MANUAL

THE POWER OFPROCUREMENT: HOW TO
SOURCE FROM WOMENOWNED BUSINESSES
Corporate Guide to Gender-Responsive
Procurement© 2017 UN Women. All rights reserved.

Produced by UN Women’s Economic Empowerment Section for the Flagship
Programming Initiative “Women’s Entrepreneurship in Gender-Responsive
Procurement”, with the support of Citi and inputs from WEConnect International.
AUTHOR: Keric Chin
This guide was developed through a participatory process. Stakeholders fromgovernment, business and civil society discussed the scope and content during
workshops held in New York, Brazil and India. The process was led by Meg Jonesand Anna Gollub (UN Women Headquarters) with invaluable support and substantive comments from Nadine Gasman and Adriana Carvalho (UN Women
Brazil) and Rebecca Tavares and Subhalakshmi Nandi (UN Women’s Office for
India, Bhutan, Maldives and Sri Lanka). The guide was produced with the supportof Citi, with special thanks to Mary Ann Villanueva, Jeni Yaghoubi, I. Javette Hines
and Ann Musselman for their key involvement in organizing the workshops andproviding substantive comments on the guide. Elizabeth Vazquez (WEConnect
International) also provided substantive inputs to the guide and support during
the process.
The contents of this publication are the sole responsibility of the authors, do notnecessarily reflect the views of UN Women and WEConnect International, andcan in no way be taken to reflect the views of Citi.
ISBN: 978-1-63214-087-6
Design: blossoming.it
Copy Editor: Leigh Pasqual
Report Production Coordinator: Philip Tuson

MANUAL

THE POWER OF PROCUREMENT:HOW TO SOURCE FROMWOMEN-OWNED BUSINESSES
Corporate Guide to Gender-Responsive
Procurement

TABLE OF CONTENTSTABLE OF CONTENTS

III

LIST OF BOXESV

LIST OF ABBREVIATIONSVIEXECUTIVE SUMMARYIX

CHAPTER 1. WHY GENDER-RESPONSIVEPROCUREMENT MATTERS

19

I. SUSTAINABLE DEVELOPMENT GOALS20

CHAPTER 2. UNDERSTANDING AND FINDING
WOMEN-OWNED BUSINESS ENTERPRISES
39
I.CERTIFYING WOMEN-OWNED BUSINESSENTERPRISES

40

A. Defining “Women-Owned Business Enterprises”

40

1. Ownership41

2. Control

43

3. Independence

43

A. The Crucial Role of Gender Equality and Women’s
Empowerment

20

B. The Significance of Certifying

43

B. Stimulating Equal Opportunities for Women
Entrepreneurs

22

C. Leveraging Existing Certifications andCertification Mechanisms

44

II. CONNECTING WITH WOMEN-OWNEDBUSINESSES

46

CHAPTER 3. OVERCOMING THE
CHALLENGES FACING WOMEN-OWNEDBUSINESS ENTERPRISES

47

I. STRATEGIC SOURCING

49

II. BUSINESS CASE

24

A. Smart Economics

24

B. Reputation and Branding

28

C. Enhancing Supplier Availability

28

III. CURRENT STATE OFGENDER-RESPONSIVE PURCHASING

29

A. Increasing Access to Information and Social
Networks49

29

B. Streamlining the Application Process50

1. Access to Financial Capital

30

C. Streamlining the Contracting Process51

2. Access to Social Capital

33

D. Limiting Contract Sizes

51

3. Access to Human Capital

33

E. Establishing Appropriate Award Criteria

52

F. Providing Feedback

53

G. Paying Promptly

53

A. Barriers to Women’s Participation in the Formal
Economy4. Socio-cultural Challenges: Why Women-Owned
		 Businesses are Different
B. Current Level of Participation in Corporate
Procurement

34
35

II. SUPPLIER DEVELOPMENT

53

A. Establishing Outreach Programmes

corporate guide togender-responsive procurement

54

iii

E Goal 5: Establish Comprehensive Supplier
Development Process

76

57

F. Goal 6: Establish Tracking, Reportingand Goal-Setting Mechanisms

77

57

G. Goal 7: Establish a Continuous Improvement Plan

77

H. Goal 8: Establish a Second-Tier Programme

79

III. LEVERAGING SOCIAL INVESTMENTS

80

CONCLUSIONS

83

REFERENCES

85

B. Technical Assistance55

C. Financial Assistance

56

D. Business Mentoring
III. INFRASTRUCTURE DEVELOPMENT
CHAPTER 4. SECURING CORPORATECOMMITMENT THROUGH DATA

60

A. Defining Objectives

61

B. Collecting and Standardizing Data61

1. Population of Interest

61

2. Indicators

62

C. Data Sources and Collection Mechanisms

63

1. Existing (Secondary) Data Sources

64

2. Corporate Data-Collection

66

D. Capturing and Providing Access to Data ina Central Database66

E. Comparing and Analyzing Data across Countries,
Industries, and Companies

67

F. Communicating the Results of Data Analyses

67

CHAPTER 5. BUILDING CORPORATECAPACITY AND COMMITMENT

69

I. PROGRAMME MATURITY LEVELS

70

II. BEST PRACTICE GUIDELINES

71

A. Goal 1: Establish Corporate Policy and Top
Corporate Management Support

72

B. Goal 2: Develop a Corporate Supplier
Development Plan for Women-Owned Businesses

72

C. Goal 3: Establish Comprehensive Internaland External Communications

73

D. Goal 4: Identify Opportunities for Women-Owned
Businesses in Strategic Sourcing and Supply Chain
Management74

corporate guide togender-responsive procurementiv

LIST OF BOXES
Box 1. The Gender Gap in Entrepreneurial Activity

22

Box 2. IBM Commitment to Supplier Diversity and Inclusion25

Box 3. Branding and the “Women Owned” Logo28

Box 4. The New Kenyan Constitution and Land Rights

31

Box 5. Itaú Unibanco’s Women Entrepreneurship Programme32

Box 6. Coca-Cola’s 5by20 Initiative35

Box 7. Empowering Women through Public Procurement36

Box 8. Aerospace Firm Misrepresents Itself as Women-Owned

41

Box 9. Scaling Up: The Potential Impact of Restricted Stock Agreements

and Stock Options on Ownership Rights

42

Box 10. Connecting Corporate Buyers with Women Business Enterprises

in over 100 Countries45

Box 11. Whirlpool Latin America: Identifying “Bite-Size” Opportunities

for Micro-Businesses52

Box 12. Government of Karnataka in India

54

Box 13. Benetton Group’s Commitment to Support Women Starts

in Bangladesh and Pakistan

56

Box 14. Mahila E-haat Online Marketing Platform58

Box 15. Self-Employed Women’s Association (SEWA)

58

Box 16. Rede Mulher Empreendedora65

Box 17. Gender-responsive Procurement Must be an Essential

Component of the Business Strategy

72

Box 18. Communicating with Potential Suppliers74

Box 19. Citi – Innovative Ideas for Promoting Supplier Diversity

in the Supply Chain

75

Box 20. Best Practice in Supplier Development76

Box 21. Setting SMART Goals

77

Box 22. Benchmarking78

Box 23. Encouraging Participation at all Levels of the Supply Chain79

corporate guide togender-responsive procurementv

LIST OF ABBREVIATIONSB-BBEE

Broad-Based Black Economic Empowerment

CAMSC

Canadian Aboriginal and Minority Supplier Development Council

CWBR

Center for Women’s Business Research

CGI
EDGE

Clinton Global Initiative
Evidence and Data for Gender Equality Initiative

FAO

Food and Agricultural Organization of the United Nations

FIWE

Federation of Indian Women Entrepreneurs

GDP

Gross Domestic Product

GEM

Gender Entrepreneurship Monitor

ICT

Information and communications technology

IDB

Inter-American Development Bank

IDRC

International Development and Research Centre

IFC

The International Finance Corporation

ILO

International Labour Organization

MSD-China

Minority Supplier Development Council ChinaMSDUKMinority Supplier Development Council UK

NGLCC

National Gay and Lesbian Chamber of CommerceNMSDC

National Minority Supplier Development Council

NWBC

National Women’s Business Council

RME
SASDC

Rede Mulher Empreendedora
South Africa Supplier Development Council

SBA

U.S. Small Business Administration

SDGs

Sustainable Development Goals

SEWA

Self-Employed Women’s Association

SINE

French Information System on New Enterprises

SMEs

Small and Medium Enterprises

UNGA

United Nations General Assembly

USBLN

U.S. Business Leadership Network

USPAACC

U.S. Pan-Asian American Chamber of Commerce

WBENC

Women’s Business Enterprise National Council

WEF

World Economic Forum

WEPs

Women’s Empowerment Principles

WPEO

Women Presidents’ Educational Organization

WTO GPA

World Trade Organization Government Procurement Agreement

corporate guide togender-responsive procurementvi

EXECUTIVE SUMMARYEXECUTIVE SUMMARY
Corporations in certain developed economies, suchas the United States, have actively engaged womenowned businesses and other diverse suppliers aspart of their overall business strategies or corporatesocial responsibility for decades. As corporate supply
chains become increasingly more global, so too mustthese practices. This Guide provides corporations andtheir suppliers with a deeper understanding of thebarriers and challenges preventing women-owned
businesses from accessing and fully participating in
local and global value chains. It is intended to support
signatories of the Women’s Empowerment Principles,
which UN Women and UN Global Compact jointly
promulgate, to take action on Principle 5: Implement
enterprise development, supply chain and marketing
practices that empower women. The Guide provides
the tools and techniques for reducing or eliminatingthese barriers and challenges, and for leveraging thevast untapped economic potential represented by
women as suppliers. And, it outlines the essential
components of a comprehensive plan for genderresponsive procurement.
Corporations are well positioned to promote
gender equality and empower women in theirworkplaces, in their communities, and through theirpurchasing policies and practices. The sheer size andvolume of corporate purchasing worldwide meansthat corporations have the potential to dramatically
influence the way suppliers and supply chains operate.
Each year, corporations spend trillions of dollars
acquiring goods and services, yet purchases fromwomen-owned businesses account for a mere one
per cent of the total spend. By overlooking womenowned businesses, many corporations are missing an
opportunity to expand their global markets, diversify
their supply chains, and grow the economy, while
simultaneously improving the lives of women andgirls around the globe.

Gender equality and women’s
empowerment are indispensable toachieving the SDGs
In September 2015, the global community adopted
a set of seventeen Sustainable Development Goals(SDGs) in an effort to end poverty and hunger, protect
the planet, ensure prosperity for all people, and foster
peaceful, just and inclusive societies. The purposeof the seventeen goals and the many targets they
encompass is to guide the decisions and policies
of individual countries and those of the global
community more broadly over the next 15 years.
One of the primary objectives of the SDGs is to achieve
gender equality and empower women and girls. Thisobjective is embodied in SDG 5. While gender equality
and the empowerment of women are a stand-alone
goal, they are also indispensable to achieving the othersustainable development goals, such as eliminating
poverty and hunger and ensuring good health andeducation for all people.
The links between gender equality, women’s
empowerment and development are well recognized.
For example, the World Economic Forum reports that
there is a positive correlation between gender equality
and a country’s level of competitiveness, its Gross
Domestic Product (GDP) per capita, and its rank in the
Human Development Index. Likewise, the World Bank
(2012) reports, “When women’s labor is underused or
misallocated—because they face discrimination inmarkets or societal institutions that prevents themfrom completing their education, entering certain
occupations, and earning the same incomes as men—economic losses are the result.”
Indeed, corporations can play a pivotal role in achieving
the SDGs by empowering women through corporate
procurement.

corporate guide togender-responsive procurementxClosing the gender gap
For many women, entrepreneurship offers a path toeconomic empowerment and it is incumbent upon
the global community – including corporations – tohelp create the conditions that permit this. Today,
there is a gender gap in the level of entrepreneurial
activity across all regions due, in large part, to an
unequal playing field for men and women and otherbarriers to entry. Moreover, in both developed anddeveloping economies, women have yet to attainequality with men on such measures as educational
attainment, wages, political empowerment andeconomic participation.
Like most businesses, those owned and operated by
women are overwhelmingly micro- or small-sizedbusinesses. But unlike their male counterparts,
women business owners must contend with a uniqueand disparate set of challenges in addition to thosechallenges facing small businesses more broadly.
These challenges dissuade some women from starting
businesses and prevent others from growing theirs. In
other words, these challenges directly contribute to
the gender gap.
Promoting women’s entrepreneurship throughcorporate procurement is one way to close or atleast narrow the gender gap. At the same time,increased participation by women-owned businesses
in corporate supply chains will also yield tangible
benefits for corporations.

Empowering women is “smart economics”
Investing in women-owned businesses andintegrating them into corporate supply chains is“smart economics” and good for business. Today,
women-owned businesses contribute significantly
to the world economy, generating millions of new
employment opportunities and spurring local
development. But their full economic potential
remains largely untapped or underutilized. As of2013, for example, more than one third of all firms
worldwide had women owners, yet they receive amere one per cent of corporate procurement spend.
Corporations that overlook the role of women-owned
businesses in their supply chains are missing an

unparalleled commercial opportunity. The Boston
Consulting Group described the women’s market as“the most important commercial opportunity in our
lifetime.” Today, women control about $20 trillion in
annual consumer spending and, by 2028, will control
nearly 75 per cent of consumer discretionary spending
worldwide. By all accounts, companies that invest
in women-owned businesses and adopt inclusive
sourcing practices will be better positioned to accessthis commercial opportunity than those that do not.
A recent study by McKinsey confirms that, formany companies, gender-responsive procurement
practices have had a positive impact on profitability
and return on investment. Indeed, in 2014, one large
telecommunications company, AT&T, attributed $4
billion of increased revenue to the engagement of
women suppliers. By all accounts, when the playing
field is level, women-owned businesses can compete
successfully with businesses owned by men.
Research also shows that consumers are concerned
about corporate social responsibility and thistranslates into a “bottom-line benefit” for brands
that practice what they preach. Women, in particular,
are more likely to try a company’s products when
they know the company supports women-owned
businesses. They are also more likely to develop brandloyalty.
Likewise, inclusive procurement policies enhance acompany’s reputation among internal and external
stakeholders, including employees, business clients,
shareholders and the community.
Corporations that diversify their supplier basestand to benefit in other ways as well. Among otherthings, a diversified supplier base enhances supplieravailability and security; promotes innovation
through the entrance of new products, services andsolutions; drives competition; and increases market
penetration and access to new markets. Moreand more, corporations are also diversifying their
supply chains because they realize their suppliers
are likely to become their customers. Simply stated,
gender-responsive procurement is a win for both thecorporations and the women suppliers.

corporate guide togender-responsive procurementxiBarriers to women’s participation
Despite the many contributions women-owned
businesses have made to economic growth anddevelopment around the world, their full potential
has yet to be realized. There are many reasons for this.
Globally, women entrepreneurs face a wide range offinancial and non-financial barriers that prevent themfrom entering and/or fully participating in the formal
economy and corporate supply chains.
One of the major factors limiting the size and growthof women-owned businesses and preventing themfrom reaching their full potential is lack of financing.
Firms that start with higher levels of capital show
better performance in terms of assets, revenue,
profitability and survival. Women, however, typicallystart their businesses with less capital and have lessaccess to financing than men, which limits theirability to start and grow their businesses.
There are a variety of structural and socio-cultural
factors contributing to this global credit gap. They
include, but are not limited to, lack of access tocollateral, institutional bias, and socio-cultural norms.
Women business owners also have limited accessto social capital. In particular, women tend to havedifficulties establishing robust business networks andconnections with individuals and organizations that
can actually generate business. They tend to rely moreheavily on family connections and informal networks
for business. To be sure, women business owners
have overcome many historical barriers by building
professional networks of businesswomen. Many havenot, however, extended their networks beyond thisgroup of like-minded individuals. As a result, many
women miss out on potential business opportunities
that are needed to grow their businesses.
Likewise, women business owners tend to have
limited access to human capital. While women havemade tremendous gains over the past few decadeson the educational front, they still lag behind men
in terms of business and managerial experience.
Because of this, women often lack the business skills
and financial literacy necessary to operate and growtheir businesses in a profitable manner. Indeed, arecent study found two key differences between
male and female entrepreneurs that helped explain

the relatively lower revenue generated by womenowned businesses. The first was lack of managerial
experience. The second was the amount of time
women were able to devote to their businesses.
This latter finding underscores another major
challenge with which women business owners must
contend, namely, socio-cultural expectations andnorms. For example, in most countries, women beara disproportionate responsibility for housework andfamily care and, as a consequence, typically work
more hours than men. These expectations do notchange even when a woman enters the workforce orstarts a business, thus impacting the amount of time
women can allocate to their businesses. This is one of
the major reasons women-owned businesses do not
grow as large as those owned by men.
Another is that women are less confident than men
about whether they have the knowledge, skills andexperience required to start and run a new business.
When they do start a business therefore, they tend
to have lower expectations for it. While there are anumber of reasons for these attitudes, the net result
is lower growth and revenue.
The bottom line is that female and male businessowners are not similarly situated. Women must
contend with additional obstacles above and beyond
those encountered by men. Understanding this isfundamental to developing an effective genderresponsive procurement programme.

Understanding the women’s market andfinding women-owned businesses
To effectively increase the number of women-owned
business enterprises participating in corporate supply
chains, corporations must first identify which of their
suppliers are women-owned businesses, establish
their baseline and sourcing goals, and then develop
a network of existing and new suppliers that areboth owned and controlled by women and capable ofproviding goods and services in the quantities and of
the quality required. To grow the baseline, an in-depth
understanding of the potential supplier base andmarket opportunities is important.
The process of understanding and finding womenowned businesses begins simply enough by defining

corporate guide togender-responsive procurementxii

what it means to be a “women-owned business”. Thisdefinition is foundational to understanding market
capabilities, establishing baselines against which tomeasure progress, targeting technical and financial
assistance, and determining which businesses are
eligible for preferential procurement programmes.
Among other things, a carefully constructed
definition and eligibility criteria are importantbecause they reduce the likelihood of tokenism andfraud, both of which undermine the goals of inclusiveand diverse sourcing. Within the current context,
tokenism occurs when companies place women in
key management positions, but do not grant them
duties, responsibilities and authority commensuratewith those positions. It creates the façade of diversity,
but does little, if anything, to empower women. When
this is done solely to gain preferential status as a
women-owned business, these practices can amountto criminal or civil fraud.
To avoid this, the definition and eligibility criteria for
women-owned businesses should at a minimum
include the following elements: (1) at least 51 per centunconditional ownership by one or more women; (2)unconditional control by one or more women overboth the long-term decision-making and the day-today management and administration of the business
operations; and (3) independence from non-womenowned businesses. This definition of women-owned
business, whatever form it takes, will serve as the basis
for certifying the status of firms as women-owned.
Significance of certifying
An effective certification process is important toboth corporations and women-owned businesses.
Certification provides corporations with an easy andeffective way to assess whether a business purporting
to be women-owned is in fact women-owned. For
women-owned businesses, certification maximizes
their market opportunities with corporations, public
sector agencies, and other certified women-owned
businesses. Certification also benefits sociallyconscious consumers, who are looking for products
and services from companies that align with theirvalues.

Several options exist for certification: self-certification,
third-party certification, government certification, or
certification using in-house resources. Of these, thirdparty certifications appear to be the most promising.
They offer an effective and, in many respects, asuperior alternative to either self-certification or certifications using in-house resources. Organizations
created by corporate buyers, such as the Women’s
Business Enterprise National Council (WBENC) in the
U.S. and WEConnect International outside of the U.S.
have been certifying businesses owned, controlled
and operated by women for years. As a consequence,
they offer support to corporations and women-owned
businesses and have in place the experience, expertiseand procedures necessary to vet and certify women’sbusiness enterprises. Perhaps more importantly, they
have compiled searchable databases of certified
women’s business enterprises that corporations canand do leverage to develop more diverse and inclusive
local and global value chains.
Connecting with Women-Owned Businesses
Finding women-owned businesses, particularly in newmarkets, can be challenging. Because of this, many
corporations rely on established business associations
and networks that focus on connecting diverse suppliers with corporate buyers. WBENC in the U.S. and
WEConnect International outside of the U.S. offer themost comprehensive databases of certified and selfregistered women’s business enterprises in the world.
Inclusive sourcing is not limited to sourcing fromwomen-owned businesses. There are other importantorganizations that provide supplier education andcertification services for other underutilized groups
such as:••Canadian Aboriginal and Minority Supplier
Development Council (CAMSC)••Minority Supplier Development Council China(MSD-China)••Minority Supplier Development Council UK(MSDUK)••National Gay and Lesbian Chamber of Commerce(NGLCC)••South Africa Supplier Development Council (SASDC)

corporate guide togender-responsive procurementxiii••Supply Nation in Australia••U.S. Business Leadership Network (USBLN)••U.S. Pan-Asian American Chamber of Commerce(USPAACC)••U.S. Small Business Administration (SBA)
While these certification organizations do not certify
businesses based on the gender of the businessowners, they do all serve businesses that are owned
by women.

Overcoming the challenges facing
women-owned business enterprises
As part of a comprehensive strategy for genderresponsive
procurement,
corporations
must
understand and address the many challenges andbarriers that prevent women-owned businesses fromaccessing and fully participating in the corporate
supply chain. These challenges and barriers exist on
both the demand and the supply side.
Strategic sourcing
Over the past few decades, corporations havedeveloped complex, fully integrated global supply
chain structures that are difficult for women-owned
and other small businesses to penetrate. During
this time, not only have corporations grown larger
and more global, especially through mergers andacquisitions, but as part of this consolidation process,they have taken advantage of their global scale bycombining and standardizing operations to increase
efficiency, while buying goods and services globallyand in greater bulk. Corporations have simultaneously
reduced the number of suppliers they use to a selectfew who have proven track records and can provide
goods and services in large quantities and at lower
prices. These changes have disadvantaged womenowned businesses seeking access to corporate supply
chains.
The challenge for corporations is to rethink today’s
supply chain model so that more women-owned andother small and underutilized businesses can accessit. Reforming corporate procurement policies andpractices is a good place to start.
At the outset, it is important to note that there wasuniversal consensus among the corporations andwomen-owned businesses, which were consulted
during the preparation of this Guide, that corporations
should not lower their standards to accommodate
women-owned businesses. Rather, the emphasisshould be on removing barriers and developing thecapacity of these suppliers to compete with otherbusinesses.
Increasing access to information and social networks.
For small businesses, especially those owned andoperated by women, the lack of information about
corporations is a major impediment to becoming a
supplier. Small businesses report that developing a
relationship with potential corporate customers is
critical to accessing the supply chain. It helps themunderstand the customer’s needs and provides themwith an opportunity to pitch their goods and services.
Unfortunately, corporate procurement processes
are often opaque. Many small business owners do
not know where to start or whom to contact. This isparticularly challenging for women business owners
whose formal business networks are less developed.
Bridging this information gap is crucial to diversifying
the supplier base. Corporations have attempted to do
this by, for example, hosting and/or participating in
supplier conferences, publishing their procurement
policies and procedures, and establishing supplierpages on their websites.
Streamlining the application process.
To become a corporate supplier, small businesses
must first contend with a burdensome application
process. This typically involves completing alengthy questionnaire and submitting reams of
documentation on their companies. For corporations,this information is essential because it allows themto evaluate product quality as well as the capabilities
and reliability of the suppliers themselves. For small
businesses, however, this process is time-consuming
and daunting.
Small businesses have limited time and resources,
which means that whatever is spent filling out
applications is that which cannot be spent elsewhere.
This is particularly true for women-owned businesses,
which tend to be smaller than businesses owned bymen, have less business experience, and are time poor
due to competing family and childcare responsibilities.

corporate guide togender-responsive procurement

xivBecause of this, the more corporations can streamline,
standardize and consolidate the application process,the more likely it will be that qualified women-owned
businesses will apply.
Streamlining the contracting process.
For the same reasons, it is important that corporations
streamline and standardize their contracting processes.
For many women-owned businesses, the corporate
contracting process can be just as daunting as theapplication process, if not more so. Standardization, inparticular, has the potential to lower the transaction
costs of contracting, thereby increasing the likelihoodthat women-owned businesses will participate.
Limiting contract sizes.
As corporations have grown larger and vastly moreglobal, they have reduced the number of suppliers
they use to a select few who can provide goods andservices in large quantities and at lower prices. Thishas placed women-owned businesses at a distinct
disadvantage. The practice of bundling multiple
requirements into one large contract can effectively
preclude many women-owned businesses fromcompeting for the work because they do not havethe necessary scope or depth to compete. Wheneverpractical, corporations should look for opportunities
to unbundle requirements or otherwise limit the sizeof their contracts, particularly at the local level.
Establishing appropriate award criteria.
In general, women-owned and other small businesses
cannot successfully compete against large businesses
when price is the predominant selection criteria. Byemphasizing price rather than “value for money”,
the procuring entities not only ignore the life-cycle
costs associated with the purchases, but also forego
the many innovative solutions offered by small firms.
Accordingly, research suggests that procuring entities
wishing to level the playing field for small businesses,
including most notably those owned by women,should consider awarding contracts to those firms
whose offers represent the best overall value to the
procuring entities, rather than simply the lowest price.
Providing feedback.
The importance of providing feedback to unsuccessful
bidders after a competitive procurement cannot be
overstated. Post-award feedback provides supplierswith invaluable information about the strengths
and weaknesses of their tenders so that they are
better able to compete for contract opportunities in
the future. In short, feedback is an important tool for
supplier development.
Paying promptly.
Delayed payments can have a devastating effecton women-owned small businesses. Because theirfinancial resources are quite limited in the first place,
women-owned businesses are less able than larger
firms to absorb the impact of delayed payments.
Delayed payments reduce the working capital available
to women-owned businesses and negatively affectproduction capacity and profitability. To alleviate thefinancial distress caused by delayed payments, it isincumbent upon corporations to establish efficientand effective systems for processing invoices andremitting payments to these businesses, and to insist
that first-tier and lower-tier suppliers do the same.
Supplier development
By identifying and eliminating structural impediments on the buy side, corporations make it possible
for more women-owned businesses to access the
supply chain. But this does not necessarily mean theywill. To be successful, gender-responsive procurement
programmes must do more than simply open the
doors to women-owned businesses. They must also
develop the capacity of women-owned businesses tocompete and succeed as suppliers.
Supplier development encompasses a broad range ofactivities designed to improve the performance andexpand the capabilities of suppliers for the benefitof the buying corporation. They include, among otherthings, outreach programmes, technical assistance,
financial assistance, and business mentorship.
For women business owners, supplier development
is especially important. This is because they tend tohave less access to finance, human, and social capitalthan their male counterparts. As mentioned earlier,they must also contend with socio-cultural expectations and norms, which negatively impact their ability
to start and grow their businesses.

corporate guide togender-responsive procurementxv

Infrastructure development
In many regions of the world, the effectiveness ofthe supplier development and sourcing reforms
mentioned above may be limited by the lack of infrastructure. In India, for example, women entrepreneurs
often lack access to basic equipment and floor space
where they can manufacture their products, or themeans and know-how to market those products. To
overcome these constraints, women in many partsof the world have formed cooperatives. This is particularly true for women working in the informal andagricultural sectors.
Research also suggests a gender divide in digitaltechnology exists in both developed and developing
countries, which contributes to reduced businessperformance. This divide is most pronounced in lowand middle-income countries.

Securing corporate commitment throughdata••What is the current level of participation of womenowned businesses as suppliers in their corporate
value chain?
••What are the capabilities and capacity of womenowned businesses to participate in their corporate
value chain?
••How will the corporation benefit from increased
participation by women-owned businesses in theirvalue chain?
••What barriers are preventing women-owned
businesses from fully participating in their corporate
value chain?
••What can be done to eliminate the barriers
preventing women-owned businesses from fully
participating in their corporate value chain?
••What goals should be set to increase the level ofparticipation of women-owned businesses as
suppliers in their corporate value chain over time?

Collecting and analyzing data on women-owned
businesses can be challenging, but these challenges
are not insurmountable. To be sure, researchers who
study women entrepreneurs often lament the dearthof reliable gender-disaggregated data. There are,however, a variety of primary and secondary data
sources upon which corporations can draw.

To answer these questions, corporations can draw
upon a variety of existing (or secondary) data sources,
such as labor force surveys, surveys of small businessowners, surveys of entrepreneurial activity, firmlevel surveys and business registers. It is importantto recognize however, that while these sources canyield relevant information on gender differences inentrepreneurship and business performance, there
are notable limits to the quality, availability and utilityof this data. The data may not meet the immediateneeds of corporations seeking to understand andleverage women-owned businesses in their value
chains. For example, firm-level business surveys lacka common international design framework making
meaningful comparisons of datasets more difficult.
Likewise, many of the population-based surveys
contain few, if any, gender indicators. This is not to saythese data sources should be ignored, but simply that
corporations need to be aware of their limits.

Before data-collection begins, corporations mustclearly define their research objectives. Corporations
seeking to better understand the capabilities andavailability of women suppliers in their respective
industries and how to increase their participation in
the corporate value chain might focus their efforts on
answering the following questions:

Corporations, of course, are not limited to gathering
secondary research. Both individually and collectively,
they are well positioned to collect information on
business ownership and performance throughtheir supplier databases. Moreover, businessassociations and organizations, such as WBENC in
the U.S. and WEConnect International outside ofSupport from corporate management is essential
to the success of gender-responsive procurement
strategies. To secure this support, the proponents ofthese inclusive sourcing programmes must develop
and communicate a compelling business caseand strategy for them. This requires an in-depth
understanding of the capabilities and capacities ofwomen-owned businesses to supply the corporation’s
requirements and how the corporation might be able
to unlock and leverage those capabilities.

corporate guide togender-responsive procurement

xvithe U.S., are invaluable sources of information on
women-owned businesses. These organizations also
have well-established networks of women-owned
businesses within their national or regional markets
and are able to connect corporations directly withwomen suppliers.
The ultimate goal of these data-collection and analysis
efforts is to secure top-level commitment, by providing
corporate management and other stakeholders with
the information on the feasibility and benefits of agender-responsive procurement programme.

Establishing comprehensive programmeplans

improvement plan; and (8) establish a Second-Tier
programme.

Measuring progress
As with any programme, monitoring and evaluation
are necessary to measure progress toward organizational objectives and to make adjustments where
necessary to improve the system. This begins withsetting goals for the programme. Corporate strategies
should contain SMART – Specific, Measurable,
Actionable, Realistic, and Time-bound – goals toincrease the likelihood of sustained success and usage
throughout the organization.

Removing the barriers that prevent women businessowners from breaking into the corporate supply chain
is an essential part of an effective gender-responsive
procurement strategy, but does not alone guarantee
results or a positive return on investment. To succeed,
corporations must also establish comprehensive
plans for developing, implementing and tracking
gender-responsive procurement programmes. The
end game is to reach a stage where gender-responsive
procurement has become an integral part of thecorporate culture and practice.

One of the primary objectives of goal-setting andmeasurement is to demonstrate return on investment.
Corporations have traditionally measured the successof their supplier diversity and inclusion efforts interms of corporate spend, either absolute dollars or
as a percentage of total procurement spend. In addition to these traditional metrics, corporations should
also consider measuring non-traditional metrics thatshow how diversifying the supplier base benefits thecompany in other ways, including, for example, enhanced customer loyalty and cost reductions throughincreased competition.

While there is no one-size-fits-all plan forgender-responsive procurement, the National
Minority Supplier Development Council (NMSDC)
has developed a list of best practices to guidecorporations in the development and assessment of
supplier diversity and inclusion programmes, which
are equally applicable here: (1) establish a corporate
policy; (2) develop a supplier development plan for
women-owned businesses; (3) establish comprehensive internal and external communications; (4)identify opportunities for women-owned businesses
in strategic sourcing and supply chain management;(5) establish a comprehensive supplier development
process; (6) establish tracking, reporting and goalsetting mechanisms; (7) establish a continuous

Increasingly,
organizationsareturningtoself-assessments and other benchmarking tools togauge the effectiveness of their business practices
and programmes—and indeed those of their
suppliers—against industry leaders and best practices.
In South America, for example, Itaipu Binacional has
developed a benchmarking tool for evaluating thedegree to which its suppliers and other companies
demonstrate best practices under the Women’s
Empowerment Principles (WEPs). This includes
Principle 5, which focuses on business development,
supply chain practices, and marketing that empowers
women. By all accounts, benchmarking is a promising
tool for measuring, tracking and evaluating genderresponsive procurement programmes.

corporate guide togender-responsive procurement

xvii

1

WHY GENDERRESPONSIVEPROCUREMENT
MATTERS1. WHY GENDERRESPONSIVEPROCUREMENT MATTERS
Corporations are well positioned to promote gender equality and empower women in theirworkplaces, in their communities, and through their purchasing policies and practices. The
purpose of this Guide is to provide corporations with a better understanding of the barriers andchallenges preventing women-owned businesses from accessing and fully participating in thecorporate supply chain. It also provides tools and techniques for overcoming these barriers andleveraging the vast untapped economic potential represented by women-owned businesses.
The sheer size and volume of corporate purchasing worldwide means that corporations have the potential to dramatically change the way suppliers and supply chains operate. To put this in perspective, about 63 percent of the
top 175 global economic entities are corporations and not countries based on annual revenue or Gross Domestic
Product, as the case may be (White, 2012). Each year, corporations spend trillions of dollars acquiring goods andservices, yet purchases from women-owned businesses account for a mere 1 percent of the total spend (Vazquez& Sherman, 2013, p. 43). By overlooking women-owned businesses, corporations are missing an opportunity to
expand their markets, diversify their supply chains, and grow the economy, while simultaneously improving the
lives of women and girls around the globe. A growing body of research demonstrates that the promotion ofgender equality and empowerment of women is critical to economic growth and achieving many of the United
Nations Sustainable Development Goals. It is also the socially responsible thing to do.

I. Sustainable Development Goals
A. The Crucial Role of Gender Equality and
Women’s Empowerment
In September 2015, the global community adopted
a set of seventeen Sustainable Development Goals(SDGs) in an effort to end poverty and hunger, protect

1

the planet, ensure prosperity for all people, and foster
peaceful, just and inclusive societies. The purposeof the seventeen goals and the many targets they
encompass is to guide the decisions and policies of individual countries and those of the global community
more broadly over the next 15 years.

Based on total spending by Fortune 1000 companies..

corporate guide togender-responsive procurement

20

In formulating the SDGs, the global community
collectively acknowledged that women often
encounter additional obstacles above and beyond
those encountered by their male counterparts
because of social, economic, cultural, and/or legal
discrimination against women, both explicit
and implicit. Even in countries where formal
discrimination—andmostnotablylegal
discrimination—has been largely eliminated,
women must still contend with the legacy of suchdiscrimination. Indeed, in both developed anddeveloping economies: “Women have yet to attainequality with men on such measures as educational
attainment, wages, political empowerment andeconomic participation.” (Ernst & Young, 2009,p.6) Women also lag slightly behind men in healthoutcomes (World Economic Forum, 2015).
The gender gap is most pronounced in the areas of
economic participation and political empowerment,
as evidenced by the Global Gender Gap Index. Each
year, the World Economic Forum (WEF) produces theIndex, which measures the relative gap between men
and women across four key areas or sub-indices—
health, education, economy and politics—and tracks
their progress over time. It is designed to measure
relative gaps between men and women in accessto resources and opportunities in a country, rather
than the actual levels of resources available to them.
In other words, a country’s ranking in the Index is
not tied to its level of development or the amountof resources available in a country; rather, the Index
measures the relative access men and women have tothose resources, whatever they may be.
In 2015, the WEF found that only 59 per cent of theeconomic outcomes gap and only 23 per cent of thepolitical outcomes gap had been closed across the
145 countries included in the Report (World Economic
Forum, 2015). Ideally, 100 per cent of these gaps would
be closed, placing men and women and boys and girls
on a level playing field. While many countries havemade progress towards closing these gaps, no country
in the world has fully closed the gap between men
and women.
One of the primary objectives of the SDGs is to achieve
gender equality and empower women and girls. Thisobjective is embodied in SDG 5, although there are

specific targets related to women and girls in 12 of
the 17 goals. As a testament to its central importance,
SDG 5 was singled out by the United Nations General
Assembly when it adopted the SDGs. The preamble to
the Resolution reads, in pertinent part, as follows:
The 17 Sustainable Development Goals and
169 targets, which we are announcing today,
demonstrate the scale and ambition of this new
universal Agenda. They seek to build on theMillennium Development Goals and complete
what they did not achieve. They seek to realize thehuman rights of all and to achieve gender equality
and the empowerment of all women and girls.
They are integrated and indivisible and balance thethree dimensions of sustainable development: theeconomic, social and environmental (UNGA, 2015,
preamble).
While gender equality and the empowermentof women are a stand-alone goal, they are also
indispensable to achieving the other sustainable
development goals, such as eliminating poverty andhunger and ensuring good health and education for
all people. The crucial importance of SDG 5 is explicitly
highlighted in the Resolution:
Realizing gender equality and the empowermentof women and girls will make a crucial contribution
to progress across all the Goals and targets. The
achievement of full human potential and ofsustainable development is not possible if one halfof humanity continues to be denied its full humanrights and opportunities. Women and girls must
enjoy equal access to quality education, economic
resources and political participation as well as equal
opportunities with men and boys for employment,
leadership and decision-making at all levels (UNGA,
2015, para. 17).
The links between gender equality, women’s
empowerment and development are well recognized.
According to the WEF’s Gender Gap Report, there is apositive correlation between gender equality and acountry’s level of competitiveness, its Gross Domestic
Product (GDP) per capita, and its rank in the Human
Development Index (World Economic Forum, 2013).
The Report further observes: “While correlation
does not prove causality, it is consistent with thecorporate guide togender-responsive procurement

21

theory and mounting evidence that empowering
women means a more efficient use of a nation’s
human capital endowment and that reducing genderinequality enhances productivity and economic
growth.” (Ibid., p. 31).
Similarly, the World Bank’s World Development Report
2012 notes that elimination of barriers preventing
women from entering certain sectors or occupations
would increase output per worker by 13 to 25 percent. The Report also warns: “When women’s labor
is underused or misallocated—because they facediscrimination in markets or societal institutions
that prevents them from completing their education,entering certain occupations, and earning the same
incomes as men—economic losses are the result.”
Research also shows that business-owning women are
more likely than business-owning men to contributeto family education, and invest in their communities
using profits from their businesses (Kelly, et al., 2015,
p. 11). Indeed, women tend to invest a majority of
their income in their families’ education, health andnutrition, whereas men tend to spend a majority of
their income on consumable goods (Vanderbrug,2013).
In the words of the High-Level Panel of Eminent
Persons on the Post-2015 Development Agenda, “themessage is simple”:
Women who are safe, healthy, educated and fully
empowered to realize their potential transformtheir families, their communities, their economies
and their societies. We must create the conditions
so they can do so (United Nations, 2013, p. 31).

B. Stimulating Equal Opportunities for
Women Entrepreneurs
For many women, entrepreneurship offers a path toeconomic empowerment and it is incumbent upon
the global community to help create the conditions
that permit this. Today, there is a gender gap in thelevel of entrepreneurial activity across all regions due,in large part, to an unequal playing field for men andwomen and other barriers to entry. For every ten new
businesses being started or run by men, women havestarted or are running less than seven. The gender gap
is even more pronounced for established businesses(Kelly, et al., 2015, p. 16). (See Box 1).
The promotion of women’s entrepreneurship not
only supports SDG 5, “Gender Equality and Women’s
Empowerment”, it also supports SDG 8, “Economic
Growth”. In particular, Target 8.3 of the SDGs calls
for the global community to “promote developmentoriented policies that support productive activities,
decent job creation, entrepreneurship, creativity andinnovation, and encourage the formalization andgrowth of micro-, small- and medium-sized enterprises, including through access to financial services.”
Most businesses owned and operated by women are
overwhelmingly micro- or small-sized businesses.
But unlike their male counterparts, women businessowners must contend with a unique and disparate setof challenges in addition to those challenges facing
small businesses more broadly. As discussed more
fully below, promoting women’s entrepreneurship
through corporate procurement will yield tangible
benefits for both the corporations and the womenowned businesses while driving the economy andsustainable development.

BOX 1

The Gender Gap in Entrepreneurial Activity
According to The Global Entrepreneurship Monitor(GEM) Special Report: Women’s Entrepreneurship2015, a gender gap exists for both early-stage andestablished businesses across the three different
types of economic classifications used in thereport (Kelly, et al., 2015). GEM classifies economies
as factor-driven, efficiency-driven or innovationdriven based on the level of GDP per capita and theshare of exports of primary goods to total exports(Kelly, et al., 2015, pp. 12-13):

corporate guide togender-responsive procurement

22••Factor-driven economies are countries in earlystages of economic development, typically witha large agricultural sector. They include, forexample, India, Botswana and Bolivia.

businesses. In Africa, for example, the ratio of
female-to-male early-stage entrepreneurship is0.96, while in Asia and Oceania, the ratio among
factor- and efficiency-driven economies is 0.93.

••Efficiency-driven economies are countries witha developing industrial sector in which higher
productivity is achieved through economies ofscale and development of financial institutions.
They include, for example, Brazil, Russia, China
and South Africa.

By contrast, the levels of early-stage
entrepreneurship and established business activity
for women are much lower in innovation-driven
economies. So too is the ratio of female-to-malebusinesses.

••Innovation-driven economies are countries
with mature economies, characterized by an
expanding service sector and a sophisticatedindustrial sector. The United States, Japan, andthe countries of Western Europe fall into thiscategory.
Globally, the level of entrepreneurial activity
among women on average is lower than it isamong men, resulting in a significant gender gap.
For every ten new businesses being started or run
by men, women are starting or running less thanseven. The gender disparity becomes even starker
for established businesses. It is important to notethat the impact of barriers, such as limited accessto capital, competing child care demands and lackof financial literacy, differs by region and level of
economic development (Kelly, et al., 2015).
The level of early-stage entrepreneurship andestablished business activity is highest for womenin factor-driven economies, where GDP per capita
is low. This is likely due to higher levels of unemployment in those economies, where establishedcompanies and the formal economy are unable
to meet the demand for jobs (Kelly, et al., 2015).
Because of this, women are forced to start theirown businesses to earn a living for themselves andtheir families. In other words, for many women,
starting a business is not a choice, but a necessity.
The same holds true for efficiency-driven economies, although not to the same degree.
Factor- and efficiency-driven economies also
have the highest gender parity when it comesto early-stage entrepreneurship and established

These findings beg the question: why does thelevel of entrepreneurial activity among women
decrease as economic development increases?
While the answer is not entirely clear, there areseveral potential factors affecting the rates ofentrepreneurial activity among women in different
economies.
In developing economies, women often startbusinesses out of necessity and in those sectors
where capital requirements and other barriers toentry are very low, such as the consumer-related
sector. However, these sectors have low growthpotential and are also highly competitive due tothe low entry barriers, making it more difficult
for women to sustain their businesses. This
helps explain why women-owned businesses—
particularly
necessity-based
businesses—inless-developed economies tend to have higher
rates of closure than those owned by men. Kelly et
al. explained:
Necessity-based businesses are generally highly
liquid, requiring low amounts of capital to startand being relatively easy to close. In regions
characterized by high poverty and chronic
underemployment, it is not unusual to find aself-employed person supporting a large family
and enabling those around her/him to have abetter life. The liquidity of the business supportsthat pathway. This could be a positive factor to
the extent that women can easily get started or
shift to better opportunities, but problematic tothe extent that women are constrained in these
efforts.(2015, p. 22)

corporate guide togender-responsive procurement

23Not surprisingly, these women-owned businesses
also tend to be smaller than those owned bymen. Kelley et al. reports that countries in Africa
and the factor- and efficiency-driven economies
of Asia have the highest percentage of singleowner female entrepreneurs, as well as the highest
gender disparity with respect to this dimension.
While women in developing economies often
face challenges sustaining and growing theirbusinesses, women in developed economies facea slightly different set of challenges, namely,
overcoming the barriers to entry and scaling up
their businesses. In innovation-driven economies,
the rate of female entrepreneurial activity is
generally lower than in less-developed economies.
Innovation-driven economies also show lower
gender parity. In North America, for example, theratio of female-to-male startups is 0.69 and in theinnovation-driven economies of Europe and Asia, it
is only 0.55 and 0.54, respectively. (Kelly, et al., 2015,
p. 17-18)
Gender-responsive procurement also aligns with oneof the seven drivers identified by the UN High-Level
Panel on Women’s Economic Empowerment. The UN
Secretary-General established the Panel in January
2016 as part of his efforts to ensure the 2030 Agenda
on Sustainable Development has a real, demonstrable
impact on the lives of women, and builds stronger,
more inclusive economies. In September 2016, the Panelpublished its findings about proven and promising actions to address gender gaps and promote women’s
economic empowerment. To that end, the Panel
identified seven primary drivers of transformation,
including most notably, improving public sector
practices in procurement and employment (United
Nations, 2016). Improving corporate practices inprocurement is a natural corollary to this.

II. Business Case
A. Smart Economics
For corporations, investing in women-owned businesses and integrating them into corporate supply
chains is simply “smart economics.” Today, womenowned businesses contribute significantly to theMoreover, like their female counterparts in lessdeveloped economies, the research also suggeststhat women face greater difficulty than men ingrowing their businesses (Ernst & Young, 2009). For
example, in the United States, research conductedby the Center for Women’s Business Research(CWBR, October 2009) shows that 28.2 per cent of
all businesses in the United States are owned by
women, yet they account for only 4.2 per cent of allrevenue generated in the United States.
Kelley et al. observed that there is less demand for
entrepreneurship in innovation-driven economies,in part, because job opportunities with existing
companies and organizations offer a viable alternative to self-employment. However, this does
not explain the significant disparity between therate of female and male entrepreneurship in thoseeconomies, suggesting that other factors are atplay.

world economy, but their full economic potential
remains largely untapped or underutilized. In 2013 forexample, over 200 million women started or operated
businesses in 67 countries, and more than a third of
the firms worldwide had women owners (Vanderbrug,2013). These businesses—which primarily operate in
the consumer sector—have contributed to the grossdomestic product of their respective countries, generating millions of new employment opportunities andspurring local development.
In East Asia, the World Bank estimates that womenown 35 per cent of all small and medium enterprises(SMEs), while in Kenya, they own 48 per cent of all
micro, small, and medium enterprises—producing
around 20 per cent of GDP (World Bank, 2012). The
International Finance Corporation (IFC) estimatesthat women own about 8 to 10 million formal SMEs
in emerging markets, which represents about 31 to38 per cent of all formal SMEs in those markets (IFC,2011).
The impact of women-owned businesses is not justconfined to developing economies. In the UnitedStates, women are now the majority owners of 38

corporate guide togender-responsive procurement

24per cent of businesses and employ 8 per cent of theprivate sector workforce (American Express, 2016).
The Center for Women’s Business Research (CWBR)
quantified the economic impact of women-owned
businesses at $3 trillion annually. This translates into
the creation and/or maintenance of more than 23 million jobs, which is 16 per cent of the jobs in the UnitedStates (CWBR, 2009).

Council, 2015). AT&T, in particular, attributed about$4 billion of revenue to the engagement of women
suppliers in 2014. Along the same lines, a study commissioned by Cargill, Inc. found that companies witha higher adoption rate of supplier diversity and inclusion programmes generate one-third greater returnon the cost of procurement operations than average(EY, 2015).

More broadly, small businesses have long been recognized as a critical component of the U.S. economy.
According to the U.S. Small Business Administration’s(SBA) Office of Advocacy, small businesses—thosewith fewer than 500 employees—employ about half
the nation’s private sector work force; create most of
the net new jobs; produce a significant share of innovations; and generate half of the nonfarm, private
real GDP in the United States (U.S. Small Business
Administration, 2010).

A study by the Hackett Group concluded that “worldclass procurement organizations that focus heavily
on supplier diversity don’t sacrifice procurement savings by doing so. These leading companies haveslightly higher adoption rates of supplier diversity
programmes as typical companies, and they generate
133% greater return on the cost of procurement than
average performers.” (Hackett Group, Aug. 17, 2006).
Moreover, the Wall Street Journal, reporting on thesame study, states that “such companies spend on average 20 per cent less on their buying operations andhave procurement staffs half the size of their peers
whose supplier programmes aren’t as diverse.” (Jones,
Aug. 21, 2006)

From a purely “bottom line” perspective, female
consumers represent an unparalleled commercial opportunity. The Boston Consulting Group described thewomen’s market as “the most important commercial
opportunity in our lifetime” (Silverstein & Sayre, 2009).
The statistics bear this out. Globally, women control
about $20 trillion in annual consumer spending andthis number is expected to rise to nearly $28 trillion in
the next five years (GEM, 2015, p. 10). By 2028, women
will control nearly 75 per cent of consumer discretionary spending worldwide (Ernst & Young, 2009).
A recent survey conducted by McKinsey found thatapproximately 34 per cent of companies who had
diversified their supplier base by engaging withwomen-owned businesses reported a positive impact
on their profitability (National Women’s BusinessFor corporations, the message is clear: those that invest in women-owned businesses and adopt inclusive
sourcing practices will be better positioned to accessthis commercial opportunity than those firms that
do not. More and more, corporations are diversifying
their supply chains because they realize that their
suppliers are likely to become their customers (Foggin,2010). In other words, the women who are supplying
a corporation today are likely to become its customers in the future. Moreover, women suppliers have aunique understanding of the women’s market andexperience selling to other women, which can benefit
corporations in the near term.

BOX 2

IBM Commitment to Supplier Diversity and Inclusion
IBM recognizes that a diverse supplier base is
integral to company profitability and strategic
objectives—solidifying the connection between
customer satisfaction and winning in the marketplace. IBM’s global supplier diversity and inclusion
programme expands purchasing opportunities
for businesses owned and operated by minorities,
women, LGBT, veterans and service-disabled

veterans, and disabled persons. Building and maintaining a community of diverse suppliers increases
IBM’s opportunity to hear new ideas, apply
different approaches, and gain access to additional
solutions that respond to customer needs. Suchcollaboration helps IBM deliver innovation, quality
products, and world-class service to a growing
global marketplace.

corporate guide togender-responsive procurement

25

35%

1

OF GDP

Source: World Bank 2012.

3

Source: IFC 2011.

3

Source:World Bank 2012.

38%

FORMAL SMES IN EMERGING MARKETSARE OWNED BY WOMEN WHICH
REPRESENTS 31-38% OF ALL FORMAL
SMES IN THOSE MARKETS

$

2

20%

OF ALL SMALL AND MEDIUMENTERPRISES (SMES) ARE
OWNED BY WOMEN

8-10M

WOMEN-OWNED SMESPRODUCE AROUND

5

4

OF BUSINESSES IN THE
US ARE NOW MAJORITYOWNED BY WOMEN,EMPLOYING 8% OF
THE PRIVATE SECTORWORKFORCE

trillion

THE ANNUAL ECONOMIC
IMPACT OF WOMEN-OWNEDBUSINESSES IN THE US
Source: CWBR 2009.

23M
Source: CWBR 2009.

Source: American Express 2016.

6

JOBS CREATED OR
MAINTAINED THROUGHWOMEN-OWNEDBUSINESSES IN THE US

20

$

7

trillion

NearlyIN ANNUAL CONSUMER SPENDINGIS CONTROLLED BY WOMEN,RISING TO $28
TRILLION IN THE
NEXT 5 YEARS75%

8OF CONSUMERDISCRETIONARY
SPENDING WILL BE
CONTROLLED BY
WOMEN BY 2028
Source: EY 2009.

Source: GEM 2015.

34%

9

GREATER RETURN ON THE
COST OF PROCUREMENT BYCOMPANIES WITH A HIGHERADOPTION RATEOF SUPPLIER
DIVERSITY

OF COMPANIES THAT DIVERSIFIED
THEIR SUPPLIER BASE ENGAGING
WITH WOMEN-OWNEDBUSINESSES REPORT A+ IMPACT ON THEIRPROFITABILITY

Source: EY 2015.

Source:NWBC 2015.

Less than1%

OF SPENDING BY LARGE
BUSINESSES ON SUPPLIERS IS
EARNED BY WOMEN-OWNEDBUSINESSES
Source: Vazquez and Sherman 2014.

33%

10

12

COMPANIES WITH MORE
DIVERSE SUPPLIERPROGRAMMES SPEND
ON AVERAGE

20%LESS ON THEIR BUYINGOPERATIONS
Source: Hackett Group.

11

B. Reputation and Branding
By adopting diverse and inclusive supply chain policies
and practices, corporations also enhance their brands
and increase potential revenues. This is particularly
true in the women’s market. The Women’s BusinessEnterprise National Council (WBENC) reports thatwhen women are aware a company supports womenowned businesses: 78 per cent will try the company’s
products or services; 80 per cent will solidify theirbrand loyalty; and over half will give the company asecond chance if the product or service falls short ofinitial expectations (Vazquez & Sherman, 2013).
More broadly, research shows consumers areconcerned about corporate social responsibility andthis translates into a “bottom-line benefit” for brands
that practice what they preach.

While the results of the survey show that both sexes
have significant concerns about a variety of causes,
women appear more concerned about social responsibility issues than men. This is particularly true whenit comes to human-related issues, such as access toclean water, eradicating poverty and hunger, reducing
child mortality and gender equality (Nielsen, 2014).
This is consistent with the experience of clothing retailer, Benetton Group, which reports that 40 per centof consumers want sustainable apparel.
Inclusive procurement policies also enhance thereputation of corporations among their internaland external stakeholders, including employees,
business-to-business clients, shareholders, andindustry more broadly.

A recent Nielsen survey found that 55 per centof global respondents, both male and female,said they would pay extra for products andservices from companies that are committed
to positive social and environmental impact.

BOX 3

Branding and the “Women Owned” Logo
In 2014, the Women’s Business Enterprise National
Council (WBENC) and WEConnect International
developed and launched the “Women Owned”
initiative with support from retail giant Walmart.
The goal of the initiative is to help consumers
readily identify products that are produced by
women-owned businesses. Firms that have beencertified by WBENC or WEConnect International as
women’s business enterprises (WBEs) may utilize

C. Enhancing Supplier Availability
Corporations also stand to benefit from enhanced
supplier availability and security. Over the past decadeor so, the trend among corporations has been to
consolidate their supply chains. As corporations havethe distinctive and universally recognized Women
Owned logo on their products.
In 2015, Walmart became the first retailer to feature
Women Owned business products, making themavailable in stores and online. Walmart simultaneously launched a new webpage to showcase
products made by women-owned businesses. The
online categories range from beauty and clothing,to electronics, health, and home improvement.
grown larger and more global, they have sought toconsolidate and streamline their operations, including
the procurement of goods and services. Amongother things, this has created a preference for larger
suppliers that can meet the needs of multinational
corporations at the global level (Foggin, 2010). This

corporate guide togender-responsive procurement28

trend toward consolidation has made it even moredifficult for small businesses, including those owned
by women, to break into the corporate supply chain.
There are, of course, inherent risks to “putting all of
your eggs in one basket”. In a recent study of 400
supply chain executives, IBM reported that evenminor missteps or miscalculations can have major
consequences throughout these increasingly complex
and interconnected supply chain networks. CVM
Solutions, a global provider of supplier management
software, similarly observed that, after years of supply
chain consolidation, there is a dangerously small
group of suppliers that receive most of the Fortune
500 procurement spend. If any of these suppliers goesout of business, the impact will likely be felt by dozens, if not hundreds, of corporate supply chains andproduction lines (Foggin, 2010).
A corporation can guard against potential disruptions
to its supply chain by expanding and diversifying its
supplier base to include women-owned and othersmall businesses. This approach has other potential
benefits as well. As noted by many supply chain andbusiness experts, supplier diversity and inclusion:✓Promotes✓
innovation through the entrance of new
products, services, and solutions.
✓Drives✓competition (on price and service levels)
between the company’s existing and potential
vendors.
✓Allows✓
a company to take advantage of newopportunities for business expansion with the
emergence of new consumer needs based upon
shifting demographic realities.
✓Allows✓
a company to procure small orders,specialized products or critical services more
quickly.
✓Increases✓
market penetration and access to diverse
markets.
✓Enhances✓
corporate reputation and customer
loyalty.
✓(CVM✓
Solutions, Apr. 15, 2016; NWBC, 2015; Foggin,2010).

III. Current State of GenderResponsive Purchasing
A. Barriers to Women’s Participation in theFormal Economy
Despite the many contributions women-owned
businesses have made to economic growth anddevelopment around the world, their full potential
has yet to be realized. Indeed, it remains largely
untapped. Today, women-owned businesses lag
behind businesses owned by men on virtually all
performance metrics:••Women-owned businesses tend to be smaller
than those run by men, whether size is measured
by revenue, profitability, or number of employees(Ernst & Young, 2009, p.17).
••Their average growth rate is significantly lower
than the average growth rate of businesses owned
by men (IFC, 2011).
••Their revenues are, on average, only 27 per centof those generated by men-owned businesses(Hadary, 2010).
••The level of entrepreneurial activity among women
is lower than the level of entrepreneurial activity ofmen (GEM, 2015).
There are many reasons for this. Globally, women
entrepreneurs face a wide range of financial andnon-financial barriers that prevent them fromentering and/or fully participating in the formal
economy. To be sure, many of the barriers that women
entrepreneurs confront in the business environment
affect other small businesses as well (Foggin, 2010).
However, women often contend with additional
obstacles above and beyond those encountered bytheir male counterparts because of persistent social,economic, cultural, and/or legal inequities.
This section explores the more significant barriers towomen’s participation in the formal economy under
the general headings of Access to Financial Capital,
Access to Human Capital, and Access to Social Capital.
Because these barriers do not exist in isolation, thissection also explores the unique socio-cultural
challenges faced by women business owners. These
challenges both inform and often exacerbate theother barriers.

corporate guide togender-responsive procurement291. Access to Financial Capital
One of the major factors limiting the size and growth ofwomen-owned businesses and preventing them fromreaching their full potential is lack of financing. Firms
that start with higher levels of capital show better
performance in terms of assets, revenue, profitability
and survival (Ernst & Young, 2009). Women, however,typically start their businesses with less capital andhave less access to financing than men, which limits
their ability to start and grow their businesses.

The International Finance Corporation (IFC)
estimates the credit gap for women-owned
SMEs in the formal sector is approximately$287 billion across all regions (IFC, 2014). When
informal businesses are added to the mix, thecredit gap skyrockets to $1 trillion (Vanderbrug,2013).
There are a variety of structural and socio-cultural
factors contributing to this global credit gap. They
include, but are not limited to, lack of access tocollateral, institutional bias, and socio-cultural norms.
Each of these factors is discussed below.
Women lack access to collateral.
Most financial institutions require some sort ofcollateral to secure a loan. Typically, this means a fixed
asset in the form of a land title or property deed. In
many countries, however, women do not own or haverights to land and therefore lack the collateral withwhich to secure loans. Worldwide, it is estimated thatwomen own only about one per cent of registered
land titles (IFC, 2014).
A recent study found that the laws or customary
practices of 102 countries still deny women the samerights to access land as men (OECD, 2014). Even incountries where the constitution prohibits discrimination against women and grants them equal accessto land and other property, those rights are frequently
curtailed by other laws. For instance, marriage laws
can restrict the legal capacity of married women
to administer property, while succession laws canprevent women from inheriting property. Similarly,

divorce laws often favor men when it comes to the
distribution of property (FAO, n.d.; SIDA, 2015).
In many countries, women must also contend withcustomary law. This is a set of rules or informal laws
based on local customs and tradition. Customary law
is commonly applied in rural Africa, as well as partsof Asia and Latin America and enforced at the local
level even when it is conflicts with national legislation.
Given its local character, customary law is extremely
diverse, even varying from village to village. In someinstances, customary legal systems contain rules that
discriminate against women. This is the case in mostof Africa (FAO, n.d.).
For example, across Africa, customary systems ofproperty tenure account for at least 75 per cent of
the land (SIDA, 2015). Under most of these systems,
women are restricted to secondary land rights, i.e.
they only hold land use rights through their husbands
or male family members. Because of this, womenrisk losing their right to use the land in the event ofdivorce or their husband’s death. In fact, in some areas,
widows are obliged to marry one of their deceased
husband’s brothers in order to maintain their land
use rights (Deutsche Gesellschaft für Internationale
Zusammenarbeit Gmbh, 2013).
As a practical matter, securing women’s access toland is only part of the fight. Countries must also
put in place fair and effective land titling and registration systems that can facilitate the use of land as
collateral. This can be a challenge in many developing
countries, where land administration institutions
often lack the personnel and resources necessary
to reach women in rural areas. Moreover, the Foodand Agricultural Organization of the United Nations(FAO) warns that, while land titling programmes havebecome popular with many international agencies
and beneficiaries, attempts to formalize land titling
and registration can have unintended consequences
for women, including the loss of secondary land rights
under customary law (FAO, 2013). For example, whenland registration programmes were first introducedin Kenya, the male-dominated adjudication committees typically registered land to the male head ofhousehold, but failed to record women’s secondary
rights to the land. This had the unintended effect of
extinguishing those rights altogether (FAO, n.d.).

corporate guide togender-responsive procurement

30

BOX 4The New Kenyan Constitution and Land Rights
As in many African countries, the legal system in
the Republic of Kenya contained contradictory
legal provisions regarding women’s access toland. The Kenyan Constitution, as amended in
1997, prohibited discrimination based on gender.
However, it also exempted family law, succession
law and customary law from this prohibition,2 allof which are critical to ensuring women’s access toland.
Kenya has since reformed its legal system toeliminate these contradictions. In 2010, it adopted
a new Constitution, which recognizes theunqualified right of women to equal treatment
under the law and prohibits gender-based discrimination.3 The new constitution provides, among
other things, that: “Any law, including customarylaw, that is inconsistent with this Constitution isvoid to the extent of the inconsistency, and any act
or omission in contravention of this Constitution
Women lack access to alternative financing arrangements, which could help alleviate the gender credit
gap.
The IFC (2014) observed that collateral registries or
credit bureaus could facilitate access to finance forwomen by providing alternative credit evaluations
and collateral options other than land. According to
the IFC, the availability of credit significantly increases
where security interests are protected and there isa predictable priority for creditors in cases of loan
default. In countries with creditor protections, private
sector credit is 60 per cent of GDP. In those without, it
is only 30 to 32 per cent of GDP (IFC, 2014).

is invalid.” Moreover, it explicitly states that theelimination of gender discrimination in laws,
customs and practices related to land and property
is a guiding principle of land management.
Today, Kenya is actively reforming its laws anddeveloping new legal frameworks to conformto the provisions of the new Constitution. Whileconsiderable progress has been made, there is still,
however, a significant gender gap when it comesto ownership and control of land. Gaafar (2014)
reports that customary law, which often discriminates against women and limits their land andproperty rights, still governs at least 65 per cent ofland in Kenya, and the patriarchal nature of Kenyansociety often limits the rights of even those womennot living on land governed by custom. According
to Gaafar, as little as one per cent of land in Kenya
is titled in the names of women and as little as fiveto six per cent is titled jointly by women and men.
using a variety of movable assets instead of land
titles or property deeds. This includes assets such as
inventories and receivables, household goods andvehicles. Likewise, Liberia’s collateral registry has
unlocked about $270 million of debt financing for
SMEs (Twebaze, 2016).

The potential impact of collateral registries or credit
bureaus can be seen in West Africa, where Ghana andLiberia recently established collateral registries. Since
its collateral registry came online in 2010, Ghana hasregistered 60,000 loans totaling approximately $14
billion. The registry has enabled more than 8,000
SMEs and 30,000 micro-enterprises to secure loans

Even when women have access to collateral and would
otherwise qualify for debt financing, financial institu
tions are less likely to offer them the same terms as
men.
There are several reasons for this. Financial institutions
often mistakenly believe there are more risks, higher
costs and lower returns when loaning money towomen-owned businesses due to their smaller size
(IFC, 2014). In reality, these beliefs are unfounded. The
IFC recently observed that women in fact have similarloan repayment rates to men, notwithstanding thefact that they receive less favorable loan terms thantheir male counterparts. Moreover, female bankclients are more apt to show brand loyalty—which

2

3

The Constitution of the Republic of Kenya (Amendment) Act
No. 10 of 1997, Art. 82.

The Constitution of the Republic of Kenya 2010, Arts. 27 & 40.

corporate guide togender-responsive procurement31improves cross-selling and retention rates—and they
are more risk- adverse, both as business and personalcustomers. All told, women-owned businesses are anunderserved, yet potentially profitable segment of themarket (IFC, 2014).
Women business owners lack access to the types offinancing they need to grow their businesses.
Most commercial banks offer a “one-size-fits-all”
approach to financial products and services, whichmight not be suitable for women-owned businesses.
These banks view most women-owned businesses as
micro-enterprises that only need micro-sized loans.
As a result, women have limited access to small andmedium-sized loans that would allow them to scale
up their businesses quickly or to start businesses in
non-traditional industries (IFC, 2014; IDB, 2012). Like
their male counterparts, women-owned businesses
have a range of financing needs. For example, a recent
survey of women business owners in the Middle Eastand North Africa showed that they were more interested in long-term than short-term capital, as well as
supply chain and equity financing (Niethammer, 2013).

The net result of these institutional biases is thatwomen receive less favorable financing terms thanmen. The loan sizes are smaller, the repayment
periods are shorter, and the interest rates are higher(IFC, 2014). Needless to say, this can and does dissuade
women from seeking financing.
The Inter-American Development Bank (IDB, 2012)
observed that, under traditional lending models,banks tend to reject credit requests from womenowned businesses because of informality, lack of credit
histories and collateral, not fitting the bank’s client
profile, low educational levels, lack of formal work
experience and lack of access to business networks.
In particular, the IDB noted that women could notaccess larger business loans necessary to grow theirbusinesses beyond the micro level. To address this, in
2012, the IDB and the Multilateral Investment Fund
set aside up to $55 million to help financial intermediaries in Latin America and the Caribbean implement
lending models that support growth in women’sbusinesses.

BOX 5

Itaú Unibanco’s Women Entrepreneurship Programme
Itaú Unibanco S/A (Itaú) is Brazil´s largest nonstate bank in market value and one of the planet’s
most valued brands. Itaú has 97,000 employees,
40 million clients and operations in more than
20 countries throughout the Americas, Asia,
Middle East and Europe. The bank maintains astrong presence in the micro, small and medium
enterprises segment, with a loan portfolio of
approximately US$ 45 billion in Brazil.
Itaú is at the forefront of financing for womenbusiness enterprises in Latin America and the
Caribbean. In January 2013, Itaú established
the Women Entrepreneurship Programme inpartnership with the IFC and the Multilateral
Investment Fund. The main objective of theProgramme is to better understand the financial
and nonfinancial needs of women entrepreneurs in
Brazil and to design specific products and services
for them. Andrea Pinotti, director of Itaú, explained,“Women think, act and behave differently thanmen, so there is a need to consider new ways toserve this audience.” Women business enterprises
comprise approximately 53 per cent of businesses
in Brazil and therefore represent an important
market opportunity for the bank.
Further, in December 2013, Itaú signed acommitment with the Clinton Global Initiative
to support 1,500 women-led small and medium
enterprises (SMEs) by developing tailored financial
products and services to directly meet the needsof women entrepreneurs. Itaú committed torecruiting 1,500 female entrepreneurs over a
two-year period in partnership with Goldman
Sachs’s 10,000 Women Programme and otherbusinesses and to develop products and services,by and for women entrepreneurs that cater
directly to their needs, such as advisory services,financial education, a greater focus on relationshipcorporate guide togender-responsive procurement32

banking and savings and credit products. Itaúalso committed to developing and implementing
an innovative decision-making matrix for risk

assessment of women-led SMEs, incorporating
psychometric analysis into the existing scoringmodel.

Source: Global Banking Alliance (2014); Multilateral Investment Fund (2013).

For their part, women tend to shy away from debt
financing.
According to a report published by Ernst and Young(2009), most studies show that even where banks arewilling to provide the same level of funding to men
and women, women appear more reluctant than men
to apply for loans and are more likely than men to
expect rejection. In fact, research shows that womentend to view debt as a “bad thing” that should be
avoided (Hadary, 2010). Because of this, women tend
to start businesses using more of their own money
and less financing from outside sources than men(Ernst & Young, 2009). Women are also more likely
to turn to business earnings for expansion capital,
rather than debt financing, which limits their growthpotential (Hadary, 2010).

Women business owners tend to have difficulties establishing robust business networks andconnections with individuals and organizations that
can actually generate business (Ernst & Young, 2009).
While women business owners have overcome many
historical barriers by building professional networks,
they tend to rely more heavily on family connections
and informal networks for business (NWBC, 2009).
Alyse Nelson, President and CEO of Vital Voices Global
Partnership, stated that women business owners aregood at connecting and “bonding” with others whoshare similar interests and issues, but they are notgood at connecting or “bridging” with people who
do not (Ernst & Young, 2009, p. 12). As a result, many
women miss out on potential business opportunities
that are needed to grow their businesses.

Hadary also notes that women seldom focus onbuilding relationships with bankers and have limited
knowledge about financial products and services.
This, she suggests, explains to a great degree why
women do not pursue more sophisticated types offinancial products and services. Overall, women areless likely than men to use trade credit, business credit
cards, credit lines, vehicle loans, capital leases andequipment loans (NWBC, 2009).

The International Labour Organization (ILO, 2016) notesthat the number of networking and related initiatives
by women’s organizations have been growing inrecent years at the global, regional and national levels. In Brazil, for example, the Brazilian Organizationof Business Women (Organização Brasileira de
Mulheres Empresárias) promotes networking among
businesswomen nationally and internationallywhile also supporting training for startups. In India,
the Federation of Indian Women Entrepreneurs(FIWE) promotes the economic empowerment of
women, particularly the SME segment, by helping
them become successful entrepreneurs and part ofmainstream industry. FIWE provides a networking
platform, technical know-how, industry research andskills development.

2. Access to Social Capital
Women also have limited access to social capital.
Nahapiet and Ghoshal (1998, p. 243) define social
capital as “the sum of the actual and potential
resources embedded within, available through andderived from the network of relationships possessedby an individual or social unit.” Social capital is derived
from business connections, family ties, friends,
churches, schools, professional associations, and thelike. For small businesses, access to formal businessnetworks is key to greater success, both in terms ofstart-up and growth (NWBC, 2009).

3. Access to Human Capital
According to the NWBC (2009, p. 13), “education andexperience are key components of human capital interms of developing entrepreneurial success.” While
women have made tremendous gains over the pastfew decades on the educational front, they still lag

corporate guide togender-responsive procurement33

behind men in terms of business and managerial
experience. 4 Indeed, the OECD (2012) found there
were two key differences between male and female
entrepreneurs that helped explain the relatively lower
revenue generated by women- owned businesses. The
first was lack of managerial experience. The second
was the smaller amount of time women devoted totheir businesses. The latter is explored more fully inthe next sub-section.
Due to their inexperience, women often lack thebusiness skills and financial literacy necessary tooperate and grow their businesses in a profitablemanner. They have difficulty keeping track of accounts,
paying taxes, and complying with rules and regulations (IFC, 2014). Of course, this also reflects the factthat women business owners are often time poor andconfronted by other socio-cultural challenges, as well.

4. Socio-cultural Challenges: Why WomenOwned Businesses are Different
To fully appreciate the barriers facing women-owned
businesses, it is important to understand how
women-owned businesses differ from those headedby men. As noted above, women-owned businesses
tend to be smaller and concentrated in less-profitablesectors, such as retail sales and personal services,where the barriers to entry are low, but so too is thegrowth potential (World Bank, 2012). This is largely areflection of the fact that women entrepreneurs areoften less experienced than their male counterpartsand have less access to financial and social capital,
among other things (NWBC, 2009). Social, politicaland cultural expectations also have a disparate impact on women-owned businesses and, in many
instances, exacerbate or reinforce the other barriers
discussed above.
For starters, women entrepreneurs must contend
with family responsibilities and the demands ofcaregiving to a much greater degree than their male
4 UNESCO reports that female enrolment at the tertiarylevel has grown almost twice as fast as that of men over thelast four decades for reasons that include social mobility,
enhanced income potential and international pressure
to narrow the gender gap. UNESCO (United Nations
Educational, Scientific and Cultural Organization), (2012).
World Atlas for Gender Equality in Education. Paris.

counterparts (Kelley et al., 2015). The World Bank foundthat the differing amounts of time men and women
allocate to family care and household-related chores
are one factor driving segregation and the consequent earnings gaps. In most countries, women beara disproportionate responsibility for these tasks, andas a consequence typically work more hours thanmen. Differences range from one to three hours ofadditional household work, and from two to tentimes more for family care (i.e., care of children, elderly,
and the sick). Moreover, this unequal distribution of
responsibilities does not go away when women enter
the workforce or start a business. (World Bank, 2012)
Because of the resulting time scarcity they experience,
women are typically not able to invest as much timein their businesses as men. Not surprisingly therefore,
research suggests that the social, political and cultural
expectations regarding a women’s responsibilities forthe home and family is one explanation as to why
women-owned businesses do not grow as large as
those owned by men (Ernst & Young, 2009).
Men and women business owners also differ with respect to their views of their own capabilities. In general,
women are less confident than men about whether
they have the knowledge, skills and experience required to start and run a new business (Kelley et al.,2015). Differences between genders are particularly
stark in developed economies, such as Japan, Western
Europe, and the United States. In addition, womentend to be more risk-averse than their male counterparts and more likely to let fear of failure prevent
them from starting a business (Kelley et al., 2015).
Not surprisingly, there is a direct correlation between
capability perceptions and the rates of early-stage
entrepreneurship. In other words, in those economies
where women have less confidence in their ability tostart and run a new business, they are, in fact, starting
and running fewer businesses.
Along the same lines, women business owners tend to have lower expectations for theirbusinesses. According to Hadary (2010), researchshows that the only statistically significant predictor of business growth is the entrepreneur’s goalfor growth. However, women entrepreneurs do not
typically set high goals for themselves and theirbusinesses. There are a number of reasons for this.

corporate guide togender-responsive procurement

34

First, for women entrepreneurs, making money is notalways the primary motivation for starting a business.
Oftentimes, women start businesses to be personallychallenged, and as a way to balance work with family demands. Women are therefore more likely to set
limits on the growth of their businesses in order tomaintain this flexibility. Second, as noted previously,

women entrepreneurs are less confident than men are
in their abilities to start and run a company, and thus,
have lower expectations for growth. Third, womentend to start smaller businesses in sectors where thebarriers to entry and, consequently, the potential for
growth are lower. (Hadary 2010; Ernst & Young, 2009;
Kepler and Shane, 2007).

BOX 6

Coca-Cola’s 5by20 Initiative
The Coca-Cola Company recognizes that womenaround the world are already pillars of our businesssystem. To build on that, in 2010, the company
developed their 5by20 initiative to highlightboth the challenges faced by women, and theireconomic potential. 5by20 is the company’s
global commitment to enable the economic
empowerment of 5 million women entrepreneurs
across the company’s value chain by 2020.
Specifically, this means the small businesses thatthe company and their bottling partners work within more than 200 countries around the world—from fruit farmers and recyclers to retailers andartisans. Through 5by20, the company addresses
the most common barriers women face whentrying to succeed in the marketplace. This initiative
offers women access to business skills training
courses, financial services and connections withpeers or mentors—along with the confidence thatcomes with building a successful business.

Source: http://www.coca-colacompany.com/our-company/5by20-what-were-doing

B. Current Level of Participation in
Corporate Procurement
Corporations can play a pivotal role in helping
women grow their businesses. A survey of 200
small businesses in the United States showed that
becoming a corporate supplier was a pathway to
growth for small businesses (Foggin, 2011). Small
businesses that supplied large corporations had
higher revenues overall and significant revenue andemployment growth. According to Foggin, more than
two dozen small business executives interviewed in
the New York City area reported that “breaking into
the supply chain of a large company was a seminal
moment in their firm’s history – providing increased
stability, heightened credibility and a platform for
growth.” (Foggin, 2010, p. 7). In the United States,
small businesses that became suppliers to large
corporations saw their average revenue grow by 250
per cent and their average number of employees growby more than 150 per cent (NWBC, 2015).

Yet, despite these substantial benefits, the fact still
remains that very few small businesses—including
most notably women-owned small businesses—havebeen able to tap into corporate supply chains.

According to preliminary research conducted
by WEConnect International, women-owned
businesses earn less than one per cent of themoney spent by large businesses on supplies
and services (Vazquez & Sherman, 2014, p. 42).
On the upside, the situation is changing for the betterboth in the private and public sectors. To date, over
1,300 Chief Executive Officers (CEOs) from acrossthe globe have signed statements of support for the
Women’s Empowerment Principles (WEPs), signaling
their support for and commitment to gender equality
and women’s empowerment. The WEPs provide guidance to businesses on how to empower women in theworkplace, marketplace and community. The WEPs are
the result of a collaboration between UN Women andcorporate guide togender-responsive procurement

35

the United Nations Global Compact and are adaptedfrom the Calvert Women’s Principles®.
The many CEOs who have signed statements ofsupport recognize that gender equality and women’s
empowerment are not only laudable goals in and ofthemselves, but they are also good for business andthe economy. Principle 5, in particular, calls for the
implementation of enterprise development, supply
chain and marketing practices that empower women.
This includes:••Expanding business relationships with womenowned enterprises, including small businesses, andwomen entrepreneurs.

••Asking business partners and peers to respect thecompany’s commitment to advancing equality andinclusion.
••Respecting the dignity of women in all marketingand other company materials.
••Ensuring that company products, services andfacilities are not used for human trafficking and/or
labor or sexual exploitation.5
This movement within the private sector to leverage
corporate procurement in support of women-owned
businesses complements efforts being made bygovernments to do the same within the public sector(see Box 7 below).

••Supporting gender-sensitive solutions to credit andlending barriers.
BOX 7

Empowering Women Through Public Procurement6
Governments are increasingly using public
procurement as a tool to promote socio-economic
objectives, including increased entrepreneurial
activity by women-owned businesses. Governments are often the single largest purchaser of
products and services in their countries. Each year,
they spend trillions of dollars worldwide, buying
products, services and implementing public works.
It is estimated that public procurement comprises
as much as 10 to 15 per cent of GDP in developed
countries and as much as 30 to 40 per cent of
GDP in developing countries (International Trade
Centre, 2014).

5

supplies and services each year. Because of this,governments are uniquely positioned to promote
gender equality and women’s empowerment
through public gender-responsive procurement.

Public procurement is a powerful tool for
promoting socio-economic objectives because
it sits at the intersection of the government’s
regulatory and buying powers. On the one hand,governments have the power to regulate market
participants, either by encouraging markets
through competition laws, or by restraining
markets through some sort of social regulation,such as health and safety laws. On the other
hand, governments are also active participants inthe market itself, spending trillions of dollars on

The United States, for example, has long used public
procurement to promote increased participation
by women-owned and other small businesses
in the federal supply chain. The United States
Small Business Act provides, inter alia, that “[t]othe maximum extent practicable, procurement
strategies used by a Federal department or agency
having contracting authority shall facilitate
the maximum participation of small businessconcerns as prime contractors, subcontractors,
and suppliers.” To that end, the Act establishes agovernment-wide goal for participation by small
businesses of not less than 23 per cent of thetotal value of prime contracts awarded by thefederal government for each fiscal year. Importantto this discussion, the Act also establishes a goalfor participation by small businesses “owned
and controlled by women” of not less than 5 percent of the value of all prime and subcontracts
awarded for each fiscal year.7 The SBA tracks the

http://www.weprinciples.org/Site/

7

6 International Trade Centre (2014). Empowering Women
through Public Procurement. Geneva.

15 U.S.C § 644(g) (United States).

corporate guide togender-responsive procurement36federal government and each of its departments
and agencies’ progress toward these goals eachyear.
These targets or goals are one part of a muchbroader set of programmes administered by the
SBA aimed at helping women-owned and othersmall businesses. The SBA also provides financing
in the form of loans, loan guarantees and grants;
it provides technical assistance through businessdevelopment centers, seminars and online
content; and it oversees affirmative procurement
programmes, including small business reservations
or set-asides.
In 2000, for example, the United States Congress
passed the Equity in Contracting for Women Act
authorizing federal procuring entities to set asideor reserve procurements for competition among
women-owned small businesses (WOSBs). For
constitutional reasons, the set-asides are limited
to industries in which women-owned businesses
are underrepresented, such as hardware
manufacturing. Notably, implementation of the
WOSB Federal Contract Assistance Programme
was delayed until February 2011 due, in part, to U.S.
constitutional issues.
This last point highlights the fact that bothgovernments
andcorporations
operatewithin certain constraints. For governments,
constitutional and legal considerations limit thescope of affirmative procurement programmes. For
corporations, it is their fiduciary responsibilities toshareholders.

WOMEN’S EMPOWERMENT PRINCIPLE 5 CALLS FOR THE IMPLEMENTATIONOF ENTERPRISE DEVELOPMENT, SUPPLY CHAIN AND MARKETING
PRACTICES THAT EMPOWER WOMEN
123

EXPANDING BUSINESSRELATIONSHIPS WITH
WOMEN-OWNEDENTERPRISES,INCLUDING SMALL
BUSINESSES,
AND WOMENENTREPRENEURS.

SUPPORTING GENDERSENSITIVE SOLUTIONSTO CREDIT AND
LENDING BARRIERS.

ASKING BUSINESSPARTNERS AND
PEERS TO RESPECT
THE COMPANY’SCOMMITMENT TOADVANCING EQUALITY
AND INCLUSION.

45RESPECTING THE
DIGNITY OF WOMENIN ALL MARKETINGAND OTHER COMPANY
MATERIALS.

ENSURING THATCOMPANY PRODUCTS,SERVICES AND
FACILITIES ARE NOTUSED FOR HUMAN
TRAFFICKING AND/OR LABOR OR SEXUAL
EXPLOITATION.

The WEPs are the result of a collaboration between UN Women and the United
Nations Global Compact and are adapted from the Calvert Women’s Principles

2
UNDERSTANDING AND
FINDING WOMENOWNED BUSINESSENTERPRISES

2. UNDERSTANDING AND
FINDING WOMEN-OWNEDBUSINESS ENTERPRISES
To effectively increase the number of women-owned business enterprises participating in
corporate supply chains, corporations must develop a network of suppliers that are both owned
and controlled by women and capable of providing goods and services in the quantities and of
the quality required. This includes suppliers at all levels of the value chain. This requires, fromthe outset, an in-depth understanding of the potential supplier base and market opportunities,
as well as a commitment by corporate management to pursue gender-responsive procurement.
The process of understanding and finding womenowned businesses begins by defining what it means
to be a “women-owned business enterprise” for the
purposes of corporate procurement. This definition
is foundational to understanding market capabilities,
establishing baselines against which to measureprogress, targeting technical and sometimes financial
assistance, and determining which businesses are
eligible for preferential procurement programmes(ITC, 2014).
This definition is also important because:••Policymakers and service providers need to know
which target groups should be assisted so that they
can develop better policies and services for small
businesses.
••Small business owners need to know into which target group they fall so that they can determine thesupport measures for which they qualify.
••Researchers need a common understanding of whatsmall business is so that they can measure andcompare its performance in different regions andsectors, and with other countries. (Linarelli, et al.,1998, p.34.)

I. Certifying Women-Owned
Business Enterprises
A. Defining “Women-Owned BusinessEnterprises”
There is no universally agreed definition of what itmeans to be a women-owned business enterprise.
Corporations that are members of WBENC andWEConnect International apply a common definition
they developed for members in all target markets.
Other definitions vary between and even withinprocurement systems.
In South Africa, for example, a recent study found thatthe lack of a uniform definition of women-owned
business across public sector departments andagencies made it difficult to assess the effectivenessof affirmative procurement policies. Some procuring
entities had defined a women-owned business tomean a business having at least 50 per cent black
women ownership, others defined it as a businesshaving 100 per cent women ownership, and still others
had no discernible definitions, despite purportedly
tracking procurement spending on women-owned
businesses (ITC, 2014).
Yet, carefully constructed definitions and eligibility
criteria are important, most notably because they
reduce the likelihood of tokenism and fraud, both ofcorporate guide togender-responsive procurement40which undermine the goals of inclusive and diverse
sourcing. Tokenism is “the practice of making only
a perfunctory or symbolic effort to do a particularthing, especially by recruiting a small number ofpeople from underrepresented groups in order togive the appearance of sexual or racial equality
within a workforce.”8 Within the current context,
tokenism occurs when companies place women in
key management positions, but do not simultaneously grant them duties, responsibilities and authority

commensurate with those positions. Tokenism canalso occur when women are given an equity stake ina company, but no real say as to how the company
is run. In South Africa, this practice, known as “fronting”, became so widespread that the government
passed legislation specifically prohibiting it (IFC, 2014).
When it is done solely to gain preferential status as a
women-owned business, these practices can amountto criminal or civil fraud.

BOX 8

Aerospace Firm Misrepresents Itself as Women-Owned
In October 2015, an aerospace company agreed
to pay a $20 million fine to the United States
government for misrepresenting itself as a
women-owned small business in violation of thecivil False Claims Act, 31 U.S.C. §§ 3729-3733. The
company had certified to government contractorsthat it was a women-owned small business to gain
a competitive advantage in obtaining subcontracts.
The contractors in turn made representations
to the government regarding the status of theaerospace company as a women-owned small
business. Government agencies and the U.S. Small
Business Administration track this information toensure small businesses, including those owned
and operated by women, are participating to the
maximum extent practicable in the government
supply chain.

However, the aerospace company did not meetand never did meet the requirements of awomen-owned small business under the U.S.
Small Business Act. Specifically, women did not
own a majority of the company, nor did any womenmanage or control the company’s managementand daily business operations.
Upon reaching the settlement, the U.S. Attorney for
the Southern District of New York remarked: “The
Small Business Act serves the important purposeof increasing legitimate participation by womanowned businesses, and when business owners
engage in fraud that undermines this purpose,
they need to be held to account.”

Source: https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-files-and-settles-civil-fraud-lawsuit-against-ufcaerospace-andTo avoid these potential pitfalls, the definition andeligibility criteria for a women-owned business should
address the following elements:

1. Ownership
To qualify as a women-owned business, a businessmust be owned in whole, or at least more thanhalf, by one or more women. On its face, this would
appear to be a relatively straightforward proposition;
but in practice, it is not. Ownership structures andownership interests can vary considerably fromenterprise to enterprise and from country to country.
Moreover, ownership records do not always tell thewhole story. Ownership interests may be subject
to conditions, executory agreements, voting trusts,
shareholder agreements, and other arrangementsthat can cause or potentially cause the transfer ofownership rights to other individuals or entities, or
restrict or dilute the ownership rights of the majority(women) shareholders.

8 Online Oxford English Dictionary,https://en.oxforddictionaries.com/definition/tokenism

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41

The following examples illustrate the types ofarrangements that would encumber ownershiprights:••An operating agreement provides that the company
may be terminated in the event of any of four conditions: (1) the sale of all the company’s assets; (2) the
unanimous agreement of the members; (3) the entry of a decree of judicial dissolution; and (4) at thedirection of one of the male members. Thus, only
the male member possesses the unilateral ability toterminate the company. The fact that he may do so
without the woman owner‘s consent is a restriction
on the woman’s ownership rights (SBA, 2010, p. 18).
••The by-laws state that if the majority (woman)shareholder wants to sell her shares in the business concern, she must find a buyer for theminority (male) shareholder and the minority
shareholder must approve the buyer. This places acondition on the ownership of the business concern(SBA, 2010, p. 19).
••A transfer of ownership agreement shows that the51 per cent woman owner of a company must giveright of first refusal to a male if she decides to sellher shares. The agreement also requires that thesale price to the male cannot exceed the amountshe paid for the shares initially. This is not unconditional ownership; instead, her rights are conditionaland encumbered (SBA, 2010, p. 19).
••An investment agreement grants a minority (male)shareholder stock options or the right to convert
preferred stock or bonds into common (voting)stock. The minority owners can potentially dilute
the ownership interests of the majority (women)shareholder by exercising stock options or converting preferred stock or bonds into common(i.e., voting) stock.
Arrangements like the ones described above havethe potential to undermine corporate procurement
programmes designed to empower women and support women-owned businesses. For this reason, it isincumbent upon corporations to look beyond the pro
forma ownership of a business to ensure that women
have real, substantial, and continuing ownership ofthe concern. Ideally, their ownership should be both
unconditional and direct.

BOX 9

Scaling Up: The Potential Impact of Restricted Stock Agreements and Stock Options on
Ownership Rights
Ownership interests are not static. They canchange over time, both in terms of quantity andquality. Consider, for example, a technology startup
company founded by two women. When the company is first incorporated, the company will typicallyissue shares to each of the women based on theirrespective capital contributions and/or services
to the company. At that point in time, the women
unconditionally own 100 per cent of the company
stock. As with most startups, the company will
eventually reach a point where it needs additional
funding to grow. The company can obtain thisfunding through either debt financing (i.e. a loan)or equity financing (i.e. outside investors).

If the company chooses the latter option, thenature of the founders’ ownership interests maychange. Venture capital firms or angel investors,
for example, often insist upon a restricted stockagreement in order to protect their investments.
Restricted stock is generally common stock thatis subject to repurchase or forfeiture upon theoccurrence of certain contractual conditions. Mostoften, vesting of the stock is conditioned upon thefounders’ continued employment at the company,
but this is not always the case. At the point the
women agree to the restrictive stock arrangements, their interests in the company are no longer
unconditional, and they can no longer exercise thecustomary incidents of ownerships.

corporate guide togender-responsive procurement422. Control
Unconditional ownership by itself is insufficient toavoid tokenism. Women must also exercise control
over both the long-term decision-making and theday-to-day management and administration of thebusiness operations. Typically, a woman should holdthe highest officer position in the company andshould have the managerial experience needed to
run the concern. Each type of ownership or businessstructure (i.e., sole proprietorship, partnership, limited
liability company, corporations) will present uniqueissues related to control.
It is important to note that articles of incorporation,
operating agreements, bylaws and the like can limit
the actual control or independence of the women who
are purportedly managing and running companies.
If, for example, the female President and Managing
Member of an LLC cannot purchase supplies, borrowmoney, sign contracts, hire and fire employees, or makeother management decisions without the consent of
the other (male) members, then she does not haveeffective control of the company. As with ownership,
corporations must look beyond pro forma titles todetermine whether women actually exercise control
over the management decisions and daily business
operations of the company.

3. Independence
Oftentimes, whether or not a business concern
qualifies as a women-owned business will rest solely
on the issues of ownership and/or control.

For example, to qualify as a women-owned
small business under the US Small Business
Act, a business concern that otherwise meetsthe applicable size standards must be at least
51 per cent unconditionally and directly owned
and controlled by one or more women.
WBENC and WEConnect International use similar
eligibility criteria to determine whether a businessconcern qualifies as a “women business enterprise”(WBE). However, WBENC and WEConnect International
also require that the firm be independent.

An independent business concern is one in which:a) The woman or women owner(s)’s expertisemust be indispensable to the business’s
potential success; and,b) The woman or women owner(s) have theability to perform in its area of specialty/
expertise without substantial reliance uponfinances and resources (e.g., equipment,
automobiles, facilities, etc.) of males or nonwoman business enterprises.
Thus, for example, a women-owned business would
not be considered independent if it could not operate
without the licenses, permits and/or insurance held byanother business. When a women-owned business is
too closely affiliated with or reliant on a non-woman
business enterprise, there is a substantial risk thatthe latter will have the power to control the former.
This too could undermine a corporation’s efforts topromote supplier diversity and empower women.

B. The Significance of Certifying
Certification is the process by which a businessconcern’s eligibility as a women-owned businessis determined. An effective certification process isimportant to both corporations and women-owned
businesses. Certification provides corporations
with an easy and effective way to assess whether abusiness purporting to be women-owned is in fact
women-owned.

For women-owned businesses, certification
maximizes their market opportunities withcorporations, public sector agencies, and othercertified women-owned businesses (Vazquez& Sherman, 2013).
Certification also benefits socially conscious
consumers, who are looking for products and services
from companies that align with their values. This
includes firms that have been certified as womenowned and corporations that procure products fromthem (see ‘Reputation and Branding’ in Chapter 1, p. 28).

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43

C. Leveraging Existing Certifications andCertification Mechanisms
Several options exist for certification: self-certification,
third-party certification, government certification,or certification using in-house resources. Of these,
self-certification is the simplest and least costly
option, but it suffers from a number of drawbacks.
Self-certification relies on individual businesses todetermine whether or not they meet each of theeligibility requirements. The effectiveness of thisprocess is predicated on the ability of individualcompanies to understand what unconditional ownership means, what control means, and what types ofarrangements might be disqualifying. It also relies on
the ability of each company to conduct a critical andhonest self-assessment.
In the United States, the federal procurement systemrelies to a large extent on self-certification. Small
businesses, in particular, must complete annual
representations and certifications regarding their size
status and whether they qualify as women-owned
or other category of small business (such as veteranowned or service-disabled). In addition, each time asmall business responds to a solicitation for goods
or services, it must either verify that its representations and certifications are current, or update themaccordingly.
However, although the federal government relies
heavily on self-certification, there are mechanisms inplace to check potential abuses. For example, under
the Women Owned Small Business (WOSB) Program,
contracting officers are allowed to restrict competition
for certain contracts to small business concerns
owned and controlled by women. Women-owned
small businesses that participate in the Program
may self-certify, so long as they deposit supporting
documentation in a central online repository. This
documentation is subject to examination by the
Small Business Administration, and review bycontracting officers before the award of contracts.
One commentator described this process as “trust,
but verify”.9

Notably, in 2015, Congress deleted the self-certification
option from the WOSB Program, although it
has not yet been implemented. Deletion of theself-certification option may have been in response
to a recent government report in which contracting
officers complained that the WOSB self-certification
process was unduly “burdensome or complex” relative
to other small business programmes with set asides(Government Accountability Office, 2014). As amended,
the law now requires certification “by a Federal
agency, a State government, the [SBA] Administrator,
or a national certifying entity approved by the
Administrator.”10 If the past is any indication, neither
the SBA nor any federal agency is likely to commit theresources needed to develop and implement its own
certification process.
Third-party certifications offer an effective
and, in many respects, superior alternative toeither self-certification or certifications using
in-house resources. Organizations, such as WBENC
and WEConnect International (see Box 10 below),
have been certifying businesses owned, controlled
and operated by women for years. As a consequence,
they already have in place the experience, expertiseand procedures necessary to vet and certify womenbusiness enterprises. Perhaps more importantly, they
have compiled databases of certified women businessenterprises that corporations can leverage to develop
more diverse and inclusive global supply chains.
9 There are also procedures in place allowing one firm
to challenge another firm’s WOSB eligibility during acompetitive procurement. The federal government has othermeans of encouraging compliance as well. In particular, it
can impose administrative, civil and/or criminal penalties onfirms that falsely or fraudulently certify as women-owned
small businesses. These remedies, of course, are not available
to corporations or private citizens.
10 Pub.L. No. 113-291, 2015 National Defense Authorization Act,
Sec. 825.

corporate guide togender-responsive procurement

44BOX 10Connecting Corporate Buyers with Women Business Enterprises in Over 100 Countries
Internationally, WEConnect International has
been at the forefront of efforts to help womenbusiness enterprises access and succeed in global
value chains. To accomplish this, WEConnect
International identifies, educates, registers
and certifies women business enterprises andthen connects them to multinational corporate
buyers. WEConnect International summarized its
approach as follows:
Educate. We educate women business owners
on how to access new markets and grow theircompanies.
Train. We train corporations on how to source fromwomen business owners and we train womenbusiness owners on how to sell to corporations.
Assess. We identify women-owned businesses,
assess their readiness to access new markets,and deliver a certification for Women’s BusinessEnterprise (WBE) wanting to do business withcorporations committed to global supplier diversity
and inclusion.
Connect. We break down the barriers that prevent
women business owners from connecting to eachother and to new market opportunities, including
connections to local and multinational corporate
buyers. 11
Currently, WEConnect International educatesand certifies women business enterprises in 21
countries and provides general support to women
entrepreneurs in more than 100 countries. New
target markets in developing countries are always
under consideration based on member sourcing
activity, women business owner readiness,government support and available funding.
Since its founding in 2009, more than 6,000
certified and self-registered women businessenterprises and more than 75 corporations withover US$1 trillion in total annual purchasing power

have joined WEConnect International’s network.
Members use WEConnect International as a peer
network for sharing global best practices andlessons learned in supplier diversity and inclusive
sourcing. Their multilingual global eNetwork
is a unique digital platform that connects
women suppliers with members based on needs,
collects valuable data, provides easy access toonline training, and tracks certification and useof the “Women Owned” logo to build consumerawareness. With thousands of businesses alreadyin the eNetwork, the goal is to maximize impact by
expanding this sustainable market driven modeland invest in the capacity of various local andglobal partners and stakeholders to collaborate.
The corporations that have demonstrated theirwritten commitment to sourcing more fromwomen-owned businesses by joining WEConnect
International as a local or global member represent
all major industry sectors, and most source
products and services from over 100 countries.
This growing list of industry leaders includes:
Accenture, Act 1, Adient, AIG, American Express,
Anthem, Apple, AvisBudget Group, Barclays, Biogen,BMW, BNY Mellon, Boeing Company, Bristol-Myers
Squibb, Cargill, Chevron, Citi, Coca-Cola Company,
Cox Automotive, Cummins, Inc., Dell, Delta, Disney,
Dun & Bradstreet, ECOLAB, EDF Energy, Enterprise
Rent a Car, Estee Lauder, ExxonMobil Corporation,
EY, Ford, Garanti Bank, Goldman-Sachs, Google,
GSK, Hilton, IBM Corporation, Inter-American
Development Bank, Ingersoll Rand, Intel, InterpublicGroup, ISS, Johnson & Johnson, Johnson Controls,
JP Morgan, Knoll, KPMG, Marriott International,
MasterCard, Merck, MetLife, Microsoft, Monsanto,
Morgan Stanley, Nokia, P&G, Pacific Gas andElectric, PepsiCo, Pfizer, Inc., Roche, Royal Bank of
Scotland, SAP, Sodexo, Superior SDI Limited, TD
Bank, TransCanada, Turkish Economy Bank, UPS,
Verizon, Wal-Mart Stores, Inc., Wells Fargo, Westpac
and Wyndham.

Sources: WEConnect International (2015); https://weconnectinternational.org/en/

11 https://weconnec tinternational.org/en/about-us/
who-we-arecorporate guide togender-responsive procurement

45II. Connecting with Women-Owned
Businesses
To better understand the capabilities of womenowned suppliers in new markets and identify potential
engagement opportunities in those markets, many
corporations rely on established business associations
and networks that focus on connecting diverse suppliers with corporate buyers. These business associations
provide an important platform for corporations to
exchange valuable information (such as below) about
diverse suppliers with whom they have worked:✓Who✓
are a corporation’s top suppliers?
✓How✓long has a supplier worked with a corporation
or in the industry?
✓How✓large is the supplier?
✓How✓
many contracts has a corporation placed witha supplier?
✓What✓
are the sizes of the contracts?

Business associations that provide opportunities forunderstanding and connecting with women-owned
businesses or other underutilized businesses include:••Canadian Aboriginal and Minority
Development Council (CAMSC)

Supplier••Minority Supplier Development Council China(MSD-China)••Minority Supplier Development Council UK (MSDUK)••National Gay and Lesbian Chamber of Commerce(NGLCC)••South Africa Supplier Development Council (SASDC)••Supply Nation in Australia••U.S. Business Leadership Network (USBLN)••U.S. Pan-Asian American Chamber of Commerce(USPAACC)••U.S. Small Business Administration (SBA)••WEConnect International••Women’s Business Enterprise National Council(WBENC)

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46

3
OVERCOMINGTHE CHALLENGES
FACING WOMENOWNED BUSINESSENTERPRISES

3. OVERCOMING THE
CHALLENGES FACINGWOMEN-OWNEDBUSINESS ENTERPRISESFor small businesses, becoming a corporate supplier is a catalyst to growth. It provides themwith increased revenue and financial stability, it opens doors to other large clients, and it lends
instant credibility (Foggin, 2009). Today, however, breaking into the corporate supply chain canbe difficult, as evidenced by the relatively small number of companies that have managed to doso. This is particularly true for businesses owned by women.
Women business owners who are seeking toaccess the corporate supply chain face a number ofsignificant challenges, from simply knowing whereto find procurement opportunities to meeting thetechnical and financial requirements of corporations.
This section presents some commonly citedchallenges faced by women business owners andtechniques for addressing them.
The challenges cited below are not necessarily
exclusive to women-owned businesses. Many
affect other small businesses as well, irrespective ofownership. Consequently, reforms addressing thesechallenges may have collateral benefits for othersmall businesses.
It is important to note, however, that women-owned
businesses are disproportionately impacted bythese challenges. Women-owned businesses arestarting from a less advantageous position than theirmale counterparts in terms of access to financial,human and social capital. They also must contend
with additional obstacles above and beyond thoseencountered by men because of persistent social,economic, cultural, and/or legal inequities.

Strategic Sourcing
A. Increasing Access to Information and Social Networks
B. Streamlining the Application Process
C. Streamlining the Contracting Process
D. Limiting Contract Sizes
E. Establishing Appropriate Award Criteria
F. Providing Feedback
G.Paying Promptly

corporate guide togender-responsive procurement48

I. Strategic Sourcing
Over the past few decades, corporations havedeveloped complex, fully integrated global supply
chain structures that are difficult for women-owned
and other small businesses to penetrate. A numberof factors contributed to the growth of these global
supply networks, including the information andcommunications technology (ICT) revolution in the
mid-1980s, which enabled corporations to coordinate
complex tasks at a distance and at a relatively low
cost, and the proliferation of international standards,
which allowed companies to export the productionof parts and components to more low cost locations(Park, Nayyar & Low, 2013).
At the same time, corporations grew larger and moreglobal, especially through mergers and acquisitions. As
part of this consolidation process, corporations havetaken advantage of their global scale by combining
and standardizing operations to increase efficiency,
while buying goods and services globally and ingreater bulk. Corporations have simultaneously
reduced the number of suppliers they use to a selectfew who have proven track records and can provide
goods and services in large quantities and at lower
prices. These changes have disadvantaged small andmedium businesses (Center for a Urban Future, 2010).
The challenge for corporations is to always haveaccess to the best suppliers, which often includes
small growth-oriented businesses delivering muchneeded innovation. Rethinking today’s supply chain
model to be more inclusive is also an important risk
mitigation strategy to decrease dependence on one
major supplier. By encouraging more women-owned
and other small businesses to compete for theirbusiness, corporations gain access to a wider pool of
supplier options. Reforming corporate procurement
policies and practices to be more inclusive is a goodplace to start.
At the outset, it is important to note that there wasuniversal consensus among the corporations andwomen-owned businesses, which were consulted
during the preparation of this Guide, that corporations
should not lower their standards to accommodate
women-owned businesses. Rather, the emphasisshould be on removing barriers and developing thecapacity of these suppliers to compete with otherbusinesses.

A. Increasing Access to Information andSocial Networks
For suppliers, developing a relationship with potential
customers is critical. It helps them understandthe customer’s needs and provides them with anopportunity to pitch their goods and services. In recent
studies of corporate supply chains, small businessescited the lack of information about corporations
as one of the major impediments to becoming a
supplier (Foggin, 2011 & 2010). Corporate procurement
processes are often opaque and many small businessowners do not know where to start or whom tocontact. One IBM procurement executive remarked, “It
can be a challenge to find the right business unit, theright person to call, and to understand what a large
enterprise like IBM buys on a regular basis.” (Foggin,2010, p. 14).
The prospect of having to develop relationships withcorporate buyers is even more daunting for womenbusiness owners. Women lack the formal businessnetworks through which they can obtain information
about potential corporate customers or get an introduction to the right person in the company. Indeed,
the National Women’s Business Council (2015) recently
reported that the number one impediment facing
women business owners was the lack of contact withcorporate decision makers, followed closely by the lackof relationships with buyers. According to the report:“Women felt that accessing an individual who could
actually execute a contract and hire them was a major
impediment and barrier yet to be removed.” (NWBC,
2015, p. ii).
Women business owners reported that the lack of
notification about contract opportunities was also ahindrance. In some cases, this is a direct consequenceof not having strong relationships with corporate
buyers, who are responsible for sourcing supplies
and services and making purchasing decisions. For
women business owners who are participating in
a supplier diversity and inclusion programme, thesupplier diversity and inclusion programme manager
is the one who typically alerts suppliers to upcoming

corporate guide togender-responsive procurement49

opportunities. This works so long as there is close
cooperation and coordination between the supplier
diversity and inclusion program manager and thecorporate buyers. If, however, this cooperation andcoordination breaks down then the likelihood thatthe women business owners will learn of upcoming
contract opportunities diminishes (NWBC, 2015). This,of course, underscores the importance of empowering
supplier diversity and inclusion program managers
to work closely with buyers and other parts of thebusiness.
Notably, the lack of information about procurement
processes and opportunities is not confined to theprivate sector. A common complaint among micro,
small and medium-sized businesses doing businesswith governments is that they are not aware of anddo not know where to look for public procurement
opportunities (ITC, 2014).
Some techniques for making the procurement
process more accessible to suppliers include:✓Hosting✓
and/or participating in supplierconferences (e.g. WBENC, WEConnect International,
or International Trade Centre conferences andvendor forums) to educate small businesses on thecorporate purchasing process and to connect themwith buyers.
✓Publishing✓procurement policies, procedures andpoints of contact on the corporate website.
✓Establishing✓a single web portal, or electronicclearinghouse, through which corporate tenders are
published.12

B. Streamlining the Application Process
To become a corporate supplier, small businesses
must first contend with a lengthy and burdensome
application process. This typically involves completinga lengthy questionnaire and submitting reams of
documentation on their companies. Corporations
believe this information is essential because it allows
them to evaluate product quality as well as thecapabilities and reliability of the suppliers themselves.
Small businesses, on the other hand, find this process
time-consuming and challenging.
12 The appropriateness and effectiveness of web-based
solutions depends upon the level of electronic penetration
in a given country. International Trade Centre (2014).
Empowering Women through Public Procurement. Geneva.

To vet potential suppliers, corporations evaluate themagainst a broad range of criteria, which may include
the following:••Supplier capabilities, past performance, management, and expertise••Quality standards••Competitive pricing••Delivery schedules••Technology capabilities and infrastructure••Financial stability and tax status••Insurance requirements••Region(s) of operation (scale)••IT Security Procedures••Sustainability Efforts
The application process can dissuade many womenowned and other small businesses from applying tobecome corporate suppliers, especially when every
corporation has its own application process andthere are no guarantees it will result in contracts.
Successfully navigating the application process onlymeans that a supplier is eligible to compete for future
procurement opportunities.
Small businesses have limited time and resources,
which means that whatever is spent filling out
applications is that which cannot be spent elsewhere.
This is particularly true for women-owned businesses,
which tend to be smaller than businesses owned bymen, have less business experience, and are time poor
due to competing family and childcare responsibilities.
Consequently, the more onerous the application process is, the less likely that women business owners
will apply.
Several large companies have attempted to address
this problem by creating a single, standardized
online application called the Supplier Connectionthat allows small businesses to market themselves
to multiple U.S. companies at the same time.13 These
companies, among others, include Citi, Dell, Facebook,
IBM, Kellogg’s, Office Depot, Pfizer, Siemens, and UPS.
13 https://www.supplier-connection.net/SupplierConnection/index.html; see also, https://www.sba.gov/blogs/howmove-and-become-part-supply-chain-larger-companies.

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50

There are other steps corporations can take to streamline the application process short of creating a single,
consolidated registration system, like the SupplierConnection. For starters, corporations should, to the
maximum extent practicable, standardize the type of
information requested across business units, so that
suppliers only have to input the information once intoa centralized database.
Corporations should also review the technical andfinancial qualifications requirements for suppliers toensure they make sense. Small businesses frequently
complain that procuring agencies set technicalqualification criteria too high and/or establish
financial requirements that are too onerous. To be
sure, corporations have a duty to ensure suppliers have the technical and financial capabilities
necessary to perform the contracts, but care must be
taken to ensure that the qualification requirements
are appropriately tailored to the circumstances. A onesize-fits-all approach will unnecessarily exclude many
women-owned businesses.
This is particularly true for financial requirements—
many women-owned businesses often do notknow how to meet these requirements, nor havethe financial resources necessary (NWBC, 2015). For
example, in the public procurement context, a numberof African women business owners and organizations
consulted by the ITC (2014) repeatedly commented
that the requirement for audited financial accounts
is a major stumbling block to doing business withthe government. Many women entrepreneurs,
particularly in developing economies, simply do nothave the financial literacy to properly maintain theirbooks and records, nor can they afford to have theiraccounts audited every year. Other financial requirements, such as performance bonds, bid guarantees,
and even fees for tender documents, are also beyond
the reach of some women-owned businesses. Like
all qualification criteria, financial requirements need
to be reviewed and appropriately tailored to the size,
scope and complexity of the procurement.

C. Streamlining the Contracting Process
Women-owned businesses that successfully navigate the application process to become corporate
suppliers are not guaranteed business. It simply
means they are eligible to compete for upcoming

contract opportunities. For many women-owned
businesses, the corporate contracting process canbe just as daunting as the application process, if not
more so. Indeed, over half of the 836 women businessowners surveyed by NWBC in 2015 indicated that thecorporate contracting process was too complex andoverly bureaucratic.
Because of this, corporations should make every effort
to simplify, clarify, and standardize the contracting
process and documentation. As Lineralli, et al. (2008)
explained:
Standardization has the potential to lower the transaction costs of contracting. Standardization also
tends to produce a positive network externality. As
frequency of their use increases, courts and parties
become more familiar with the standardized
terms and conditions, and certainty increases.
Standardized terms also solve certain asymmetric
information problems. Clauses become known in
the field and parties are in a better position to know
the risks and benefits associated with the clauses.

D. Limiting Contract Sizes
As corporations have grown larger and vastly moreglobal, they have reduced the number of suppliers
they use to a select few who can provide goods andservices in large quantities and at lower prices. Thishas placed women-owned businesses at a distinct
disadvantage. The practice of bundling multiple
requirements into one large contract can effectively
preclude many women-owned businesses fromcompeting for the work because they do not have thescope or depth of other firms.
Hadary (2010) reports that large prime contractors
include women-owned businesses as subcontractors
in their bids to satisfy the diversity requirements ofcorporations, but after winning the contract, thecorporations do not provide any work to them. She
suggests that the same “bait-and-switch” technique
is used by corporations in the government procurement context, as well.
To be sure, there are benefits to bundling multiple
requirements into one large contract or purchasing inbulk from a select group of suppliers, but there are also
costs. Corporations that follow this model are more

corporate guide togender-responsive procurement51

vulnerable to disruptions in the supply chain and they
miss out on the many other potential benefits associated with supplier diversity and inclusion. For many
women-owned and other small businesses, small
contracts serve as an entry-point into the corporate

supply chain. Whenever practical, corporations shouldlook for opportunities to unbundle requirements, or
limit the size of their contracts, particularly at the
local level.

BOX 11

Whirlpool Latin America: Identifying “Bite-Size” Opportunities For Micro-Businesses
Since 2002, Whirlpool Latin America has beenworking through its Social Responsibility Institute(Consulado da Mulher) to empower women
entrepreneurs who live in poor communities
surrounding its production facilities and administrative units. This was primarily being done
through capacity building programmes and capital
investment.

This innovative initiative has generated positive
results for both the company and women vendors:

In 2007, Whirlpool decided to include these womenin its supplier list. Since then, women have operated the snack bars in all of Whirlpool’s business
units with the assistance of the Institute. The
company has also incentivized its administrative
areas to purchase coffee breaks, lunch and food forevents from these women suppliers.

••The snack bars alone generated gross revenue of
one million Brazilian reals between January andOctober 2016.

E. Establishing Appropriate Award Criteria
Every year, corporations purchase trillions of dollars
worth of products globally, from raw materials tofinished products to services. The methods they use
to acquire those goods and services vary depending
upon the particular needs, objectives, and policiesof the company. A multinational retailer’s approachto buying products for its summer catalogue will bedifferent from a manufacturer’s approach to buying
capital equipment. Generally, however, large corporations tend to use competitive procurements where
the award is typically made to the bidder who submitted the lowest priced, technically acceptable tender.
In general, women-owned businesses cannot successfully compete against other businesses when priceis the most predominant selection criteria. Indeed,a recent evaluation of SME access to public procurement markets in the European Union noted that••To date, approximately 110 women have benefited
from the programme.
••In 2016, there were more than ten women-owned
micro businesses that supplied goods andservices to Whirlpool.

••Two other companies decided to include these
women on their supply chains, one in the insurance business and one in the medical business.

the most frequent problem faced by SMEs—which
includes the majority of women-owned businesses—
was the procuring entities’ over-emphasis on price(DG Enterprise, 2007).
By emphasizing price rather than “value for money”,
the procuring entities not only ignore the life-cycle
costs associated with the purchases, but also forego
the many innovative solutions offered by small firms.
Accordingly, the research suggests that procuring
entities wishing to level the playing field for small
businesses, including those owned by women, should
consider awarding contracts to those firms whose
offers represent the best overall value to the procuring
entities, rather than simply the lowest price. Best value
determinations (also known as “economically mostadvantageous” determinations) take into accountnon-price factors such as technical merit, quality,
cost-effectiveness, and after-sales service in addition
to price (ITC, 2014).

corporate guide togender-responsive procurement52

F. Providing Feedback
The importance of providing feedback to unsuccessful
bidders after a competitive procurement cannot be
overstated. Post-award feedback provides supplierswith invaluable information about the strengths
and weaknesses of their tenders so that they are
better able to compete for contract opportunities in
the future. In short, feedback is an important tool for
supplier development.
Within the government marketplace, feedback is seen
as an essential component of the procurement process and is viewed as international best practice. Moreand more countries are mandating that procuring
agencies provide unsuccessful bidders with an opportunity for feedback. The recently revised World Trade
Organization Government Procurement Agreement(WTO GPA) also obliges procuring entities to provide
an unsuccessful supplier, upon request, with an explanation of the reasons why their tender was notselected, and the relative advantages of the successful
supplier’s tender.14

G. Paying Promptly
In a survey of small businesses in New York City,
almost half of the respondents reported that thebiggest challenge they encountered with corporate
customers was the slow payment of invoices (Foggin,2011). This is a problem echoed by small businesses
around the world.
Delayed payments can have a devastating effecton women-owned small businesses. Because theirfinancial resources tend to be limited in the first place,
women-owned businesses are less able than larger
firms to absorb the impact of delayed payments. Such
payments reduce the working capital available towomen-owned businesses and negatively affect theirproduction capacity and profitability (Linarelli, et al.,1998). The effects of delayed payments are particularly
acute where the women entrepreneurs are servicing
loans that enabled them to compete for and performthe contracts in the first place. This means that these
women-owned businesses end up financing the
public or private entity they performed contracts for
instead. And in extreme cases, the women are forced

to wind up their businesses because the debt becomesunsustainable or they lack sufficient working capital
to continue operating.
To alleviate the financial distress caused by delayed
payments, it is incumbent upon corporations toestablish efficient and effective systems for processing
invoices and remitting payments. Corporations should
also consider more favorable payment terms for
women-owned and other small businesses, especially
if the corporation’s standard payment terms exceed
30 days (i.e., net 30).
Notably, delayed payments are also an issue forsecond and lower-tier suppliers. Just because corporations may pay their first-tier suppliers promptly does
not mean these suppliers will reciprocate by paying
their subcontractors in a timely fashion. In fact,
there are plenty of anecdotes of first-tier suppliers
who fail to pay their second or lower-tier suppliers
at all. As corporations continue to consolidate their
supply chains and reduce the number of first-tiersuppliers, it is increasingly more likely that the pointof entry for women-owned businesses will be at thelower tiers of the corporate supply chain. Corporations
should therefore make every effort to encourage,
contractually or otherwise, their first-tier suppliers topromptly pay subcontractors.

II. Supplier Development
The discussion thus far has focused on identifying andeliminating structural impediments on the buy sidethat prevent women business owners from accessing
and fully participating in the corporate supply
chain. To be successful, however, gender-responsive
procurement programmes must do more than simply
open the doors to women-owned businesses. They
must also develop the capacity of women-owned
businesses to compete and succeed as suppliers(NWBC, 2015).
Supplier development is defined as “the process ofworking with certain suppliers on a one-to-one basis
to improve their performance and expand capabilities
for the benefit of the buying organization”. (CVM
Solutions, 2016, Sept. 1). However, supplier development
yields benefits for both the buying organization and

14 See Article XVI:1 of the revised Agreement.

corporate guide togender-responsive procurement53its suppliers. From a corporate perspective, theseinclude:✓Expanding✓
the competitive landscape (pricing,
service levels, and offerings) between theorganization’s existing and potential vendors.
✓Promoting✓
innovation and “out-of-the-box”
thought-leadership through the entrance of new
products, services, and solutions in the business.
✓Growing✓
the sources and channels from which toprocure products and services.
✓Creating✓a collaborative environment between
suppliers that may see themselves as competitors,
when in fact their solutions may be complementary,allowing them to team up on business opportunities
on which they could not normally bid.
✓Showcasing✓
the organization’s commitment to theeconomic growth of the communities in which they
operate.

Corporations currently use a variety of activities toimprove supplier performance and enhance theircapabilities. The following are a few capacity-building
activities that are particularly relevant to womenowned businesses.

A. Establishing Outreach Programmes
As mentioned earlier, two major impediments
preventing women business owners from accessing
corporate supply chains is their lack of contact withcorporate decision makers, and lack of relationships
with buyers. Women business owners tend to lack thesocial networks necessary to generate new businessor get introductions to corporate decision makers andbuyers. They also lack sufficient information about
potential corporate customers. Outreach programmes
can address these issues.
Outreach programmes often include one or more of
the following activities:✓Driving✓
job creation.

••Attendance and/or sponsorship of trade fairs.

✓Building✓the capacity of diverse businesses not
only to serve the organization more effectively but
also to increase their sustainability in the entire
marketplace.

••Participation in local, state, and national womenowned business councils.

✓Increasing✓
the organization’s customer satisfaction,
whether it be B2B or B2C.
✓Increasing✓
visibility and awareness of executive
management to key diverse suppliers.
✓Fostering✓
engagement of management executives across all parts of the organization, not justProcurement.
(Ibid.)••Sponsorship of networking events and educational workshops for women-owned and first-tiersuppliers.
••Public recognition of outstanding women-owned
suppliers.
••Dissemination of information about genderresponsive procurement programmes on corporatewebsites with points of contact and links to resources for suppliers.
••Capacity-building and supplier mentorship.

BOX 12Government of Karnataka in India
In 2014, the Government of Karnataka in India
developed an Industrial Policy to drive sustainable
inclusive economic growth from 2014 to 2019. At
the heart of the policy is supporting micro, small
and medium enterprises (MSMEs), and economic
opportunity to reduce poverty, with a specificfocus on women’s enterprises, as set forth in thefollowing provision:

5.6.12 Encouragement to Women Entrepreneurs:With a view to encourage and give a special thrust
to women entrepreneurship and to improvethe contribution of women entrepreneurs andfacilitate creation of more women enterprisesin the State in the next five years, enterprises
promoted either as a proprietary concern or a partnership firm / private limited company where all

corporate guide togender-responsive procurement

54the partners or directors are women, following
initiatives are proposed:
i. It is proposed to promote two industrial areas in
the State at potential locations such as HubliDharwad and Harohally in Kanakapura taluk for
women.
ii. Reservation of 5% of plots/sheds in the Industrial
Areas/Estates developed by KIADB/KSSIDC forwomen entrepreneurs in all the future Industrial
areas/estates.
iii. Exclusive cluster for women in Textile, Gem &Jewellery.
iv.Trained entrepreneurs by CEDOK or recognizedtraining institutions will be provided with low
interest start up loans (with interest subsidy)
and flexible repayment schedule.
v. State to introduce Entrepreneurship Development Programmes exclusively for prospective
women entrepreneurs.

vi. MSMEs promoted by women entrepreneurs will
be encouraged with attractive incentives andconcessions.
The Government is turning policy into action by
partnering with WEConnect International. In 2016,
the Government provided $400,000 in in-kind
support to WEConnect International in India
to certify women’s business enterprises and tosupport the 2016 ThinkBig Summit which offeredover 3,000 women-owned businesses, corporations, buyers, and investors the opportunity toconnect.
This is a meaningful policy that incorporates
women entrepreneurs as a core component of theeconomic growth plan and ensures that policy isconnected to action by supporting initiatives thatput money into the hands of women and provides
real market opportunity for women-owned
businesses.

Source: http://www.bangaloreitbt.in/docs/2014-new/industrial_policy.pdf.

B. Technical Assistance
Women-owned businesses tend to have less accessto human capital than businesses led by men. While
women have made tremendous gains over the pastfew decades on the educational front, they still lag
behind men in terms of business and managerial
experience. This directly impacts their potential tosucceed in business.
These obstacles can be mitigated to some extent
through technical assistance. A 2009 review of SBA’s
Women’s Business Center Programme found that
education has been one of the best options for closing
the gap between women and men entrepreneurs.
Specifically, the review found: “Entrepreneurial education is successful in serving women if, in addition toacademic learning, it provides training in practicalskills, support services and experiential learning aimed
at increasing women’s understanding and access tohuman, financial, and social capital.” (NWBC, 2009).
The review also notes that learning environments
designed specifically for women are more successful.

Technical assistance can be delivered through a varietyof channels, including but not limited to, corporate
outreach, government agencies, educational institutions, and Trade Support Institutions—including
most notably, women’s business associations andorganizations.
The potential variety of technical assistance activities
is limitless. For example:••As part of Ford Motor Company’s technicalassistance programme, retired automotive industry
employees are placed with minority, women andveteran-owned suppliers to assist them withimproving their business processes and solving
short-term problems.15••Toyota annually provides performance feedback
to each of its first-tier suppliers, including anassessment of key supplier diversity factors(NWBC, 2015).
15 http://www.fordsdd.com/sdd_program/init_ftap.htm.

corporate guide togender-responsive procurement

55

••Coca Cola, in partnership with the Gates Foundation,
provided a grant to TechnoServe to work withmango and passion fruit farmers in Uganda and
Kenya to increase their productivity, improve quality,
organize themselves and gain access to credit.
••Ernst & Young, Count Me In, Vital Voices Global
Partnership and other organizations have collaborated with the U.S. State Department to promote
access to markets, and finance and train women
throughout the Western Hemisphere (Ernst &Young, 2009).
••The Tuck-WBENC Executive Program sponsored by
IBM is an intensive, five-day executive development
programme for WBENC-certified Women BusinessEnterprises (WBE). It is an intensive learning
experience that focuses primarily on increasing
the competitive advantage and robustness of theparticipant’s own business. Up to 60 WBE attendees
form a learning community that will continue toprovide a source of support, expertise, opportunities,
and strategic alliances long after graduation.16

C. Financial Assistancethem from reaching their full potential is the lackof financing. It is a barrier faced by women-owned
businesses around the globe. Indeed, the IFC estimatesthe credit gap for women-owned SMEs in the formal
sector alone is approximately $287 billion across all
regions (IFC, 2014).
There are a number of legal, institutional, andsocio-cultural factors that contribute to this gendercredit gap and an equal, if not greater, number ofpotential solutions and funding sources. Whatever
form financial assistance takes, the evidence
strongly suggests that the assistance must be specifically tailored for women business owners (IFC, 2014).
In Botswana, for example, a study conducted by theSouthern Africa Gender Protocol Alliance found thatcommercial banks as well as government financing
sources tended to exclude women. By contrast,
programmes specifically designed for women, such as
the Women’s Finance House Botswana and Womenin Business Association, made a real difference towomen’s business involvement and empowerment(Southern Africa Gender Protocol Alliance, 2012).

One of the major factors limiting the size andgrowth of women-owned businesses and preventing
BOX 13Benetton Group’s Commitment to Support Women Starts in Bangladesh and Pakistan
The Benetton Group is putting forth a two-year
calendar of concrete initiatives aimed at female
empowerment and legitimization in Pakistan and
Bangladesh.
Over the next two years Benetton will support
the activities of UN Women (the United Nationsorganization for gender equality and theempowerment of women), specifically to improvethe conditions of female garment workers andreduce their vulnerability, both at home and in theworkplace.
In Bangladesh, Benetton will support some
5,000-6,000 women currently employed in the
RMG (Ready Made Garments) sector; in Pakistan
Benetton will aid around 1,500 women living in the
manufacturing district of Sialkot, giving priority to
the unemployed, those working at home or in thefields and those belonging to ethnic and religious
minorities.

Source: https://us.benetton.com/news-events/benetton-groups-commitment-support-women-starts-bangladesh-pakistan/Niethammer (2013) points out that the impact ofincreasing women’s access to financing is greater if
it is part of a broader capacity-building programme
targeted at women business owners. This is theapproach commonly used by institutions, such as the
IFC. For example, as part of its Banking on Women
strategy, IFC provides customized training to women
entrepreneurs in business planning, management,

16 http://www.wbenc.org/tuck-wbenc-executive-program/.

corporate guide togender-responsive procurement

56

financial literacy and demystifying banks and credit
applications (IFC, 2013).
Two global organizations working with private sector
and multilateral institutions to increase access to finance by women business owners are Women’s World
Banking and the Global Banking Alliance for Women.
Women’s World Banking is a nonprofit devoted to giving more low-income women access to the financial
tools and resources required to build security andprosperity through a global network of 40 financial
institutions from 29 countries.17 The Global Banking
Alliance for Women is a consortium of financial institutions dedicated to supporting member banks
seeking to capture the women’s market in over 135
countries by sharing best practice and offering women the financial tools needed for success.18

D. Business Mentoring
Mentoring is a critical component of supplierdevelopment programmes for women-owned
businesses, in part because women tend to have
weaker business backgrounds then men. Generally
speaking, mentorship is “the personal developmental
relationship in which a more experienced or more
knowledgeable person helps a less experienced orless knowledgeable person. It is a process for sharing
knowledge relevant to work, career, or professional
development. The intent is to develop another’scapabilities through a one-on-one relationship that is
outside a formal organizational structure.”19
According to NWBC (2009), women preferrelationship-oriented
approaches
tosupplier
development. Research shows that women businessowners are more likely to have success starting andgrowing their businesses if they have experienced
entrepreneurs as mentors.

correlation between capability perceptions and therates of early-stage entrepreneurship—in thoseeconomies where women have less confidence intheir ability to start and run a new business, they are,in fact, starting and running fewer businesses (GEM,
2016, p. 43).
In 2008, based on a growing body of research tosupport the economic opportunity of investing in
women, Goldman Sachs launched 10,000 Women
to provide women entrepreneurs around the world
with business management education, mentoringand networking, and access to capital. To date, theinitiative has reached over 10,000 women from across
56 countries and resulted in immediate and sustained
business growth for graduates of the programme. In
addition, since women entrepreneurs described a lackof access to capital as one of the biggest hurdles togrowing their businesses, in 2014, Goldman Sachs
partnered with the IFC to create a loan facility for
women-owned small-and-medium enterprises toenable 100,000 women around the world to access
capital. 20
Since 2008, the EY Entrepreneurial Winning Women
Program has offered a competition and executive
leadership programme for a select group of highpotential women entrepreneurs whose businesses
show real potential to scale, and then helps them doit. Launched in the United States, the programme now
serves women entrepreneurs based in the Asia-Pacific,
Brazil, European Union, New Zealand, Russia, Southern
Africa and Turkey.21

III. Infrastructure Development

Among other things, mentorship can help womendevelop confidence about their business skills andprospects. In general, women are less confident thanmen about whether they have the knowledge, skills
and experience required to start and run a new
business. Not surprisingly therefore, there is a direct

In many regions of the world, the effectiveness of the
supplier development and sourcing reforms discussed
above may be limited by the lack of technologicalinfrastructure. Studies have shown that the use of
information and communications technologies (ICTs),such as mobile phones, computers, and the internet,
by micro and small businesses has led to betterbusiness performance and improved living conditions(ADB, 2014). Goldman Sachs estimates that if lags in

17 https://w w w.womensworldbanking .org/about-us/
what-we-do/.

20 http://www.goldmansachs.com /citizenship/10000women/#about-the-program.

18 http://www.gbaforwomen.org/about/.

21 http://www.ey.com/us/en/services/strategic-growth-markets/entrepreneurial-winning-women--about-theprogram

19 http://www.thementra.com/about-the-mentra/mentorship/.

corporate guide togender-responsive procurement57technology were addressed in the Persian Gulf, alongwith low levels of investment and human resource
development, the region could close its income gap
with the G-7 countries by 2050 (Gill et al., 2010).
While ICT has the potential to help women entrepreneurs overcome many of the constraints they face,
unfortunately, the research suggests an existing
gender divide in digital technology in both developed

and developing countries (although most pronounced
in low- and middle-income countries). For example,
women are estimated to comprise less than 25 percent of Internet users in Africa, 22 per cent in Asia, 38
per cent in Latin America, and only 6 per cent in the
Middle East (Gill et al., 2010).

BOX 14

Mahila E-haat Online Marketing Platform
Marketing has proven to be a challenge for many
women entrepreneurs in India because they lackaccess to marketing platforms and technologicalinfrastructure. To address this challenge, theMinistry of Women & Child Development established an online marketing platform, known as
Mahila E-haat. Here, women entrepreneurs canadvertise their products or services—providing

a photograph, description, cost and contact
details—enabling direct contact between buyers
and vendors or service providers. Importantly,
the entire business transaction can be handled
through mobile phones. Mahila E-haat is expected
to result in a paradigm shift enabling women toexercise greater control over their finances byleveraging technology.

Source: http://mahilaehaat-rmk.gov.in

Access to basic infrastructure can be challenging formany women. In India, where women often lack accessto basic equipment and floor space where they canmanufacture their products, cooperatives are formed
to pool resources. According to the Governmentof India, the cooperative movement started in the
agricultural sector towards the end of the 19th
century, when farmers discovered that cooperatives
were an attractive mechanism for pooling theirmeager resources to solve problems relating to credit,
supplies, and marketing.

Today, many agricultural and informal sector workers
around the world—home-based workers andwaste pickers in particular—organize into collective
enterprises to pool resources, achieve economies ofscale, secure markets and increase their visibility andbargaining power. Collective enterprises provide a key
pathway to formalization and to increased income
security for previously isolated workers. They can also
play a significant role in fighting stigmatization.

BOX 15

Self-Employed Women’s Association (SEWA)
In India, the Self-Employed Women’s Association(SEWA), WEConnect International and Accenture
worked together to develop the skills of SEWA
waste-pickers, most of whom were vulnerable
female laborers in the informal sector. With seedfunding from the World Bank, the partners helped toincorporate the SEWA Gitanjali co-operative, which
trained members on the production and marketingof office products made from recycled paper. Today,
Gitanjali supplies stationery items to Accenture,
IBM, Gift Links, Goldman Sachs, Mindtree, Staples,
Walmart, etc. Gitanjali plans to engage 5,000
waste recyclers as stationery producers by 2020,
providing sustainable livelihoods and incomes forindividuals, families and communities.

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58

4
SECURING CORPORATECOMMITMENT
THROUGH DATA

4. SECURING CORPORATECOMMITMENT
THROUGH DATA
Securing management-level support is a necessary prerequisite to successfully developing andimplementing a gender-responsive procurement strategy. Without this support, the strategy isunlikely to succeed.
The first step toward gaining corporate support isdeveloping a compelling business case. In generalterms, the business case is clear. Gender-responsive
procurement increases profitability, provides accessto new markets, increases supplier availability, and enhances corporate reputation and customer loyalty (SeeBusiness Case, Chapter 1, pp. 24-27). The immediatechallenge rather, is to develop a viable strategy fora gender-responsive procurement programme thataligns with the corporation’s mission and supports itscore business drivers. This requires an understandingof the capabilities and capacity of women-owned
businesses to supply the corporation’s requirements,and how the corporation might be able to unlock
and leverage those capabilities. This requires genderdisaggregated data.
Researchers who study women entrepreneurs often
lament the dearth of gender-disaggregated data. Less
than one-third of countries disaggregate statistics
by sex on informal employment, entrepreneurship(ownership and management of a firm or business)and unpaid work (World Bank, 2016). This lack ofreliable data poses a significant challenge for governments, corporations and other institutions seeking
to improve the economic and social well-being of
women around the globe. The OECD (2012) observed:“One of the main challenges when considering how
to boost female entrepreneurship is the lack of solid,
reliable data.” (p. 17).
By way of example, the IFC found that the lack ofreliable gender-disaggregated data has impeded

its ability to make the business case to financial
institutions on supporting women-owned businessenterprises (IFC, 2014). Commercial banks need morereliable data to better understand the potential ofthis market segment and to develop strategies andfinancial products that cater to the unmet needs ofwomen entrepreneurs, while simultaneously allowing the banks to earn a profit.
Globally, efforts are fortunately underway to fill thegender data gap. Indeed, over the past couple ofdecades, many public and private institutions havedevoted and continue to devote considerable timeand effort to the study of the gender data gap andhow to solve it. For instance, in 2012, the UnitedStates, in partnership with the United Nations,OECD and others, launched the Evidence and Datafor Gender Equality (EDGE) Initiative, which seeks
to push existing efforts to have comparable genderindicators on education, employment, entrepreneurship and assets across countries. The first phase ofthis three-year initiative included: (1) developmentof a database for international data and metadata
compilation covering basic education and employment indicators; (2) development of standards andguidelines for entrepreneurship and assets indicators;and (3) piloting data-collection in several countries.22
The ultimate goal of programmes like EDGE is toprovide policymakers with the data they need tomore fully understand the challenges facing women(and girls) and to develop evidence-based policies andprogrammes addressing those challenges.
22 https://unstats.un.org/unsd/gender/Jordan_Mar2012/
EDGE%20summary%204th%20GFGS.pdf.

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Piacentini (2013) argues that the development ofinternationally-comparable statistics on women’s
entrepreneurship is essential for the following
reasons:
First, the statistics will allow monitoring trends inthe contribution of women to the creation of new
businesses, beyond what is currently possible using
data on self-employment. Solid numbers proving
the potential of women’s entrepreneurship for job
creation are important to keep the policy momentum high. Second, the data can help understandhow the characteristics of women and men
entrepreneurs, such as their human capital andmanagement experience, affect the returns fromentrepreneurship and thus the relationship between entrepreneurial investments and women’s
economic empowerment. Third, the statistics canprovide insights on policy levers of entrepreneurship and on specific policy instruments that canhelp women start and develop their businesses (pp.
1-2).
Like other private and public sector institutions, corporations often lack the data they need to understandand effectively leverage the capabilities of women
entrepreneurs. This chapter explores steps corporations and other stakeholders can take to bridge thegender data gap. These broadly include: collecting
data on women entrepreneurs; consolidating data ina central database; comparing and analysing data on
multiple levels; and then communicating the results
to relevant stakeholders and decision makers.
At the outset, it is important to note that this chapter is not intended to be a comprehensive researchor data-collection manual. Rather, the objective is tointroduce the reader to data-collection generally andto highlight some of the challenges and opportunities
for corporations and others in this area.

A. Defining Objectives
Before data-collection begins, corporations mustclearly define the objectives of their research. All otheraspects of the research, including data-collection andanalysis, will flow from this.
Research objectives will undoubtedly vary bycorporation, depending upon the particularindustry, business strategy, corporate structure andlevel of corporate engagement, among other things.
With this caveat, the following are generic examplesof objectives based on the immediate focus of thischapter, which is to better understand the capabilities
and potential of women-owned businesses in themarket and how to increase their participation incorporate value chains:✓What✓
is the current level of participation of womenowned businesses as suppliers in their corporate
value chain?
✓What✓
are the capabilities and capacity of womenowned businesses to participate in their corporate
value chain?
✓How✓will the corporation benefit from increased
participation by women-owned businesses in theirvalue chain?
✓What✓barriers are preventing women-owned
businesses from fully participating in their corporate
value chain?
✓What✓
can be done to eliminate the barriers
preventing women-owned businesses from fully
participating in their corporate value chain?
✓What✓goals should be set to increase the levelof participation of women-owned businesses as
suppliers in their corporate value chain over time?
Bear in mind, the immediate goal of this research anddata-collection effort is to gain buy-in from “C-level”
executives and shareholders.

B. Collecting and Standardizing Data
1. Population of Interest

The first step in any data-collection effort is to define
the target population. In this case, it is women-owned
businesses. WBENC and WEConnect International
and their corporate members define a women’s business enterprise as a company that is at least 51 percent owned, managed, and controlled by one or more
women.
Since some countries apply a slightly different
definition, the following formulation appears to be
useful and widely accepted:

corporate guide togender-responsive procurement

61

A woman–owned business is an independent businessthat is at least 51 per cent unconditionally owned andcontrolled by one or more women.
This definition strikes an appropriate balance between
being too broad and too narrow. It is broad enough toencompass firms that are structured and operated ina manner that promotes women’s economic empowerment, and narrow enough to exclude those firms
where there is a higher likelihood of tokenism andfraud, both of which undermine the goals of inclusiveand diverse sourcing (See Defining Women-Owned
Business Enterprises, Chapter 2, pp.40-41). The definition is also designed to exclude firms that are owned

by women but managed and controlled by men;firms that are headed by women, but owned by others; and firms that are reliant on non-women-owned
businesses to operate.
For data-collection purposes, the definition of womenowned business must be operationalized. Operational
definitions or rules provide precise descriptions of
the characteristics that are being measured so thateveryone involved has the same understanding ofwhat is being measured. This ensures data-collection
efforts are standardized and consistent, thereby
allowing for meaningful comparisons across datasets.

Women Owned Business Definition
In this case, the proposed definition of a women-owned business contains several criteria that a businessmust meet in order to qualify as women-owned:••One or more women must unconditionally own at least 51 per cent of the business.
••One or more women must exercise control over both the long-term decision-making and the day-today management and administration of the business operations.
••The business must be operated independently from other non-women-owned businesses.

Each of these criteria must be further operationalized
so that data collectors can consistently and reliably
assess which businesses qualify as women-owned
and therefore should be included in their datasets. Thisis especially important in the current context given

the number and variety of potential ownership andmanagement structures. Fortunately, organizations
such as the US Small Business Administration,
WBENC and WEConnect International have developed
extensive guidance on each of these criteria.

2. Indicators
The next step in the data-collection process is to
identify the types of information or indicatorsthat would help corporations better understandand leverage the capabilities of women-own businesses. These should flow naturally from thecorporation’s research objectives. Here, there arepotential (descriptive) indicators on both the supply
side and buy side. The following are sample indicatorsfor each.

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62

TABLE 1

Sample indicators
Category

Sample Indicators

Supply Side

• Number of women-owned businesses generally• Number of women-owned businesses by industry• Number of women-owned businesses by size
• Per cent of businesses that are women-owned generally• Per cent of businesses that are women-owned by industry• Per cent of businesses that are women-owned by size
• Per cent of suppliers formally committed to the Women Empowerment Principles orgender-responsive procurement

Buy Side• Number of women-owned businesses participating in corporate supply chains generally• Number of women-owned businesses participating in corporate supply chains by industry• Number of women-owned businesses participating in corporate supply chains by size
• Total amount of corporate procurement spend going to women-owned businesses• Percentage of corporate procurement spend going to women-owned businesses

It is very likely that different corporations will havedifferent data requirements depending upon theirindustries and business strategies. For example,
a commercial bank might require more detailed
information on the financing needs of womenowned businesses, while a retailer might require moredetailed information on the number and capacity ofwomen-owned businesses in certain retail sectors.
Notably, the UN Statistical Commission has identified
a minimum set of gender indicators as a guide forthe national production and international compilation of gender statistics. The primary criterion for theselection of these indicators is that they address key
policy concerns of the Beijing Platform for Action andother international commitments. The agreed indicators include, inter alia: (1) percentage of firms owned
by women, by size; (2) proportion of population
with access to credit, by sex; and (3) proportion of
adult population owning land, by sex. However, theCommission points out that as of yet there are nointernational standards for these indicators, nor are
they regularly produced by countries. Consequently,
they have limited utility at the moment.

C. Data Sources and Collection
Mechanisms
For corporations that have defined their data requirements, the process of actually finding or collecting
the required data could be challenging. As alluded toearlier, the number of existing sources with genderdisaggregated data on women entrepreneurs islimited, and types of data from those sources may
be inadequate for general use. The alternative isfor corporations and other stakeholders to collect,consolidate, and share their own data on womenowned businesses.
According to the President of the International
Development and Research Centre (IDRC), Jean Lebel,“Putting an end to inequality hinges on, in part,
access to employment or business opportunities forthe world’s poorest, but achieving this goal is one of
the biggest policy challenges facing governments,
corporations and civil society leaders.” One of Lebel’s
top recommendations is to help women register
their businesses with organizations like WEConnect
International to improve their market access. Since
2015, IDRC has been working with WEConnect
International in support of growing women-owned

corporate guide togender-responsive procurement63businesses by building on private sector initiatives tocollect and share data on women business owners.
WEConnect International currently collects annual
data from women business owners on their products
and services, annual revenue, employment, markets
served, etc. The aggregate research findings are clear:businesses owned by women with a WEConnect
International certification in India and Latin America
and the Caribbean are growth-oriented, generally
have access to finance, generate millions of dollars inrevenue, and employ thousands of people.23

1. Existing (Secondary) Data Sources
As part of the EDGE Initiative, Piacentini (2013) recently
conducted a review of existing data sources to ascertain whether and to what extent those sources provide
useful and internationally comparable data on women
entrepreneurs. At the outset, Piacentini acknowledges
that the definition of women entrepreneurs adopted
by EDGE—or indeed any organization—will havecritical implications for the content and utility of
the collected data: “Different operational rules in thedefinition, in particular in relation to employment
size and legal type of businesses considered, will havenon-marginal effects on the measure of gender gaps.”(2013, p. 4).
With this caveat in mind, the following is a brief
discussion of some of the existing data sources
reviewed by Piacentini:a) Labor Force Surveys
Statistics on self-employment are commonlyused to measure entrepreneurial activity and arevery relevant to studying gender differences inentrepreneurship. Labor force surveys include fairly
standardized questions on the characteristics of
the working population that can be used to develop
descriptive evidence on age, tenure in businessownership, education and hours worked. For firms
owned by the self-employed, the surveys also capture
information regarding the size and industry of thebusiness unit.
It is important to note that there are significant limitations to the types of data captured by labor force
surveys. Most notably, the term “self-employment”
23 h t t p s : / / w w w . w e f o r u m . o r g / a g e n d a / 2 0 1 7 / 0 1 /women-worldwide-are-missing-out-this-is-how-we-canmake-economic-growth-equal-for-all.

encompasses at least three distinct categories ofworkers: enterprise owners; “free professionals”(e.g., lawyers, doctors, pharmacists, etc.); and craft
workers, traders and farmers. Entrepreneurs are well
represented in the first category but not in the others.
Consequently, there is only a partial overlap between
entrepreneurs and self-employed. Because of this,Piacentini warns that self-employment data should
be interpreted with caution.
Piacentini also points out problems withcross-national comparisons of self-employment data.
Some countries, such as Japan, New Zealand, Norway
and the United States, do not include “self-employed”
owners of incorporated businesses in their official
reports, while other countries do.

b) Surveys of Micro-Business Owners
Like labor force surveys, surveys of micro-businessowners capture household-level data. These surveys
yield relevant information regarding genderdifferences in entrepreneurship, but they have limited
utility for corporations seeking to engage womenowned businesses in the formal sector. This is because
they have typically been used in emerging and developing economies to produce estimates of the sizeand economic performance of micro-businesses that
operate primarily in the informal sector.

c) Surveys of Entrepreneurial Activity
A number of research consortia and private researchcompanies conduct surveys of entrepreneurship attitudes and activities. These population-based surveys
generally use randomized telephone interviews, augmented by expert assessments on the entrepreneurial
framework conditions. The best known and most often cited of these are the Gender Entrepreneurship
Monitor (GEM) and the Eurobarometer.
GEM, for example, provides important national andregional-level information on female entrepreneurshiprates and gender gaps in the following key areas:✓Participation✓
at multiple phases of activity✓Characteristics✓
entrepreneurs

andmotivations

of

women

✓Societal✓
attitudes about entrepreneurship✓Impact✓
indicators among entrepreneurs

corporate guide togender-responsive procurement64According to Piacentini (2013, p. 10), “both [GEM andthe Eurobarometer] are a relevant source of contextual
information on determinants of gender differencesin entrepreneurship, providing information on
hard-to-measure topics such as subject perceptions

on the feasibility of entrepreneurship and risk
tolerance, cultural attitudes towards entrepreneurship and availability of formal and informal support
institutions.”

BOX 16

Rede Mulher Empreendedora
Rede Mulher Empreendedora is a network ofBrazilian female entrepreneurs founded in 2010. The
goal of RME, as it is known, is to empower female
entrepreneurs to gain financial independence anddecision-making skills for their own businesses
and lives. Today, more than 260,000 entrepreneurs
have registered with RME.
In 2016, RME conducted a first-of-its-kind national
survey of women entrepreneurs in Brazil in order tobetter understand and collaborate more effectively
with its constituency. The national survey, which
comprised 1,376 respondents, covered a wide
range of topics, including social support networks,
business profiles, finances, entrepreneurship,skills and attitudes, and training, information andnetworking. It resulted in the following findings,
among others:••While women were generally responsible formost or all of the chores at home, those fromthe lower middle class had less help with chores
than those from the middle class.
••Women entrepreneurs were concentrated inservices (59%) and trade (31%) – but the higher
the class, the more focus there was on services.

••A majority of women (55%) did not have business
partners.
••Most entrepreneurs (73%) posted informationand content about their services or products on
Facebook, and to a lesser degree on Instagram.
••About half of the women entrepreneurs workedout of their homes while slightly over a third
worked out of a company office.
••Most women (60%) stated they would invest
more in their companies if they had access tobetter credit with lower rates.
••Half of the women stated they needed additional
financing for their companies but were afraid of
incurring debt.
••Two-thirds of the women surveyed attended
networking events, lectures and meetings forentrepreneurs with the primary goal of gaining
knowledge for business.
••Respondents indicated they would like to further
develop their business skills and knowledge
primarily in the areas of planning, pricing, sales,
negotiations, marketing and communications.
••The majority of women surveyed had highexpectations for their businesses over the next
three years.

Source: RME (2016).

d) Firm-level Surveys
Firm-level data are more suited to the analysis ofdifferences in the performance of businesses owned
by men and women, than are population-based data.
To that end, firm-level surveys collect data on indicators of significant interest to corporations, such as
productivity rates, access and use of credit, export andparticipation in value chains. Unfortunately, very few
firm-level surveys capture demographic informationon the owners of the firms (Piacentini, 2013). As aresult, there is a lack of gender-disaggregated data on
firms.
Firm-level data has other drawbacks as well. Most
notably, Piacentini found that there is not a common

corporate guide togender-responsive procurement65international framework for the design of businesssurveys, which makes meaningful comparisons ofdatasets more difficult. Among other things, thesesurveys often focus on small and medium sizedenterprises, but use different size standards. In
addition, they often focus on disparate categories ofenterprises.

This is not to say that firm-level surveys should be
ignored. It simply means that policymakers andresearchers should be aware of their limitations. In
many cases, these surveys do produce data that allow
for the analysis of gender differences in businessownership and performance.
According to Piacentini, for example, the Enterprise
Surveys of the World Bank represent a promisingframework for the collection of firm-level data on
characteristics and performance of businesses owned
by men and women at the global level. At the national
level, several OECD countries regularly conduct
surveys that produce gender-disaggregated data.
They include the Survey of Business Owners in the
United States and the French Information System on
New Enterprises (SINE) survey in France.

e) Business Registers
Business registers represent a potentially importantsource of gender indicators on businesses, but there
are significant obstacles to overcome first. Most
notably, these registers do not generally include
information on the individuals who own or manage
the businesses. It is possible, in some circumstances,to link the information in business registers to dataon individuals in other registers (e.g. tax register),but this poses its own practical and technologicalchallenges. In addition, business registers do not exist
or are still under development in many countries(Piacentini, 2013).
Dun & Bradstreet (D&B) offers Supplier Diversity Data
Services—the largest supplier diversity database in
the United States and increasingly global—to help
corporations identify diverse suppliers and manage
the data on those suppliers. Corporations use theinformation to determine how diverse a portfolio is,review spend with diverse suppliers, find other diverse
suppliers that meet requirements, and ensure that

corporations are meeting corporate, federal, state andTier 2 requirements. 24

2. Corporate Data-Collection
While there are many existing sources of genderdisaggregated business data, the quality, availability
and utility of that data may not meet the immediateneeds of corporations seeking to understand andleverage women-owned businesses in their value
chains. Corporations, both individually and collectively,
are well positioned to collect information on business ownership and performance through their
supplier databases. As with official business registers,“[t]he incorporation of basic ownership informationin [corporate] registers would generate a sustainable
information base to monitor the level and economic
value of women’s participation in entrepreneurship.”(Piacentini, 2013, p.15).
Corporations, of course, are not limited to gathering
secondary research or relying on the informationin their own supplier databases. Depending on theavailability of resources, they can conduct or haveothers conduct primary research related to theirdefined objectives. One of the primary benefits of thisapproach is that it gives corporations greater control
over the research methodology and types of datacollected, which in turn affects the external validityof the research results. For example, results fromrandomized surveys have greater external validity
than results from non-randomized surveys, meaning
the former results can be used to make predictions
about the target population (i.e. generalization).

D. Capturing and Providing Access to Data
in a Central Database
Ideally, gender indicators collected by corporationsor through existing data sources would be consolidated in a central database and made available to all
stakeholders. Achieving this will require, in the first
instance, a standardized or common framework forthe collection and reporting of gender-sensitive dataon business ownership and performance, addressing
24 http://www.dnb.com/content/dam/english/dnb-solutions/
supply-management/supplier_diversity_data_services.pdf.

corporate guide togender-responsive procurement66many of the issues raised in the previous discussions.
For example:✓What✓is the definition of a women-owned business?
✓What✓
are the size standards applicable to small,medium and large businesses?
✓What✓
are the applicable industrial classifications?
✓Which✓gender indicators should be measured, andhow are they defined?
While standardization appears to be a daunting
task, particularly at the international level, there
are concrete steps that corporations and businessorganizations are taking towards achieving that goal.
Individually, corporations can include basic ownership
information into their own supplier databasesand encourage their subsidiaries, suppliers, andcustomers to do the same. At the same time, businessorganizations and industry groups can continue toadvocate for the use of a standardized data-collection
framework among their members.25
Several corporate networks, including those
represented by WEConnect International and WBENC,
have adopted comparable definitions and criteria for
women-owned businesses, and have collected andcompiled valuable information on them and made thisavailable as searchable online databases of women
suppliers. These networks are also well positioned
to advocate for standardization and consolidation ofdata among their members, which include hundredsof large domestic and multinational corporations,representing trillions of dollars in purchasing power,
as well as thousands of certified and self-registered
women-owned businesses.

E. Comparing and Analyzing Data acrossCountries, Industries, and Companies
Analysis of the primary and/or secondary research
information should, of course, be focused on
answering the defined research objectives. This may
entail a simple desktop review of population-based
or firm-level surveys (e.g. Gender Entrepreneurship
Monitor or the World Bank Enterprise Survey) or astatistical analysis of randomized survey data. The

scope, depth and method of analysis will largely
depend on the research methodology used and theobjectives of the organization.
It is important to note that comparisons of data
across countries, industries and companies will likely
be imperfect due to the lack of standardized collection
frameworks.
For example, the World Bank Enterprise Surveys,
the US Survey of Business Owners, and the French
Information System on New Enterprises (SINE) eachcollect gender data on business ownership, but they
do not have a common definition of what constitutes
a women-owned business. Indeed, only the US Surveyof Business Owners actually incorporates criteria for
women-owned businesses. For the other firm-level
surveys, ownership must be inferred from other datain the surveys. As a result, care must be taken whenanalyzing and interpreting this type of data.

F. Communicating the Results of Data
Analyses
The ultimate goal of the data-collection effort isto secure support from corporate management
and other key stakeholders for a gender-responsive
procurement programme. To that end, the communication strategy should address the objectives of the
programme, describe how the programme aligns withcore business drivers, identify potential business opportunities with women-owned suppliers in relevantmarkets, and highlight other potential benefits to thecompany from engaging women-owned businesses
in the supply chain.
In 2014, for example, Sodexo headquartered in
France committed to purchasing globally $1 billion
in products and services over three years from micro,
small, and medium sized enterprises, especially those
owned and operated by women. By 2017, the commitment is expected to benefit as many as 5,000 small
businesses in 40 countries, including 1,500 womenowned and operated businesses and more than amillion people.26
26 http://sodexoinsights.com/wp-content/uploads/2016/04/
CGICaseStudy_web.pdf..

25 Domestic law may limit the types of data that may becollected.

corporate guide togender-responsive procurement

67

5
BUILDING CORPORATECAPACITY AND
COMMITMENT

5. BUILDING CORPORATECAPACITY AND
COMMITMENT
This chapter outlines the components of a successful strategy for developing, implementing
and tracking gender-responsive procurement programmes. These programmes will draw upon
the corporation’s understanding of the barriers facing women-owned businesses in its industry(Chapter 1); the capabilities and capacity of those businesses to participate in the corporate
supply chain (Chapter 2); techniques for making the supply chain more accessible to womenowned businesses (Chapter 3); and the business case for their inclusion (Chapter 4). The end
game is to reach a stage where gender-responsive procurement has become an integral part ofthe corporate culture and practice.

I. Programme Maturity Levels
Washington (2004) proposed a three-stage model for evaluating the maturity of supplier diversity initiatives anddeveloping future strategies for them:

STAGE
ONE

STAGE
TWO

STAGE
THREE

Companies in Stage One are generally in a reactionary mode and do nothave comprehensive strategies for developing, implementing and tracking
supplier diversity. While there is a desire to promote supplier diversity anddevelop some sort of plan for that purpose, the companies have not madea commitment to dedicate the resources needed to ensure its success. Manycompanies in Stage One participate in and support advocacy group activities
for public relations purposes, but they are not working towards producing
tangible process deliverables. Washington observes that most Fortune 1000
companies do not have supplier diversity programmes and those that do,barely qualify as Stage One.

Companies in Stage Two generally have a comprehensive plan for supplier
diversity and have appointed a key manager who is accountable for its
implementation. The companies have installed tracking and management
systems, are conducting recurring spend analyses, and identifying supply
chain opportunities and comprehensive sourcing activities. They are also
looking for opportunities to elevate diverse firms to preferred supplier status.
However, at this stage of maturity, supplier diversity is still largely a centralized
programme. It has not yet become an integral part of the company.

The few companies that have reached this stage have developed, implemented
and managed a comprehensive plan and execution strategy, monitored andevaluated progress towards goals, and made adjustments where necessary, allas part of their day-to-day activities and requirements. At this stage, supplier
diversity has become an integral part of the corporate culture and practice.

corporate guide togender-responsive procurement

70

The three-stage model proposed by Washington not
only provides a useful means of gauging the maturityof supplier diversity programmes, it also provides
companies with valuable insights as to why theirown programmes may not be delivering the expected
returns on investment and what adjustments need tobe made going forward.27
Supplier diversity and inclusion strategies andplans will vary by corporation depending on anumber of factors, including the maturity level ofcurrent programmes, industries, business models andstrategies. Each must be tailored to the needs andgoals of the company. To that end, it is important forcorporations to empower their supplier diversity andinclusion program managers to fully engage withcorporate leadership, front-line managers, buyers,
and other stakeholders to ensure gender-responsive
procurement becomes an integral part of thecorporation’s business activities and mindset.

Best Practice Guidelines
Goal 1: Establish Corporate Policy and Top Corporate Management Support
Goal 2: Develop a Corporate Supplier Development Plan for Women-Owned Businesses
Goal 3: Establish Comprehensive Internal and External Communications
Goal 4: Identify Opportunities for Women-Owned Businesses in Strategic Sourcing and Supply Chain
Management
Goal 5: Establish Comprehensive Supplier Development Process
Goal 6: Establish Tracking, Reporting and Goal Setting Mechanisms
Goal 7: Establish a Continuous Improvement Plan
Goal 8: Establish a Second-Tier Programme
Adapted from NSMDC standards

II. Best Practice Guidelines
A number of leading business associations in supplier
diversity and inclusion programmes have developed
best practice guidelines and tools to assist corporations
to establish and/or mature their own programmes.
Globally, WEConnect International has developed
the “Gold Standard Checklist,” a self-assessment tool
to help multinational corporations and multilateralorganizations assess their global supplier diversity andinclusion programmes and identify potential areas
for improvement.28 The checklist covers five areas:
27 See also, the RGMA Five Levels of Corporate Supplier Diversity
Development for benchmarking the maturity of supplier
diversity programmes. The Five Levels include:
28 h t t p s : / / w e c o n n e c t i n t e r n a t i o n a l . o r g / i m a g e s /supplier-inclusion/GoldStandard_Checklist_v1.pdf..
29 http://www.ifc.org/wps/wcm/connect/3dbbf98a-f919-408ebca0-700e4c5efecd/SheWorks+Final+Report.
pdf?MOD=AJPERES..

(a) policy assessment; (b) planning; (c) processes andstandards; (d) measurement, tracking, and reporting;and (e) accountability. Each item on the checklist isscored.29 The goal for any multinational corporation
or multilateral organization dedicated to supplier diversity and inclusion is to reach 100 points: the Gold
Standard.
•• Level Zero: No programme•• Level 1: Beginning programme•• Level 2: Basic programme•• Level 3: Traditional programme•• Level 4: Advanced programme•• Level 5: World class programme
National Women’s Business Council (2015). Research on Women’sParticipation in Corporate Supplier Diversity Programs.

corporate guide togender-responsive procurement71Within the United States, the National Minority
Supplier Development Council (NMSDC), in
collaboration with its corporate partners, also has acommon set of standards to guide corporations in
the development and assessment of supplier diversity programmes. They comprise building blocks, tasks,
practices and processes that NMSDC’s corporate
partners have identified as necessary to an effective
programme. With the permission of NMSDC, thosestandards have been adapted to gender-responsive
procurement.

A. Goal 1: Establish Corporate Policy and
Top Corporate Management Support

gender-responsive procurement and measures
success.
3. The CEO has issued a gender-responsive procurement policy that articulates the rationale
supporting the initiative. The CEO ensures that thispolicy is communicated to staff and implemented.
4. The policy belongs in procurement for most companies and business models, but in all cases it should
be a part of the corporation’s umbrella Diversity
Strategy.
5. The CEO has appointed appropriate full-time staff
and resources to ensure a successful gender-procurement programme.

Rationale: Corporate executive management definesand documents its gender-responsive policy, including
annual performance goals, accountability andreporting of women-owned business participation,and its commitment to increasing women-owned
business participation.

6. There is an executive advisory council/committee
composed of key stakeholders to drive the programme’s progress.

Measures of Success:8. All levels of management are accountable for gender-responsive procurement.

1. The corporate governance body has established agender-responsive procurement programme as apolicy of the corporation.
2. There is a written corporate policy that clearlydeﬁnes executive management commitment to

7. Management directs that gender-responsive
procurement be incorporated into the businessplanning cycle.

9. Women-owned business utilization/metrics areincluded in annual performance goals for the corporation and for each business unit/division of theﬁrm.

BOX 17

Gender-responsive Procurement Must be an Essential Component of the Business Strategy
To be effective, the gender-responsive procurement
policy must be supported by a clearly articulated
business case based on the company’s corebusiness drivers. It must provide resources for the
procurement programme, and it must enforce

B. Goal 2: Develop a Corporate Supplier
Development Plan for Women-Owned
Businesses
Rationale:The
corporate
gender-responsive
procurement plan acts as a means of ensuring that
there is a corporate-wide commitment to supplier
diversity. This includes establishing supplier diversity

accountability. Front-line managers will only buy
into a gender-responsive procurement programme
if it is seen as an essential part of the corporation’s
mission and business strategy (Foster School ofBusiness, 2009).
improvement plans with internal customers andcross-functional organizations.
Measures of Success:1. The plan is supported by a clearly-stated businesscase based on value to the corporation.
2. The corporate plan is reviewed by senior executive
management on a regular basis.

corporate guide togender-responsive procurement723. The corporation has an effective, active cross-functional steering committee for gender-responsive
procurement.

2. Gender-responsive procurement information isdisseminated to internal stakeholders on a regularbasis.

4. The plan includes methodology to identify and develop women-owned suppliers.

3. Gender-responsive procurement information is included in new employee orientation.

5. Input from women-owned supplier groups is included in the supplier development process.

4. On-going and specialized
procurement education is
procurement personnel.

6. The procurement programme promotes the inclusion of certiﬁed women-owned suppliers in all
aspects of corporate procurement.
7. Controls, processes, materials, personnel and resources needed to achieve programme performance
are identiﬁed and/or acquired.
8. The plan includes implementation of roles and responsibilities in supplier development in business
units other than procurement.
9. A tool kit/language regarding gender-responsive
procurement is developed for salespeople to use increating and negotiating contracts.
10. Employee reviews (of stakeholders, budget holders,etc.) are tied to performance in developing genderresponsive procurement cross-functionally.
11.Gender-responsive procurement is integrated into
all aspects of corporate business planning and ispart of the “corporate DNA”.
12. Supplier diversity management has a good understanding of the company’s core operations.

C. Goal 3: Establish Comprehensive
Internal and External Communications
Rationale: The procurement staff has establishedand maintains methods for communications about
supplier development planning, execution andaccomplishments.
Measures of Success:1. Company-wide awareness of initiative is promoted via multiple vehicles, for example, annual
report, brochures, newsletters, prominent website
placements, etc.

gender-responsive
provided to all

5. On-going and specialized gender-responsive procurement training is provided to other business
units.
6. The company encourages women-owned businesses
to seek certification and external training.
7. Supplier selection criteria and procurement processes are explained to suppliers.
8. Suppliers who are not successful in winning bids areprovided feedback so that they can understand how
to be more competitive.
9. The largest women business enterprise suppliers
are well versed on corporate procurement goals andobjectives.
10. The corporation has an effective process to respondto prospective suppliers.
11.Company representatives actively participate inrelevant certification organizations or comparable
networks.
12. Articles and advertisements are placed in businessmedia to help identify potential women-owned
suppliers.
13. Company representatives participate in trade
fairs, etc., including regional level participation andsupport, with objectives and a method to measureoutcomes.
14. Gender-responsive procurement results are
published in the corporate annual report and/or
corporate sustainability report.

corporate guide togender-responsive procurement73BOX 18

Communicating with Potential Suppliers
Walmart is at the forefront of global supplier
diversity and inclusion efforts, having developedand implemented a world-class supplier diversity
programme. As part of this programme, Walmart
has established a comprehensive internal andexternal communication strategy to promote its
commitment to and progress toward supplier
diversity goals, and to encourage diverse businesses
to register with the company. By way of example,
the following is an excerpt from the Walmart’s
Supplier Diversity Portal:
Become a Diverse SupplierAs the world’s largest retailer, Walmart strives tosave people money so they can live better. This
mantra is at the core of every decision we make.
One way we fulfill this commitment is to embrace
diversity in all aspects of our organization; fromour talented associates to the supplier partners wework with to deliver the products and services ourcustomers want and need.
An important aspect of meeting these needs acrossWalmart is our Supplier Diversity Programme.
This programme provides companies owned andoperated by minorities, women, veterans andpeople with disabilities equal footing to effectively
work with us while at the same time, growing theirown business.

••In FYE16, we spent approximately $14.7 billion
with women and minority-owned businesses.
This includes $12.1 billion in direct spending and$2.6 billion in second-tier spending.
••Walmart has pledged to use its global size andscale to empower women across our supply
chain. Read more about our Women’s Economic
Empowerment Initiative.
••We partner with leading organizations in businessdiversity to continually identify and reachpotential suppliers. These partnerships include
the National Minority Supplier Development
Council (NMSDC), Women’s Business Enterprise
National Council (WBENC), U.S. Pan Asian
American Chamber of Commerce (USPAACC),
and USLBN Disability Supplier Diversity Program(DSDP), and WEConnect International.  
By working with diverse suppliers, we provide
opportunities for significant growth anddevelopment to diverse businesses. We offer abroader assortment of products to our customers
at prices they can afford, and we contribute to theeconomic well-being of the communities we serve.
We’re always looking for diverse suppliers that canhelp us bring our customers products relevant tothem, at prices they can afford.

Source: http://corporate.walmart.com/suppliers/supplier-diversity.

D. Goal 4: Identify Opportunities for
Women-Owned Businesses in Strategic
Sourcing and Supply Chain Management
Rationale: Analysis of total corporate spend(by business unit/department) to determine
opportunities is critical to the success of the corporate
gender-responsive procurement process. Supplier
diversity staff has established and maintains
methods for soliciting women-owned businesses,
and considering business units and ﬁrst-tier suppliers.
Supplier diversity staff has established and maintains

methods for identifying, recruiting and developing
women-owned businesses.
Measures of Success:1. Gender-responsive procurement is formally
integrated into the corporation’s strategic sourcing
process.
2. Gender-responsive procurement is incorporated
into the corporation’s formal procurement policy
with accountability.

corporate guide togender-responsive procurement74

3. Supplier diversity has targeted long-term, “big hit”
opportunity areas.
4. There are one or more strategic “big hits” with awomen-owned business currently in place in eachplanning cycle.
5. Women-owned businesses are significantly
integrated in all product/service/commodity areasof spend, including nontraditional areas of spend.
6. A process is in place to review the expiration datesof all existing contracts:a. With suppliers to maintain continuity.
b. To find new opportunities for suppliers.
7. The corporation has a process in place, which the
supplier diversity team is aware of, for setting
minimum targets as well as tracking new RFPs/
RFIs/RFQs, to ensure the inclusion of women-owned
businesses in the development process.
8. RFPs/RFIs/RFQs have standard language in place toidentify women-owned businesses and the supplierselection process sets minimum targets for womenowned business supplier inclusion and selection.

9. A process exists that will review the outcomes of
the RFP /RFI /RFQ process, for monitoring inclusion
and utilization of women-owned businesses.
10. There is cooperation with other corporations
to share top performing suppliers via relevant
certification networks, industry groups, centers of
excellence, and the like.
11.Women-owned businesses are developed forpotential utilization in underutilized product/service
commodity areas.
12. The supplier development team ensures thescreening process is fair and within acceptableguidelines.
13. The supplier development team will clearly
define and communicate the registration process
throughout all corporate business units, as well aswith women-owned supplier groups.
14. The corporation reviews procurement policies
and practices to eliminate barriers impeding
participation by women-owned businesses.

BOX 19Citi – Innovative Ideas for Promoting Supplier Diversity in the Supply Chain
Citi has implemented a number of innovative ideas
to help ensure professional service opportunities
continue to expand for diverse suppliers, andto increase its visibility to those suppliers. They
include, but are not limited to, the following:••Non-Traditional Purchasing or Sourcing - Citi
seeks areas within the company that may haveopportunities to increase diversity and education
participation (i.e., accounting, legal, professional
consulting, financial management) and pursues
proactive methods of inclusion.
••Capacity Building - Citi hosts an annual “Doing
Business” workshop to review with suppliers
and potential suppliers what is required to beconsidered for business opportunities with Citi.
••Collaboration - Each year, Citi holds a joint
breakfast and information session for diverse
Broker Dealers. The intent of the event is toensure educational advancement, provide intellectual insight to those supporting Citi inthe Broker Dealer space or interested in doing
so, and where possible, to identify new business opportunities. The breakfast is hosted by
Citi’s Enterprise Supply Chain (ESC) and CapitalMarkets Origination (CMO) and attended by representatives from both those groups as well as
municipalities, Treasury and others.
••Second-Tier Purchasing/Contracting - Citi strongly
encourages or requires its prime suppliers todevelop a programme to award a percentage
of Citi’s subcontracting opportunities to diverse
business enterprises.
••Champions’ Network/Goal Development Champions meet monthly with Citi’s Supplier
Diversity and Sustainability team to review andevaluate progress based on the goals submitted,
the “line of sight” developed by each category, andcorporate guide togender-responsive procurement

75the potential for utilization of qualified suppliers.
Global Plans follow a similar format. Regional
champions in Asia, Latin America, Canada, andEurope, the Middle East and Africa (EMEA) must
identify reasonable goals that can be met by the

E. Goal 5: Establish Comprehensive
Supplier Development Process

2. Training of all types provided to women-owned
businesses such as:

Rationale: Procurement has established, maintains,and continuously improves methods for preparing
women-owned businesses for global competitivenessand sourcing trends such as supplier rationalization,
through assistance in all aspects of capacity building.
Measures of Success:1. Mentor programme
including:establishedandcategory managers. The goals, however, focus
not only on supplier diversity and inclusion, butalso on development and sustainability.

active,a. Relationship building for sustainability andstrengthening of mutual trust.
b. One-to-one coaching – executive relationships
with similar functions, finance-to-finance, etc.
c. Assistance with business process improvement
and redesign, using lean thinking and lean manufacturing processes.

a. Supplier training on corporate objectives, culture
and supply chain trends.
b. “Universities” or formal learning programmes.
c. Internal training for all suppliers (Six Sigma,
quality, safety, effective communications,
negotiations, etc.).
d. Support of women-owned business training at alllevels.
e. Provide
scholarships
businesses.

towomen-owned

3. Capacity building initiatives such as:a. Establishing joint ventures, and valid strategic
partnerships.
b. Facilitating mergers and acquisitions.
c. Providing technical assistance, e.g., marketing,management, accounting, international trade operations, production, financial, and the like.

BOX 20Best Practice in Supplier Development
Accelerate 20/20: Small Business Accelerator
Program.

feedback from each other and share best practice.
(http://nynjmsdc.org/programs/)

The New York and New Jersey Minority Supplier
Development Council, in conjunction withsponsors like Prudential, Time Warner, and Citi,
has established a 7-month programme in the
New York/New Jersey area where corporations
serve as executive coaches for women-owned
and other small businesses. The programme uses
an award winning executive training curriculum
designed for existing small business owners who
are ready to grow their business, increase profitability and strengthen their impact in the local
economy. Accelerate 20/20 is a truly collaborative
effort—corporations work with one another to get

WPEO Brown Bag Lunch Development Series.
The Women Presidents’ Educational Organization(WPEO) is a U.S. non-profit community of womenowned businesses. The group sponsors a series ofbrown bag lunches for women business owners
wherein corporate leaders provide talks on various
topics of interest. For example, a representativefrom Citi’s sourcing team recently presented aworkshop on sustainability, while representatives from Morgan Stanley provided a workshop
on how to navigate its procurement process.
(http://wpeo.us/about-us/overview/)

corporate guide togender-responsive procurement76

F. Goal 6: Establish Tracking, Reporting and
Goal-Setting Mechanisms
Rationale: The establishment of aggressive goals forgender-responsive procurement spending, tracking
those goals, and communicating results and goal
achievement provides accountability and recognition.
These payment dollars flow from Accounts Payable.
Measures of Success:1. There is an established minority supplier tracking
system to enable results reporting (ability to track
women-owned business spend by business unit/
department, buyer, commodity, geographical area,
cost reduction dollars, etc).
2. Women-owned cost savings/cost reduction contributions are tracked.
3. Supplier utilization records are prepared to identify current women-owned businesses in the supply
chain.
4. There are clearly stated goals for participation by
women-owned businesses; for example, year overyear percentage increase, dollar amount and percentage of spend and utilization, etc. Performance
results are measured against these establishedgoals, which are reviewed and recalibrated on aregular basis. There is a person responsible for reporting the results.
5. Key metrics for gender-responsive procurement are
reviewed regularly by the senior corporate management team, chief executive officer, chief financial
officer, etc.
6. Scorecards are created to measure performance.
7. Achievement of goals is tied to performance reviews.
8. Quality reporting systems provide accurate spending on at least a quarterly basis.
9. Gender-responsive procurement spending andgoal achievement are tied to market access, revenue generation and customer and consumer
satisfaction. This ensures continued support for the
programme horizontally and vertically throughout
the organization.

BOX 21

Setting SMART Goals
One of the more important elements of an effective
gender-responsive procurement programme isgoal setting. This is important for encouraging
implementation of the corporate strategy, tracking
progress, and ensuring accountability. Corporate
strategies should contain SMART – Specific,
Measurable, Actionable, Realistic, and Time-bound– goals to increase the likelihood of sustained
success and usage throughout the organization(Foster School of Business, 2009). For example,
SMART goals for a gender-responsive procurement
programme that applies to all suppliers, regardlessof their country of origin, might include:••Increasing the percentage of corporate
procurement spend received by women-owned
businesses by ten per cent per annum over the
next five years.
••Establishing a goal for participation by womenowned businesses in the supply chain of atleast five per cent of the value of all prime andsubcontracts awarded for each fiscal year.
••Identifying at least five new opportunities toengage women-owned businesses each fiscal
quarter, and engaging at least one.

G. Goal 7: Establish a Continuous Improvement Plan
Rationale:The
corporate
gender-responsive
procurement programme needs to be fine-tuned on aregular basis to follow changes in corporate objectives

and growth (including growth by acquisition
managers).

corporate guide togender-responsive procurement77Measure of Success:1. The corporation has established and maintains
documented procedures for planning and implementing internal gender-responsive procurement
audits to verify whether activities and related results comply with the programme.
2. Surveys are conducted with key stakeholders internally to ensure the programme is exceeding
customer expectations.
3. A process exists for ongoing communication
between the corporation and women-owned businesses to assist and fine-tune the performanceof contracts, through vehicles such as surveys

conducted with women-owned businesses to determine areas for continuous improvement.
4. The corporation participates in benchmarking withother corporations to identify best practices andthen plan for their systematic adoption.
5. An overall gender-responsive procurement strategy
is developed, including multi-year plans tied to corporation values and aligned with overall corporate
strategy and functional department strategies,
especially procurement strategies.
6. The corporation participates in “next practices”
exercises to envision innovative strategies well inadvance of the need for those practices.

BOX 22

Benchmarking
Increasingly, organizations are turning to
self-assessments and other benchmarking tools
to gauge the effectiveness of their business
operations and programmes. Benchmarking is
the process of comparing key metrics or businesspractices for one’s own company to those ofindustry leaders or industry best practices. The
objectives of benchmarking are (1) to determine
what and where improvements are called for; (2)to analyze how other organizations achieve theirhigh performance levels; and (3) to use this information to improve performance.30
Benchmarking is an important tool for assessing
the effectiveness of supplier diversity programmes,
including those geared toward womenowned businesses. For example, WEConnect
International offers the Gold Standard Checklist,a self-assessment tool to help corporations andmultilateral organizations assess their global
supplier diversity and inclusion programmes
and identify potential areas for improvement,
especially as it relates to sourcing from womenowned businesses globally.31
Likewise, the Minority Supplier Development
Council UK (MSDUK) is in the process of developing
an online Supplier Diversity Benchmarking

30 h t t p : / / w w w. b u s i n e s s d i c t i o n a r y. c o m /d e f i n i t i o n /benchmarking.html.

Tool, which will enable organizations to assess
the effectiveness of their supplier diversity
programmes and measure ROI. This is being donein partnership with Accenture and CVM Solutions.
Other organizations, such as Calvert Investments,
use benchmarking tools to evaluate and rank companies against international best practice. Calvert
assigns scores to companies in the Standards& Poor 100 based on their performance on ten
diversity indicators or benchmarks. This allows
Calvert to quantify the degree to which each company demonstrates best practices across all ten
indicators (Calvert, 2015).
In South America, Itaipu Binacional has developed
a similar benchmarking tool for evaluating thedegree to which its suppliers and other companies
demonstrate best practices under the Women’s
Empowerment Principles (WEPs). Itaipu Binacional,
which is a joint venture between Brazil andParaguay, is the largest generator of hydropowerin the world. In 2003, sustainability became aformal part of the company’s mission, incorporating the concept of social and environmental
responsibility into its overarching mission of power
generation. Since that time, Itaipu has started theGender Equality Incentive Programme in hopes ofencouraging its suppliers, institutions, and other

31 h t t p s : / / w e c o n n e c t i n t e r n a t i o n a l . o r g / i m a g e s /supplier-inclusion/GoldStandard_Checklist_v1.pdf.
corporate guide togender-responsive procurement

78

Brazilian organizations to apply gender equality
in their management. Itaipu’s CEO also signed adeclaration of support for the WEPs. In 2012, Itaipu
was recognized by UN Women and the UN Global
Compact as a benchmark company for WEPs
(Itaipu Binacional, n.d.).

H. Goal 8: Establish a Second-Tier
Programme
Rationale: A comprehensive second-tier programme
creates a significant multiplier effect, by encouraging
the continual establishment of new gender-sensitive
procurement programmes, which in turn create incremental opportunities for women-owned businesses.
Measures of Success:1. The corporation has established a second-tier programme that includes leadership commitment,
resources, contract language, goal setting, selectionof initial group of first-tier suppliers and commodities, training, reporting and audit, consequences fornot meeting goals, incentives for goal attainmentand recognition.

As part of its commitment to gender equality
and women’s empowerment, Itaipu developed abenchmarking tool for evaluating the degree towhich their suppliers demonstrate best practices
across the seven WEPs. Each year, Itaipu publicly
recognizes those companies that perform the best
across those principles.
2. The goals are reviewed with the first-tier suppliers.
3. There is a formal system in place to measure theperformance of these suppliers against goals.
4. There are sanctions and/or remedial action plans if
first-tier suppliers fall short of expectations.
5. Goals should be reasonable, challenging, tailored byindustry and subject to continuous improvement.
6. There are alternative activities, such as implementing business development programmes for
women-owned businesses, for departments andindividuals who do not meet their goals.
7. Corporate processes mirror certification organization guidelines.

BOX 23

Encouraging Participation at all Levels of the Supply Chain
Corporations should encourage or even require
first-tier and lower level suppliers to adopt genderresponsive procurement programmes. Indeed,
women-owned businesses are far more likely toaccess the corporate supply chain at a lower tierbecause the size and complexity of the opportunities at those levels are better suited to micro andsmall businesses. They are also more numerous.
Corporations with well-developed supplier diversity programmes use a variety of techniques toencourage participation at lower tiers of the supply chain. Citigroup Inc. (“Citi”), for example, haspromulgated a Statement of Supplier Principles,
which it shares with its suppliers. The Statement
sets forth the ethical, social and environmental

principles that guide Citi’s global procurement
practices and encourages suppliers to adopt theirown codes or statements of best practices thatincorporate similar principles. To complement its
Statement of Supplier Principles, Citi has begun
using a Corporate Responsibility Questionnaire(CRQ) to assess how well current and potential
suppliers manage governance, environmental
sustainability and supplier diversity. If a supplier’s
CRQ score is low, Citi communicates its concerns tothe supplier and works with them over the ensuing
year to improve their policies and practices (Citi,2015).
Citi piloted the CRQ in Malaysia, Australia, andIreland, and as of August 2015, the CRQ became

corporate guide togender-responsive procurement79

a mandatory part of all electronic requests for
proposals or quotations in North America andLatin America. Citi expects to deploy the CRQ to all
geographical regions by 2018.
Governments too have sought to leverage theirprocurement spend by pushing preferential
procurement policies down the supply chain.
In the United States, for example, federal prime
contractors and subcontractors are required tosubmit small business subcontracting plans whenthe expected value of a contract or subcontract
exceeds $650,000 and there are further opportunities for subcontracting. These plans establish
the contractor’s goals or targets for participation
by various small businesses – including womenowned small businesses – in the federal contract,
or alternatively across the contractor’s entire business. They also set out the contractor’s strategy forachieving these goals and targets. Contractors are
subject to penalties if they do not make a ‘good
faith effort’ to achieve the agreed goals (48 C.F.R.
Subpart 19.7 (United States)).
Subcontracting plans can also be used as anevaluation factor in competitive procurements
where award is based on best value. In this situation, firms are required to submit small businesssubcontracting plans as part of their overall
proposals. These plans are evaluated together withother non-price factors, and the award is made to
the firm whose proposal represents the best overallvalue to the government, taking into account boththe price and non-price factors.
South Africa encourages inclusive sourcing throughits Broad-Based Black Economic Empowerment(B-BBEE) policies.32 Companies that compete forIII. Leveraging Social Investments
Several corporations around the world are making
very specific social investments in women businessowners and their ability to access new markets. Manyof these investments are measurable, verifiable and
32 Broad-Based Black Economic Empowerment Amendment
Act, Act No. 46 of 2013: “ ‘Broad-based black economic
empowerment’ means the viable economic empowermentof all black people [including], in particular women, workers,
youth, people with disabilities and people living in 10 rural
areas.”

business with government departments or public
entities or enterprises are awarded preference
points based on their certified B-BBEE status levels.
Under this system, the maximum number ofpoints that can be awarded to contractors during
source selection is 100 points, of which 80 points(or 90 points for larger procurements) are awarded
based on price and the remaining 20 ‘preference’points (or 10 points for larger procurements) areawarded based on the firm’s certified B-BBEE statuslevel. Thus, firms are incentivized to maximize theirstatus levels.
A firm’s status level is based on its compliancewith the B-BBEE Codes of Good Practice, which areintended to advance economic transformation andpromote economic participation by black people
and other previously disadvantaged communities.
The B-BBEE Codes of Good Practice use a genericscorecard comprised of seven core elements:
ownership, management control, employment
equity, skills development, preferential procurement, enterprise and supplier development, andsocioeconomic development. Thus, for example,
one company might receive the maximum points
under the ownership element because it is ownedby black people while another company might
receive maximum points under the skills development element because it has put in place initiatives
designed to develop the competencies of black
employees and black people, both internally andexternally. In other words, the system encourages
firms to pursue initiatives under these elements toincrease their compliance scores and status levels,and hence the number of preference points theyreceive during source selection (Taylor and Roga,
2009; Quinot, 2013).
trackable over time. They are also often being madein partnership with other corporations, governments
and NGOs through very high profile global platforms.
In 2013, at the Clinton Global Initiative (CGI)
conference, a coalition of corporations and nonprofits came together to make a mega commitment- “Advancing Women-Owned Businesses in New

corporate guide togender-responsive procurement

80Markets”. The first objective was to track and measure
at least US$1.5 billion in combined total new money
spent by commitment-makers on women-owned
businesses based outside the U.S. between 2013 and2018. The actual total spend at the end of 2014 alreadyexceeded US$3 billion. The second objective was toimplement Supplier Readiness initiatives, including
mentoring, that targeted at least 15,000 womenowned businesses based outside the U.S. between
2013 and 2018. The actual total number of womentrained at the end of 2014 has already exceeded
40,000. These results would not have been possible
without the coordinated collaboration of a diverse
set of stakeholders including Accenture, The Boeing
Company, Cherie Blair Foundation, The Coca-Cola
Company, DLA Piper, EY, ExxonMobil, Freeport, Goldman
Sachs, IBM, ICRW, IDB, Intel, Johnson Controls, MarriottInternational, McLarty Global Fellows, Pfizer Inc., RBS,
Rockefeller Foundation, TechnoServe, Thunderbird
School, U.S. Department of State, Vital Voices Global
Partnership, Walmart and WEConnect International.
In September 2016, over 30 partners joined CGI’s “No
Ceilings: The Full Participation Project”, Vital Voices
Global Partnership, and WEConnect International toannounce a new series of commitments that addresssignificant gender gaps and advance the genderequality targets of the UN SDGs. Over the next five
years, the coalition’s collective CGI Commitments to
Action will advance women’s economic participation,
address violence against girls and women, andpromote women’s leadership in the public andprivate sectors. It includes a specific commitment
by select partners to spend more than US$15 billion
with women-owned businesses. Other coalition
partners include Airbnb, American Jewish World
Service, Avon, CARE, Catalyst, Cherie Blair Foundation,
Dermalogica, EY, East-West Center, Foundation
Center, Freeport-McMoRan, Global Fund for Women,
IBM, International Center for Research on Women,
Ingersoll Rand, McLarty Global Fellows, NEST, Procter& Gamble, Pfizer, Sodexo, Together for Girls, UN TrustFund to End Violence Against Women, Unilever,Upaya Social Ventures, WAKE International, Walmart,
Women Deliver, Women for Women International, and
Women’s Funding Network.
Global Citizen is a community of people who wantto learn about and take action on the world’s biggest
challenges, including ending extreme poverty. In
September 2016, UPS, Walmart and Johnson &Johnson each committed to purchase $100 million
from women-owned businesses over the next three
years. This total $300 million commitment which is set
to affect 240,000 lives by 2019, follows 30,000 actions
by Global Citizens, and will be delivered throughGlobal Citizen’s partner, WEConnect International.33
There should be no doubt that corporations can andmust leverage their expertise and global purchasing
power in support of women’s economic empowerment
because it is good business and because of the urgent
and immense positive impact it is having on society.
33 https://www.globalcitizen.org/en/content/global-citizenfestival-2016-impact/ .

corporate guide togender-responsive procurement

81CONCLUSIONSCONCLUSIONSGender-responsive procurement is quickly becoming
a business imperative. Today, women own over athird of all businesses worldwide, generating millions
of employment opportunities and spurring local
development. They also control about $20 trillion
in annual consumer spending, and by 2028, they
are likely to control nearly 75 per cent of consumer
discretionary spending globally. Yet, despite thesestunning statistics, the economic potential of womenowned businesses remains largely untapped. Indeed,
they receive only about one per cent of corporate
procurement spend each year.
By ignoring the potential role of women-owned
businesses in the supply chain, corporations are
missing an opportunity to expand their markets,diversify their supply chains, solidify brand loyalty

and enhance their reputations, while simultaneously
improving the lives of women and girls around theglobe. Corporations can leverage this market segmentbyadopting
gender-responsive
procurement
programmes.
Gender-responsive procurement
begins with
understanding the barriers and challenges preventing
women-owned businesses from accessing andfully participating in the corporate supply chain, anda commitment from top-level management to makegender-responsive procurement an integral part of
the firm’s business practices and culture. The purposeof this Guide has been to provide corporations andtheir suppliers with a deeper understanding of theseissues, and the tools and techniques for translating
corporate commitment into a successful strategy.

corporate guide togender-responsive procurement84

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