Business leaders focusing on sustainability, ethics and long-termism got a rude awakening when Danone chief executive and chairman Emmanuel Faber was successfully ousted by activist shareholders for not striking “the right balance between shareholder value creation and sustainability” earlier this year.
Ann Cains, Vice Chair of Mastercard, conceded that “the quarterly cycle of financial reporting can make life very difficult for companies”.
“You certainly can’t ignore the drivers of profitability, but what you can do is look at those drivers and say what’s important to us and what branches out into that area of sustainability,” she says. “Don’t play outside your space. Don’t do things that come unnaturally to you in terms of the core business.”
As a result, Mastercard is thinking about financial inclusion – something Cains describes as “very germane” for a financial services firm – and has set up the Mastercard Center for Inclusive Growth to look into the impact of financial inclusion.
Last year, Mastercard strengthened a 2015 pledge with the World Bank to bring 500 million excluded people into the financial system – promising to connect 1 billion people to the digital economy by 2025.
“A good thing is that a lot of those people are women,” says Cairns, who sits on the Advisory Council of the Global Institute for Women’s Leadership, chaired by former Australian Prime Minister Julia Gillard.
“Just as women who have wealth don’t have as much access to wealth products, women are more financially excluded at the other end of the ladder. There’s a gap everywhere when you talk about women.”
Mastercard plans to ensure that half of the 50 million small and medium enterprises, or SMEs, it plans to bring into the financial system in the next five years are led by women.
Cairns is also Global co-Chair of the 30% Club – the high-profile initiative improving gender balance on boards and in senior management. She says she was driven to join by her 40+-year career in the corporate world, for much of which she was the only woman in the room.
“There are pros and cons to that,” she admits. “You stand out when you are younger, but it is a lonely life.”
“I also don’t think it’s a good way to run a business. There’s so much data out there that shows diverse management teams and boards outperform homogenous ones.”
She says that the 30% Club is seeing “tremendous results”, citing progress by Japan – traditionally a laggard on gender diversity – which joined two years ago and has seen women on boards increase from 7% to 12% since.
In the UK, where Cairns is based, she says she’s glad it has achieved its target of 33% of women on FTSE350 boards, with no all-male boards remaining. But she points to the next challenge – that just 21.5% of women have an executive role at FTSE350 companies.
Cairn says attention is turning to ethnicity, with growing awareness around the intersectionality between gender and ethnicity. Last March, the UK government-commissioned Parker Review into ethnic and cultural diversity on UK boards recommended companies seek one to have at least one non-white director after it found a dearth of minority faces.
“In Britain, the intersectionality of gender and ethnicity is really terrible in the corporate world. I mean, trying to make it as a black woman in Britain today is difficult – you are a percentage of a percentage, basically. So we want CEOs running FTSE companies to commit to having at least one person of colour on their boards and C-suites and that we would like half of those positions to go to women of colour.”
Cairns said that, while welcomed by CEOs, she got many calls from leaders worried about achieving the target.
“I said it’s totally achievable because you’re tracking at 42% today – you’re almost at a 50:50 target. Why wouldn’t you go for that?”
Mastercard has also published gender and ethnicity pay scorecards, which show that the gender pay gap at the firm is about 8% and the ethnicity pay gap for the US is around 7%.
“Any big company that goes out and publishes their results is immediately driven to improve them,” says Cairns. Mastercard has started linking the outcomes to executive pay, she explains. “So if they go up or down by 10%, it impacts what people get paid at the top of the company. It’s an amazing commitment. I think it’s quite world leading.”