The power of nun: taking a lead role in shareholder activism

As a shareholder representative who believes in good pay for bottom-rung workers, Ruth Rosenbaum occasionally reminds corporate executives across the table from her that she has a doctorate in economics. In other words, she knows something about business.

But she may get more clout sometimes, she says, when she tells them something more personal: She's a nun.

That's partly because living under vows carries with it a certain moral authority, she says, even in plush boardrooms. It's also because nuns are well-connected in ways that can stir even high-powered executives to action.

"Companies will say, 'We have this program in country X' " to address a local problem, says Sister Rosenbaum. "And I have no qualms about saying, 'We have sisters, or we know sisters, operating there. I'd like to talk with them to get some feedback about how this program really works on the ground.' Just saying that anchors the dialogue in a deeper reality."

In one niche of a financial world known for crisp suits and material passions, nuns in modest business attire have emerged as an unlikely group of senior stateswomen. Their role, earned through three decades of private-sector activism, has become one of representing both shareholders and the poor, whom they believe feel the impact of corporate policies most intensely.

As investors gear up for hundreds of shareholder meetings over the next four months, nearly half of the first 299 resolutions filed reflect the initiatives of religious investors. In this faith-filled milieu, newcomers to ethical investing are sometimes surprised to see the field's activism led by dozens of nuns and more than 100 orders of religious women, who invest their communal funds with higher goals in mind.

In 2004, Bill Mills launched the Good Steward Fund, a fund of hedge funds that caters to an ethically minded clientele. But he says he had no social mission of his own until last year, when he attended a meeting of faith-based investors in Philadelphia hosted by the Sisters of St. Francis. "As I got to know these folks, they would say [such things as], 'Sister over there was very instrumental in the first campaign against Philip Morris,' " says Mr. Mills, a Birmingham, Ala., entrepreneur. He knew that social investing had won a number of successes over the years, but says he was inspired "by getting to know the individuals who in fact had made all that happen by virtue of their commitment.... I realized ... how much more there was to do and could be accomplished."

Today's investors owe a debt of gratitude to the sisters who laid the groundwork for dozens of shareholder proposals on this season's proxy voting ballots, say some long-time participants in ethical investing.

Investors "who are concerned about how to express their opinions to [companies] are given an opportunity by sisters and others in the faith community to vote on shareholder resolutions on specific issues," says Tim Smith, president of the Social Investment Forum, a network of socially responsible investors. "So it's a platform that's been provided to them."

Nuns routinely work behind the scenes. Sometimes religious orders own stock in a firm and send a nun to represent their social agenda. Nuns also head groups of religious investors, who stand to get a better hearing as a group than they would alone.

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