startup meant that Divine received substantial financial backing from the government's Department for International Development and she attributes some of the company's success to the tight accounting standards enforced as a condition of the funding.
"Being a fair-trade business can mean that you get stereotyped as worthy, and it's difficult to strike a balance between charging prices that can compete with non-fair-trade companies like Mars, Nestle and Cadbury--which control 80 percent of the U.K. market--whilst also fulfilling the demands of fair-trade pricing," Tranchell says. "Having a very strict accounting regimen helped with that."
Tranchell says that many women are drawn to the idea of working for small, socially minded businesses and like the collegial atmosphere. However, she thinks that women in the United Kingdom--where a gender pay gap leaves full-time female workers earning 17 percent less than men in comparable positions--should think twice.
"However much a small business tries, big companies like Microsoft can probably be a better employer to high-status employees as they can offer better conditions, like longer maternity leave, as it has less impact as a proportion of the business," she says.
Tranchell notes that the majority of workers in ethical businesses are in their 20s, when they are more likely to put up with lower wages and less stable job security.
"Older women often undervalue their own skills base," she says, "so it needs a lot of work to get them to have confidence and also to invest their time in managing people to delegate to, instead of trying to do all the work themselves. Historically women are not used to managing people and tend to just stay late and do the work themselves."
Tranchell says two of the four people in Day Chocolate's senior positions are female.
Sarah Irving is a freelance writer based in Manchester, Britain. Her work can be found at http://www.freelancefusion.com/uk/sarahirving.
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