My earliest ethical teachings were conventional. There was a childhood of regular Sunday services, and a very large extended family that cheated, I thought, at Monopoly. We had a family legacy of an American great-grandfather who, upon reading that two boys were arrested and fined in the north end of Boston for playing on the streets, was so outraged that he founded the American Playground Movement. The nineteen-fifties were a time when children like me joined the Girl Scouts and recited messages like, “I promise to do my duty to God and my country, to help other people at all times.” I fit right in.
I don’t know that today’s youth have the advantage of the taught idealism that we had. It certainly influenced me. My private high school always had a strong message of “doing what is right.” We had a social service club that you could get into if your grades were good enough and you didn’t have any behavioral demerits. I got in. This allowed me to spend Saturdays playing with the kids at the Belchertown Farm, a state run facility for what we then called the mentally retarded. It looked like a zoo, with people behind bars, picking their scabs and smiling shyly. The stench was beyond words. It was an honor to serve them. I decided to become a teacher.
And at first, I did go to teacher’s college, but soon dropped out. Though eventually I returned and with great reluctance and lack of distinction, I finished. I graduated without passion or skills and landed a job as a photo copy clerk at a stock brokerage firm. I rose through the ranks and became the secretary to the secretary of the Chief Executive Officer. Then, in a moment of complete naïveté I asked to be trained to be a broker and the boss said yes.
I didn’t know it then, but four women at Merrill Lynch had just sued that firm, charging discrimination against women. Without that brave lawsuit, I’d never have had a chance. Nor did I notice that I was the only female in the sales force. I just thought it would be more interesting than typing, and it was. The big boss had seen that I got to work early enough to have read the paper and drunk my coffee before he arrived at 8:50. So he figured I was a go getter.
And when I became a broker, I ran into clients whose memories and way of thinking were like my own. And they challenged me. They didn’t want to participate in war, in dirty extractive industries, in products that kill when used as intended. They wanted to find ways to invest in safe and useful goods; they wanted to fight racism through the way they invested. And I listened and learned and eventually I saw. This is right. This is my path. I invented something. I called it Ethical Investing, I told people let’s do three things:
First, let’s pick stocks that are ahead of the curve on the issues we care about, on the environment and human dignity. That way we will create market demand for an alternative accounting system to the one we use today. We’ll build a means of accounting for the true cost to people and the planet picked up in the name of corporate profits.
Second, let’s remember that owners of a share of a company have the right to go to the annual meeting and discuss non-routine items with the company’s management and the board. Let’s use that right to talk about racism, pollution, unsafe products and other things we care about.
Third, let’s funnel money into less traditional investment areas, areas that push-the-envelop in terms of financing good things. Let’s make deposits at community development credit unions, let’s make loans to finance micro-credit–loans of $30, $40 or $50 to an entrepreneur in an emerging economy. Let’s finance new greener technologies.
So I wrote the book, Ethical Investing; it came out in 1984. Now, 1986 was the year of the crescendo of divestment of American companies doing business in South Africa. Blacks couldn’t vote there and the world was outraged – one tactic was to humiliate the South African government by making them pariahs; companies using their slave labor were also pariahs. $600 billion worth of portfolios were purged of companies doing business there. And I had written the book and so was the expert, called upon to defend my argument, to defend the thought that the way you invest matters.
That left me a passionate advocate. I knew I had to remove barriers at the top and inspire grassroots at the bottom. When I found my voice 27 million people were living in virtual slavery in South Africa, and that was wrong. But today they vote. Back then, powdered infant formula was being sold to women who couldn’t access clean water to mix it with and who could have breast fed. Babies died. Today most manufacturers avoid the practice. Investors made the difference.
And the years passed…
Today my field is accepted. All the greatest research houses sell corporate social responsible information. 4,000 corporations have voluntarily published CSR reports globally, some admittedly more worthwhile than others, but all representing legitimacy.
I learned how to read an annual report, from my grandfather. One day we were talking as we weeded the garden. He scowled at me and said, “Amy D. It is time you learned a thing or two.” He dropped the gardening tools and marched me back to his home, where he pulled out a stack of annual reports and proxy statements. He told me that companies have owners. He said that companies had to report to their owners and that these were the reports. He said, “Here’s how you read an annual report, you start at that back. That’s where the auditor’s report is.”
I started out a shy and unremarkable girl in a rural dairy community. I had been afraid of my own shadow. But something shifted. I found myself undaunted. When I researched for ethics in investments and found no literature I was stunned. I wrote a book.
When I studied for my chartered financial analyst designation and was taught that limiting a universe limited return; it seemed nuts. I knew that every portfolio manger in the world promises to limit your universe so as to enhance your return. So I created an index for my kind of investors, and it has done better than the more conventional S&P 500.
When I found out that mutual funds wouldn’t tell how they voted other people’s money power at corporation’s annual meetings, it seemed weird. Whose money was it anyway. I wrote the Securities Exchange Commission, the boss of mutual funds in Washington, and told them to do something, eventually winning the battle against Fidelity and Vanguard, by making mutual fund votes at corporate annual meetings a matter of mandatory disclosure. These were outrageous but brave acts for the child I had been.
My grandfather never read my book – it upset him too much, the idea of mixing sloppy values with money making. He loved to hear of my work. He followed my fact finding trip to North Ireland, my efforts to move savings deposits into community development credit unions, my involvement with the interfaith community over bringing issues ranging from PCBs in the Hudson to gender equality in the boardroom into shareholder meetings with great interest.
But he could never understand that for me, when a tobacco executive lied about tobacco, and through those lies, killed people, he’d broken a commandment. For me, finance and capitalism are not exempt from right and wrong. Investors are not innocent in the actions of the teams they enable. How was I able to overcome his reluctance to acknowledge my work? I had permission, granted at a very young age, to seek out ethical behavior.
I sincerely appreciate this, the Praxis Award. The explicit messages we send are important. By creating and the Praxis Award Villanova allows professionals to connect their personal ethical integrity into their jobs. The effort it takes to ignore wiser words or criticism is enormous, I know. But every effort that is undertaken to bolster ethical behavior liberates another generation to find their way. I was brought up repeating, “I promise to do my duty to God and my country, to help other people at all times.” It was, in many ways, just a silly line. Still, it framed me. Explicit encouragements of strong ethical behavior matter. This award therefore has great meaning to me.
Thank you.