Women's entrepreneurship -- Key definitions and general criteria

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Publication Date
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IWA 34:2021 - Women's entrepreneurship -- Key definitions and general criteria
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INTERNATIONAL IWA
WORKSHOP 34
AGREEMENT
First edition
2021-03
Women's entrepreneurship — Key
definitions and general criteria
Reference number
IWA 34:2021(E)
ISO 2021
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IWA 34:2021(E)
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© ISO 2021

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ii © ISO 2021 – All rights reserved
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IWA 34:2021(E)
Contents Page

Foreword ........................................................................................................................................................................................................................................iv

Introduction ..................................................................................................................................................................................................................................v

1 Scope ................................................................................................................................................................................................................................. 1

2 Normative references ...................................................................................................................................................................................... 1

3 Terms and definitions ..................................................................................................................................................................................... 1

4 General requirements ..................................................................................................................................................................................... 4

5 Criteria for determination .......................................................................................................................................................................... 4

5.1 General ........................................................................................................................................................................................................... 4

5.2 Ownership ................................................................................................................................................................................................... 4

5.2.1 Determination of ownership ................................................................................................................................. 4

5.2.2 Ownership criteria for women-owned businesses ............................................................................ 5

5.2.3 Ownership criteria for women-led businesses ...................................................................................... 5

5.2.4 Ownership criteria for women-led cooperatives ................................................................................. 6

5.3 Management .............................................................................................................................................................................................. 6

5.3.1 Criteria ...................................................................................................................................................................................... 6

5.3.2 Operational authority .................................................................................................................................................. 7

5.4 Control ............................................................................................................................................................................................................ 7

5.5 Independence ........................................................................................................................................................................................... 8

5.5.1 General...................................................................................................................................................................................... 8

5.5.2 Independence criteria for women-owned businesses .................................................................... 8

5.5.3 Independence criteria for women-led businesses.............................................................................. 8

5.5.4 Independence criteria for women-led cooperatives ......................................................................... 9

5.6 Dilution by investment ..................................................................................................................................................................... 9

Annex A (informative) Workshop contributors .....................................................................................................................................10

Bibliography .............................................................................................................................................................................................................................16

© ISO 2021 – All rights reserved iii
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IWA 34:2021(E)
Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards

bodies (ISO member bodies). The work of preparing International Standards is normally carried out

through ISO technical committees. Each member body interested in a subject for which a technical

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ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of

electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are

described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the

different types of ISO documents should be noted. This document was drafted in accordance with the

editorial rules of the ISO/IEC Directives, Part 2 (see www .iso .org/ directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of

any patent rights identified during the development of the document will be in the Introduction and/or

on the ISO list of patent declarations received (see www .iso .org/ patents).

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expressions related to conformity assessment, as well as information about ISO's adherence to the

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iso/ foreword .html.

International Workshop Agreement IWA 34 was approved at a workshop hosted by the Swedish Institute

for Standards (SIS), in association with the International Trade Centre (ITC) SheTrades Initiative, held

virtually in December 2020.

Any feedback or questions on this document should be directed to the user’s national standards body. A

complete listing of these bodies can be found at www .iso .org/ members .html.
iv © ISO 2021 – All rights reserved
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IWA 34:2021(E)
Introduction

Gender equality contributes to faster economic growth, productivity, and innovation. Equal access to

education, employment, entrepreneurship, trade opportunities, and leadership positions enlarges the

pool of labour and talent available to the economy and contributes to productivity and innovation.

Gender equality can help enterprises succeed. Enterprises with supplier-diversity programmes

outperform other ones. Finally, gender equality is a precondition to reduce poverty. Expanding women’s

opportunities contributes to increasing household income, asset accumulation, and spending on child

welfare.

There are numerous initiatives at global, regional and domestic levels focused on women’s economic

empowerment. However, the lack of clear and universally agreed definitions to describe enterprises

owned or led by women has created challenges across the women entrepreneurial ecosystem.

Particularly, these challenges revolve around collection of gender-disaggregated data, research,

policymaking, international comparability, and access to capacity building, finance and markets.

Creating a definition for enterprises owned or led by women and guidance on its use will allow for clear

and targeted efforts in advancing women’s economic empowerment and will contribute to the overall

achievement of the United Nations Sustainable Development Goals (SDGs) for 2030, including several

gender-specific targets under SDG 5 on gender equality.

Stakeholders worldwide have been using various definitions to describe enterprises owned or led by

women. These definitions have often been adapted to context-specific factors, such as cultural norms,

policy and legal frameworks, the nature of the initiative, and the ease of verification. Some definitions

have been found to be difficult to apply in informal or cooperative sectors, or to not adequately capture

the growth stages of an enterprise.

The nuances among the definitions rest primarily on the terminology, women’s percentage of ownership,

and women’s level of management and control of the enterprise. For example, multiple terminologies

exist, including "women-owned", "women-led", "women-driven", and "women-influenced" enterprises.

Often, various stakeholders apply different sets of criteria to their definitions. Moreover, some

stakeholders have not adopted a definition at all, which often slows down the implementation of

targeted programmes.

In this context, this document establishes clear and universally agreed terms and definitions for use

in programmes and initiatives aimed at women’s economic empowerment. This allows stakeholders to

use an internationally recognized definition appropriate to their specific objectives and social, cultural

and economic context. Recognizing the challenge in establishing one common definition, this document

provides a selection of terms and definitions.

This document was developed virtually over two workshops, with a commenting round between the

workshops. A list of the experts who participated in one or both workshops and/or submitted written

comments in the commenting round is given in Annex A. However, many more registered to the process

and were kept informed throughout and had the possibility to provide input if they chose. In total, 368

experts from 77 countries registered to this process.
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International Workshop Agreement IWA 34:2021(E)
Women's entrepreneurship — Key definitions and general
criteria
1 Scope

This document establishes a set of common definitions related to women's entrepreneurship, such

as those for women-owned business and women-led business. This document also defines women-

led cooperatives and women-led informal enterprises. These definitions can be used, for example, in

women’s economic empowerment programmes (such as procurement and trade programmes) and for

the collection of internationally comparable data on women's entrepreneurship (including the impact

on local and national economies). This document also provides criteria for evaluating important factors

related to these definitions, such as ownership, management, and control, as well as how to handle

dilution by investment.

NOTE If an enterprise cannot be categorized according to the definitions given in this document, it does not

necessarily mean that the enterprise is male-owned or male-led.

This document does not provide recommendations on how to initiate programmes based on the

definitions and criteria, for example on public procurement. In addition, this document does not address

issues such as how to promote conformity assessment.
2 Normative references

The following documents are referred to in the text in such a way that some or all of their content

constitutes requirements of this document. For dated references, only the edition cited applies. For

undated references, the latest edition of the referenced document (including any amendments) applies.

ISO 26000, Guidance on social responsibility
3 Terms and definitions
For the purposes of this document, the following terms and definitions apply.

ISO and IEC maintain terminological databases for use in standardization at the following addresses:

— ISO Online browsing platform: available at https:// www .iso .org/ obp
— IEC Electropedia: available at http:// www .electropedia .org/
3.1
women-owned business

business (3.10) that is more than 50 % owned by one or more women, whose management (3.5)

and control (3.7) lie with one or more women, where a woman is a signatory of the business’s legal

documents and financial accounts, and which is operated independently from businesses that are not

owned by women
3.2
women-led business

business (3.10) that is at least 25 % owned by one or more women, whose management (3.5) and control

(3.7) lie with one or more women, which has at least one third of the board of directors comprised of

women, where a board exists, where a woman is a signatory of the business's legal documents and

financial accounts, and which is operated independently from businesses that are neither led nor owned

by women
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IWA 34:2021(E)
3.3
women-led cooperative

cooperative (3.11) in which more than 50 % of the total number of votes are held by women, where

the majority of the board of directors are women, and where the majority of leadership positions, if

applicable, are held by women
3.4
women-led informal enterprise

informal enterprise (3.19) whose management (3.5) and control (3.7) lie with one or more women

Note 1 to entry: The woman/women make(s) the important strategic and operational decisions about the

economic unit for which her/their work is performed and about the organization of her/their work, she/they

is/are not accountable to or supervised by other persons, and she/they is/are not dependent on a single other

economic unit or person for access to the market, raw materials or capital items.

3.5
management

ability to direct basic functions and day-to-day activities of the enterprise (3.12), including, but not

limited to, signature responsibility for insurance and/or bonds, investments, the ability to sign payroll

checks and letters of credit, the authority to negotiate contracts and financial services

3.6
operational authority
ability to manage the day-to-day activities of the enterprise (3.12)
3.7
control

power, as evidenced by the governance documents when applicable, to direct or cause the direction

of the management (3.5) or policies and the ability to make decisions on strategy and the direction

of the enterprise (3.12) without any provisions which restrict the ability of the woman/women from

exercising this power
3.8
managerial control

demonstrated ability to make independent and unilateral decisions regarding the enterprise (3.12)

necessary to guide the future and destiny of the enterprise
3.9
independence

ability of the enterprise (3.12) to perform in the enterprise’s area of specialty/expertise without

substantial reliance on finances and other resources (e.g. equipment, automobiles, facilities) of

enterprises that are neither led nor owned by women

Note 1 to entry: "Substantial reliance on finances and other resources" does not include those related to

investment or start-up capital.

Note 2 to entry: The enterprise can rely on finances and/or resources of enterprises that are neither led nor

owned by women, if these are obtained at market value.
3.10
business

undertaking carried out for profit in the course of which products are acquired or supplied whether at

a price or otherwise

Note 1 to entry: Pass-through entities (3.18) or sales representatives are not included by this term.

[SOURCE: ISO 22059:2020, 3.1, modified — The note to entry has been added.]
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IWA 34:2021(E)
3.11
cooperative

autonomous association of persons united voluntarily to meet their common economic, social, and

cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise (3.12)

[3]

[SOURCE: Statement on the Cooperative identity, International Cooperative Alliance ]

3.12
enterprise
institutional unit in its capacity as a producer of goods and services

Note 1 to entry: An enterprise can be a corporation (3.17), a quasi-corporation, or an unincorporated enterprise.

Note 2 to entry: Enterprises include all types of organizations defined as women-owned businesses (3.1) women-

led businesses (3.2), women-led cooperatives (3.3) and women-led informal enterprises (3.4).

Note 3 to entry: This definition includes social enterprises, and both for-profit and non-profit enterprises.

[4]

[SOURCE: Glossary of the 1993 SNA, United Nations Statistical Commission , modified]

3.13
sole proprietor

individually owned business (3.10) whose assets are wholly owned by a single individual

3.14
general partnership

ongoing, formalized cooperation between an enterprise (3.12) and one or more other enterprises,

including other enterprises, usually concerning particular services or activities

Note 1 to entry: A general partnership will usually have a contractual basis. Partners may make different

contributions, e.g. expertise, funding, training, materials in kind, premises.

Note 2 to entry: Cooperation between two or more enterprises within a single administrative unit is excluded.

Note 3 to entry: Time-limited cooperation on a specified project is excluded and counted as a cooperative project.

Note 4 to entry: A one-way relationship, whether paid or unpaid, where one partner is only supplying and the

other only receiving services, is excluded.

[SOURCE: ISO 2789:2013, 2.5.5, modified — The original term "partnership" has been replaced with

"general partnership", and the words "library"/"libraries" and "organization"/"organizations" have

been replaced with "enterprise"/"enterprises" throughout the definition.]
3.15
limited partnership

separate legal entity which behaves like a corporation (3.17) but whose members enjoy limited liability

Note 1 to entry: In effect, the partners are simultaneously both shareholders and managers.

3.16
limited liability company

private business (3.10) whose owners are legally responsible for its debts only to the extent of the

amount of capital they invested
3.17
corporation

large business (3.10) or group of businesses authorized to act as a single entity and recognized as

such in law
3.18
pass-through entity

business (3.10) entity whose income is taxed as the owner's personal income at the individual rate

rather than as business income
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IWA 34:2021(E)
3.19
informal enterprise

enterprise (3.12), owned by an individual or a household, that is not constituted as a separate legal

entity independently of its owner, that is not legally registered in the business (3.10) registry and for

which no complete accounts are available that would permit a financial separation of the production

activities of the enterprise from the other activities of its owner(s)

Note 1 to entry: Informal enterprises are private unincorporated enterprises, excluding quasi-corporations.

Note 2 to entry: The goods or services produced are mainly meant for sale or barter.

Note 3 to entry: "Registration in the business registry" does not include, for example, registration in listings of

informal enterprises.

EXAMPLE Informal enterprises can be characterized by one or more of the following:

— lack of licenses;
— lack of registered address;
— lack of bank account;
— lack of relevant documentation;
— lack of registration;
— lack of tax identification;
— lack of a complete set of accounts.
4 General requirements

When evaluating an enterprise based on the definitions and criteria in this document, the evaluation

shall be independent of:
— regional or country context;
— women's level of education;
— sector of activity;
— participation in trade;

— any other elements that are illegitimate grounds for discrimination described in ISO 26000.

5 Criteria for determination
5.1 General

This clause sets criteria for determination of different factors that are important in evaluating whether

an enterprise is women-owned or women-led. These criteria can be used both by enterprises wanting

to demonstrate that they correspond to one of these categories, and by other organizations wanting to

carry out an assessment of one or more enterprises.
5.2 Ownership
5.2.1 Determination of ownership

Ownership shall be determined based on titles related to, and beneficial ownership of, stock,

membership interests, or other equity in an enterprise.
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IWA 34:2021(E)
More specifically:

— the ownership of the enterprise by the woman/women shall be real, substantial and beyond pro-

forma ownership as reflected in its ownership documents;

— the woman/women shall share in all risk and profits commensurate with her/their ownership

interest;

— the woman/women shall not be (a) minor(s) and the securities/funds that constitute the majority

ownership shall not be held in trust that she/they do(es) not have control over;

— the woman/women shall demonstrate that she/they has/have contributed capital and/or expertise.

Contribution of capital and/or expertise by the woman/women to acquire her/their ownership interest

shall be real and substantial and be in proportion to the interest(s) acquired. Insufficient contributions

shall include, but shall not be limited to, promises to contribute capital or expertise in the future, a note

payable to the enterprise or its owners who are not women, or the mere participation as an employee.

5.2.2 Ownership criteria for women-owned businesses

Ownership by one or more women shall be determined as follows, based on the business type.

— Sole proprietor: The woman shall own 100 % of the business's assets.
— Corporation:
— The woman owner(s) shall own more than 50 % of equity and voting rights.

— Any voting agreements among the shareholders shall not dilute the beneficial ownership, the

rights, or the influence of the woman owner(s) of the stock or classes of stock of the corporation.

— The woman owner(s) shall possess the right to all customary incidents of ownership (e.g. ability

to transfer stock, title possession, enter binding agreements).

— General partnership: The woman owner(s) shall own more than 50 % of the general partnership

interests.
— Limited partnership:

— The woman owner(s) shall own more than 50 % of the general partnership interest and shall

have more than 50 % control among the general partners.

— In addition, the women limited partners shall receive more than 50 % of the profits and benefits,

including tax credits, deductions and postponements distributed or allocable to the limited

partners.
— Limited liability companies:

— The woman owner(s) shall own more than 50 % of membership interests and shall have more

than 50 % of the control among the members.

— The woman owner(s) shall also participate in all risks and profits of the business at a rate

commensurate with her/their membership interests.

— Holding companies: The woman owner(s) shall own more than 50 % of the holding company.

5.2.3 Ownership criteria for women-led businesses

These criteria apply for women-led business. Ownership by one or more women shall be determined as

follows based on the business type.
— Sole proprietor: The woman shall own 100 % of the business's assets.
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IWA 34:2021(E)
— Corporation:

— The woman owner(s) shall own at least 25 % of each class of voting stock and 25 % of the

aggregate of all outstanding stock.

— Any voting agreements among the shareholders shall not dilute the beneficial ownership, the

rights, or the influence of the woman owner(s) of the stock or classes of stock of the corporation.

— The woman owner(s) shall possess the right to all customary incidents of ownership (e.g. ability

to transfer stock, title possession, enter binding agreements)

— General partnership: The woman owner(s) shall own at least 25 % of the general partnership

interests.
— Limited partnership:

— The woman owner(s) shall own at least 25 % of the general partnership interest and at least

25 % control among the general partners.

— In addition, the women limited partners shall own at least 25 % of the limited partnership

interests and shall receive at least 25 % of the profits and benefits, including tax credits,

deductions and postponements distributed or allocable to the limited partners.
— Limited liability companies:

— The woman owner(s) shall own at least 25 % of membership interests and at least 25 % of the

management and control among the members.

— The woman owner(s) shall also participate in all risks and profits of the business at a rate

commensurate with her/their membership interests.
5.2.4 Ownership criteria for women-led cooperatives

The statutes of a cooperative are a key identifier of a women-led cooperative. The statutes of a women-

led cooperative shall stipulate that more than 50 % of the total number of votes and membership shall

be held by women, as well as that the majority of the board of directors shall be women and that the

majority of leadership positions, if applicable, shall be held by women.
5.3 Management
5.3.1 Criteria
5.3.1.1 Women-owned and women-led businesses

The following criteria shall be applied when proving management of a business by one or more women.

She/they shall:

— possess documents that clearly indicate her/their ability to direct basic business functions, e.g.

authority to sign payroll checks and letters of credit, signature responsibility for insurance and/or

bonds, authority to negotiate contracts and financial services;

— be able to make the day-to-day, as well as major, decisions on matters related to policy and operations;

— be able to hire and fire managers who are charged with running the business;

— hold one or more of the highest (defined) officer positions in the business (President, Chief Executive

Officer, Chair of the Board, Managing Member or Managing Partner, or equivalent);

— have operational authority and managerial control and oversight [unless the woman/women

chair(s) the board];
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IWA 34:2021(E)

— be the signatory of the banking accounts and legal documents [unless the woman/women chair(s)

the board].
5.3.1.2 Women-led cooperatives and women-led informal enterprises

When proving management by one or more women for cooperatives and/or informal enterprises

she/they shall have the power to direct or cause the direction of the management and policies of the

enterprise and to make both day-to-day and major decisions on matters related to operations.

5.3.2 Operational authority
Operational authority shall be evidenced by the woman/women having:
— responsibility for decision making;

— sufficient knowledge of the enterprise to manage and evaluate the work of subordinates;

— managerial control whereby the woman/women make(s) independent and unilateral decisions

necessary to guide the enterprise.
5.4 Control

The following criteria shall be used in determining the control by one or more women of an enterprise.

— Governance:

— The organizational and governing documents shall not contain any provision that restricts the

ability of the woman/women from exercising managerial control and operational authority of

the enterprise.

— In reviewing governance documents and issues, special attention shall be given to:

— the composition of the enterprise's governing body (e.g. board of directors or management

committee);
— the functioning of the governing body;

— the content of shareholder’s agreements, bylaws, operating agreements, general partnership

agreements, limited partnership agreements or state incorporation statutes, and the extent

to which such agreements, bylaw(s), or statutes affect the ability of the woman/women to

direct the management and policy of the enterprise.

— A woman/women shall hold one or more of the highest (defined) officer positions in the enterprise

(President, Chief Executive Officer, Chair of the Board, Managing Member or Managing Partner,

or equivalent).
— Operation and management:
— The woman/women shall possess the power to direct or cause the
...

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