Why Julie Goodridge Might Be the Scariest Person in Investment Banking

Don’t mistake her modest demeanor for softness; Julie Goodridge is a force to be reckoned with in the investment world. As the president and founder of Boston-based NorthStar Asset Management, an all-woman, socially responsible investment firm, Goodridge isn’t afraid to stay on top of what’s happening with the companies in her clients’ portfolios.

Do these organizations have diversity-focused mission statements Are they culturally competent in global local markets while upholding basic human rights In the United States, what responsible types of political action committee (PAC) contributions are they making

Having the answers to these questions allows Goodridge and her staff of women to analyze the financial and social impacts of shareholders’ investments to maximize return. And she’ll be the first to hold their “feet to the fire” when businesses’ practices are less than socially responsible. She says it’s all part of her fiduciary responsibility to protect her clients’ ROI.

During a recent interview with DiversityInc CEO Luke Visconti, Goodridge details some of the challenges she has faced in protecting her clients’ portfolios when corporations act in ways that are not considered socially responsible. She discusses how her firm has taken the initiative to uphold equitable business practices and inspire activism.Scroll down to watch video clips from the interview.

For more on corporate social responsibility, read Visconti’s column, “Ask the White Guy: Decision Making, Clarity of Values & What to Do When It Goes Horribly Wrong,” and “Lowe’s Muslim Publicity Gaffe Serves as Case Study of What Not to Do.” For best practices in diversity management, visit BestPractices.DiversityInc.com.

LUKE VISCONTI: Tell us about NorthStar and what you do.

JULIE GOODRIDGE: I started the company about 20 years ago. I work primarily with people with inherited wealth. We only have about 65 clients and manage $160 million, so it’s a small firm and, by Wall Street standards, a good setting.

We initially set out to create portfolios for our clients that we felt would match their values. That was easier a long time ago; now things are much more complicated.

We started filing shareholder resolutions on behalf of the shares held in our clients’ accounts. We didn’t believe that there was really any company that’s 100 percent socially responsible.

We wanted to engage with companies on behalf of our clients, to show them that we really do care about the companies that are in the portfolio and that we do think about their values when we choose those companies.

VISCONTI: You were doing this in an effort to help the companies make sound decisions for the benefit of your investors

GOODRIDGE: I have a fiduciary obligation to my clients to have things in their portfolio that actually reflect what they need and want. I am looking at their financial returns, and I am looking at the social return.

If I have a company in the portfolio that is really fantastic but has a few things that make me nervous, I feel like I need to engage with the company to help them think it through.

This engagement is a tricky thing. We’re a very small firm, an all-women firm. We are just now eight in total. Last year, we were four. It was hard to get a call from a company. They’d say, “Julie, we’d really like to come and meet with your crew and get to know you a little bit.” I feel like what they didn’t understand was that we had five chairs in the office. We have everybody in the company sit down and think it outwhat is going on in the news right now and in what ways might those issues affect the companies and our portfolios.

Public Policy, Corporate Values

VISCONTI: Tell me about some of your favorite shareholders

GOODRIDGE: Our clients have inherited wealth. A lot of times they have stock in the portfolio that we wouldn’t necessarily want them to have. We started crafting shareholder resolutions at those companies.

For example, one of my favorites was when Lee Raymond retired [in 1995 as chairman and CEO] at ExxonMobil with what then was seen to be an exorbitant executive-compensation package. We asked them to do an analysis of the highest- and lowest-paid workers and to tell us how that had worked over the last 10 years for both.

This was a point where gas prices were striking highs. It cost people something like one month’s worth of their salary to equal the amount of money that Lee Raymond made in his first 15 minutes every day.

The other thing we worked on is getting companies to create a “human right to water policy.” We had been working with a group at the Unitarian Universalist Service Committee that was doing a lot of work on this.

One of our clients chose Pepsi in their portfolio. Pepsi had gotten into a lot of trouble for sucking all the water out of the aquifers in this town in India. What we wanted the company to do was to develop an ethical standard for using water and interacting with communities around water usage. We came up with five different principles that we thought that they should have.

[Director of Public Policy] Paul Boykas from Pepsi called me and said, “Julie, what can we do to make this resolution go away” That was an opportunity for me to engage with him. He asked me to draft something for him and I did. I drafted what was the basis for the Pepsi Human Right to Water Policy. They ended up getting awards and recognition. It’s a big part of their annual report every year.

I feel like if you don’t have an ethical guideline from which to operate your company, you can’t count on a matrix or government regulation to pull you through.

Steve Jobs is a perfect example. Here’s a guy who knew exactly what he wanted to do. There has to be a way to put in writing what the values of the company are so that the company can move forward and be seen as adding benefit over time.

VISCONTI: What in your mind constitutes a good statement of values Is there a formula

GOODRIDGE: We are concerned about the treatment of employees, consumer safety issues and good products, sustainability, commitment to climate, environmental concerns. Each corporate group has to examine the ways in which they have an impact in their immediate and global neighborhood.

If they are not really looking at themselves in every aspect to see how their mission is being carried forth by their employees, through their operations and locations for those operations by the vendors that they use, they are going to run into trouble.

The most recent example of that is around political contribution, since the Citizen United decision [the 2010 U.S. Supreme Court holding that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions]. We were freaked out when this happened to Target. (Thank God Target wasn’t a company in our portfolio.)

[For more on Target’s PAC funding of a Minnesota gubernatorial candidate who had expressed anti-gay views, see www.DiversityInc.com/targetpac.]

We looked at all the companies in our portfolio, heavily consumer-driven companies that could potentially be targeted by groupsright or left didn’t really matter because their values are not in congruence, expressed through their political contributions.

Procter & Gamble gave a $40,000 contribution to an Ohio group [Partnership for Ohio’s Future] that supported the election of two judges. This group supports a piece of legislation that would end collective-bargaining rights for public citizens in Ohio.

Those could be the wives, the children, the parents of their employees. Why would that be great, to have your father lose all of his pension benefits or not be able to continue health insurance Their PAC contributions are out there and people start to take a look at who they are giving to.

Disclosing PACs

VISCONTI: How does a decision like this get made in a company How do these things happen

GOODRIDGE: There is a management committee that makes the decisions. You can make a contribution to a corporate PAC if you are a shareholder. You can make it if you are a certain class of employee and you can make a contribution to a specific candidate through the PAC.

What they are not doing is they are not seeing how their values translate into every single aspect of their corporate citizenship.

VISCONTI: You are doing this on behalf of your customers Providing a superior return for their investments

GOODRIDGE: We file the shareholder resolution. We would quite truthfully be embarrassed to have some horrible piece of news come out about any of the companies that we currently have in our portfolio, or we are probably going to get sued by our clients.

If I have stock in a portfolio that is underperformingfor example, if I had Target and it has been underperforming over this period of timeI need to be able to explain to my clients why that’s happening and why it’s still on the portfolio. I would really rather have the reasons for that be that they had a bad quarter. I don’t want it to be because they made an incredibly stupid gift to a very conservative group that violates their corporate values.

Interestingly, a lot of corporations don’t disclose. Corporations form PACs because historically that is the only way you could give to federal candidates. For elections, those PACs and that money has to be disclosed. No one has ever looked at the data. If a company is disclosing, as was the case with The Home Depot, there is data there for anybody to look at.

We had The Home Depot in the portfolio and we did an analysis of what they are giving. They have nondiscrimination based on sexual orientation, nondiscrimination based on gender identity. They got in trouble so they are trying really hard to do the right thing. We were blown away. You would think a company that has publically defined values would support candidates that shared those values. They will say, “We’re concerned about our business interest.” As far as I am concerned, and probably the folks at Target are now concerned, their business interests have to do with how they are speaking with their resources.

[The Home Depot] had made a [$10,000] contribution to Bob McDonnell, who was running for the governor of Virginia, through the general treasury funds. The minute he got into office and on his campaign trail, he was committed to rolling back all of the protections for LGBT citizens in the state of Virginia.

I look at that and I think, “Wow, what would it be like to be any level of employee who is LGBT at The Home Depot in Virginia and realize that contributions made from the general treasury support this guy”

And what about PAC money It’s employee money and should not be subjected to this sort of thing. It would be worse if you are gay or lesbian and realize that the guy sitting at the desk next to you is giving money to this PAC precisely to support this guy.

Recently we went to Procter & Gamble. Procter & Gamble does a lot around the world. They were very concerned about these kinds of things. They were really trying hard. But when we looked at their PAC contributions, we saw that stuff and they denied that they made any treasury contributions: “We don’t make any treasury contributions, so why are you picking on us about our PAC” In fact, they had just been awarded a special recognition by the Center for Political Accountability because they don’t give money directly out of the treasury.

Low and behold, they are preparing to go to shareholder meetings and something comes up on the SEC website. Procter & Gamble has come forth and said that they did.

We spent a lot of time worrying about people’s asset allocation, their income needs. We believe that shareholder engagement, in addition to money management, can be a positive force for social change.

Gender Investment Strategies

VISCONTI: Wall Street and the Wall Street banks have been dominated by men, but your firm is dominated by women. Do you see a philosophical difference between women and men, their investment strategies and how they view investments and security

GOODRIDGE: When the market goes down like 500 points at a day, which it does pretty much every other day, the women are like, “Are you OK Is everything all right” Then they will ask, “Do I still have any money” I’m like, “Yes, let’s schedule a time; let me go through your portfolio.” The guys are like, “We should buy something; it’s just an opportunity,” “We should sell this,” or “I have to trim my portfolio”just crazy, irrational decisions.

You’d think it would be the other way aroundthat women become hysterical and they decide to sell. No, it’s the guys that freak out. The guys are active traders. They want to buy and sell. They want to sort the stock. We don’t do that. Those kind of guys need to find somebody else; there are plenty of people that do derivatives.

VISCONTI: I was told by WEConnect, which is the global effort by WBENC that certifies women-owned businesses, that there is only 1 percent of global business equity held by women. What do you think would be the benefitson the world and women in businessof having gender equity

GOODRIDGE: It’s just the same benefit that you have by including any kind of diversity. If you don’t have a broad group of people sitting around the table trying to analyzefor example, what we should do, who you should give your money to, what political candidate you should fundyou are not getting the full picture.

I found that a woman thinks differently than a man. Most women are raised differently. There is a lot going on. The question is, how can you bring in diversity

Diverse groups of people can be really scary because it challenges you to think outside the box. For example, I don’t have any men working for me, except my computer consultant. For a long time, I didn’t have people of color in my office. Not because I didn’t want to hire people of color but because I had four employees.

The way that we come to decisions, the way we come to learn and respect one another’s opinions and values, the way we grow and are creativeit’s vitally important that everybody is sitting at the table for that to happen.

The Beginning

VISCONTI: How did you end up doing this

GOODRIDGE: I went to high school for performing arts. I had to figure out why to go to college. I was a terrible writer and the guys in the next room said, “Look, if you take these philosophy classes with us, you are going to totally learn how to write.”

I decided to become a philosophy major at Boston University. I just wanted to learn how to write and think in a broad way. Then I was a community organizer. I went to the Harvard Graduate School of Education where I got master’s degree in human development.

The only place locally in Massachusetts that would hire me at the salary level I needed was Merrill Lynch. I called them up. They asked if I had any sales experience. I was a community organizer and I raised all this money. I was known throughout ACORN [Association of Community Organizations for Reform Now]. I made that sound like sales experience. They hired me. I hated it.

My friend Amy Domini came out with a book in early 1984 called “Ethical Investing.” We started doing classes and I started learning how to do socially responsible investing. I started doing this activism.

We created a booklet. We were the first people to do this. We would describe every single issue. We had a cross reference. You go to these issues and this is how you should vote; if you believe this thing, you should vote that way.

Then clients were voting their proxies anyway because they were just throwing [the booklets] in the trash. I decided that we needed to start voting client proxies for them.

Career of Activism

VISCONTI: Think of my audience, mostly women, and who they are. If they want to leave their corporate job, what was that bridge What was that job

GOODRIDGE: I was working at that point as a team leader. I worked at Dean Witter and I was the only one doing social investing. There were 125 brokers in the office; I was the only woman.

I was totally different and my clients were totally different. I had, at that time, $20 million under management, and my manager said to me, “You are not generating enough commission.”

I felt that if I was paid even half a percent for managing that $20 million, and I could do what I want to do on behalf of my clients, I wouldn’t have to come downtown and work with these guys every day. I thought to file with the Securities and Exchange Commission to become a registered investment adviser, and that’s what I did.

SIDEBAR: Company Comments

DiversityInc contacted the companies Goodridge cited in this interview for response. Target and Procter & Gamble, Nos. 30 and 5 in The 2012 DiversityInc Top 50, respectively, responded to DiversityInc, and their statements appear here. The Home Depot, ExxonMobil and PepsiCo declined to comment.


Following the 2010 election, Target conducted a thorough evaluation of our processes and established a Policy Committee to review and provide greater oversight to future corporate political giving. Moving forward, we will evaluate our giving based on business, team member and stakeholder objectives. Target believes that engaging in civic activities is an important part of operating a national retail business and believes we operate best when working with policy makers on both sides of the aisle.

Procter & Gamble

P&G’s commitment to diversity and inclusion is unwavering. Our aim is to provide a work environment, which fosters a culture of inclusion for all, so that everyone is valued and included. Our Company Purpose is to touch and improve lives, beginning with our employees.Without exception, we value all of our employees and respect their right to be who they need to be.

Guided by our Purpose, Values and Principles, P&G participates in the political process to help shape public policy and legislation that has a direct impact on the Company.Engagement on public policy issues ensures that the interests of our employees, consumers and shareholders are fairly represented at all levels of government around the world. We are committed to being transparent about our political involvement globally, and more information can be found on the Political Involvement page onwww.pg.com.

Regarding P&G’s contribution to Partnership for Ohio’s Future,P&G engages in the political process by occasionally providing financial support to state ballot initiatives and issue advocacy campaigns that have a direct impact on the business. In this case, P&G supported two candidates for the Ohio Supreme Court because P&G is an Ohio company, and the Court plays an important role in the legal climate in which we operate. P&G’s involvement in these campaigns is overseen by a multi-functional team comprised of representatives from Global Government Relations, Legal, Human Resources, Corporate Communications and other functions related to the specific issue under consideration. As with all other aspects of our political involvement, our participation in such efforts is guided by our Purpose, Values and Principles and by our business strategies.

The Procter & Gamble Good Government Fund (P&G GGF) is P&G’s political action committee. The P&G GGF consists ofvoluntary personalcontributions by employeesto support candidates at the federal, state and local level, who support issues important to the business and the quality of life in the communities in which we live and work. Support for any political candidate is based solely upon business impact (i.e., tax, trade, chemical regulation, innovation policy, marketing and advertising, etc.) and not in consideration of positions candidates may take on social issues.

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