Executive Order 12138

Executive order

By: Jimmy Carter

Date: May 18, 1979

Source: The American Presidency Project. "Jimmy Carter: Women's Business Enterprise Executive Order 12138." May 18, 1979. <http://www.presidency.ucsb.edu/ws/> (accessed June 11, 2006).

About the Author: Jimmy Carter was the thirty-ninth President of the United States of America, and he was in office from 1977 until 1981. Among the highlights of his presidency were an increase of some eight million jobs and a decrease in the nation's budget deficit. Carter was very involved in conserving natural resources and preserving the environment; he significantly increased the number of national parks in the United States and was instrumental in implementing legislation protecting the Alaskan tundra. Carter was deeply committed to human and civil rights issues, both within the United States and worldwide.

INTRODUCTION

The National Women's Business Enterprise Policy was created by then-President Carter's ratification of Executive Order 12138. Essentially, the Policy made some significant changes in the previous Small Business Act so as to enable a variety of means through which there would be development, growth, and expansion of women-owned small businesses and entrepreneurial efforts. It was expanded upon by the Women's Business Ownership Act of 1988 (House Bill 5050), which also served to create the National Women's Business Council (NWBC). The NWBC was created as an advisory council empowered to make policy and recommendations to the federal government. The group advises the Congress, the President, and the United States Small Business Administration on matters considered to be of economic and pro-grammatic significance to female business owners. The NWBC, according to its published data, was specifically designed to "promote bold initiatives, policies, and programs designed to support women's business enterprises at all stages of development in the public and private sector marketplaces—from start-up to success to significance." The current make-up of the NWBC, which was shifted somewhat by the passage of the Small Business Reauthorization Act in 1994, includes representation from both female small business owners and larger women's business organizations.

In the creation of the National Women's Business Enterprise Policy, it was necessary to create a specific definition of a woman-owned business organization (in contrast to a small business with a single owner). The legal definition is a business that has a minimum of fifty-one percent ownership, operation, and control by a woman or women. By definition, control refers to the power to make executive and management decisions and to create official policy and procedures. Operation refers to the day-to-day on-site or local management and running of the business. A Women's Business Enterprise is legally defined as consisting of one or more business(es) either currently woman-owned (or women-owned) or in the process of being created, developed, implemented and overseen or managed by a woman or women.

Women have traditionally been significantly under-represented in business ownership and management in the United States (as well as in most of the developed world); among the objectives of then-President Carter was to begin the process of shifting the balance of business power more to the center of the continuum by encouraging the creation, development, implementation, and growth of women-owned businesses and business ventures. It was also among the goals of the Policy to increase the visibility and successful efforts of women in the attainment of federal and state government contracts. In order to provide guidance, monitoring, and oversight for the successful implementation of the Policy, the legislation also created an Interagency Committee on Women's Business Enterprise.

PRIMARY SOURCE

EXECUTIVE ORDER 12138

Creating a National Women's Business Enterprise Policy and Prescribing Arrangements for Developing, Coordinating and Implementing a National Program for Women's Business Enterprise

In response to the findings of the Interagency Task Force on Women Business Owners and congressional findings that recognize:

1. the significant role which small business and women entrepreneurs can play in promoting full employment and balanced growth in our economy;
2. the many obstacles facing women entrepreneurs; and
3. the need to aid and stimulate women's business enterprise;

By the authority vested in me as President of the United States of America, in order to create a National Women's Business Enterprise Policy and to prescribe arrangements for developing, coordinating and implementing a national program for women's business enterprise, it is ordered as follows:

1–1. Responsibilities of the Federal Departments and Agencies.

1–101. Within the constraints of statutory authority and as otherwise permitted by law:

1. Each department and agency of the Executive Branch shall take appropriate action to facilitate, preserve and strengthen women's business enterprise and to ensure full participation by women in the free enterprise system.
2. Each department and agency shall take affirmative action in support of women's business enterprise in appropriate programs and activities including but not limited to:
   1. management, technical, financial, and procurement assistance,
   2. business-related education, training, counselling and information dissemination, and
   3. procurement.
3. Each department or agency empowered to extend Federal financial assistance to any program or activity shall issue regulations requiring the recipient of such assistance to take appropriate affirmative action in support of women's business enterprise and to prohibit actions or policies which discriminate against women's business enterprise on the ground of sex. For purposes of this subsection, Federal financial assistance means assistance extended by way of grant, cooperative agreement, loan or contract other than a contract of insurance of guaranty. These regulations shall prescribe sanctions for noncompliance. Unless otherwise specified by law, no agency sanctions shall be applied until the agency or department concerned has advised the appropriate person or persons of the failure to comply with its regulations and has determined that compliance cannot be secured by voluntary means.

1–102. For purposes of this Order, affirmative action may include, but is not limited to, creating or supporting new programs responsive to the special needs of women's business enterprise, establishing incentives to promote business or business-related opportunities for women's business enterprise, collecting and disseminating information in support of women's business enterprise, and insuring to women's business enterprise knowledge of and ready access to business-related services and resources. If, in implementing this order, an agency undertakes to use or to require compliance with numerical set-asides, or similar measures, it shall state the purpose of such measure, and the measure shall be designed on the basis of pertinent factual findings of discrimination against women's business enterprise and the need for such measure.

1–103. In carrying out their responsibilities under Section 1–1, the departments and agencies shall consult the Department of Justice, and the Department of Justice shall provide legal guidance concerning these responsibilities.

1–2. Establishment of the Interagency Committee on Women's Business Enterprise.

1–201. To help insure that the actions ordered above are carried out in an effective manner, I hereby establish the Interagency Committee on Women's Business Enterprise (hereinafter called the Committee).

1–202. The Chairperson of the Committee (hereinafter called the Chairperson) shall be appointed by the President. The Chairperson shall be the presiding officer of the Committee and shall have such duties as prescribed in this Order or by the Committee in its rules of procedure. The Chairperson may also represent his or her department, agency or office on the Committee.

1–203. The Committee shall be composed of the Chairperson and other members appointed by the heads of departments and agencies from among high level policy-making officials. In making these appointments, the recommendations of the Chairperson shall be taken into consideration. The following departments and agencies and such other departments and agencies as the Chairperson shall select shall be members of the Committee: the Departments of Agriculture; Commerce; Defense; Energy; Health and Human Services; Housing and Urban Development; Interior; Justice; Labor; Transportation; Treasury; the Federal Trade Commission; General Services Administration; National Science Foundation; Office of Federal Procurement Policy; and the Small Business Administration. These members shall have a vote. Non-voting members shall include the Executive Director of the Committee and at least one but no more than three representatives from the Executive Office of the President appointed by the President.

1–204. The Committee shall meet at least quarterly at the call of the Chairperson, and at such other times as may be determined to be useful according to the rules of procedure adopted by the Committee.

1–205. The Administrator of the Small Business Administration shall provide an Executive Director and adequate staff and administrative support for the Committee. The staff shall be located in the Office of the Chief Counsel for Advocacy of the Small Business Administration, or in such other office as may be established specifically to further the policies expressed herein. Nothing in this Section prohibits the use of other properly available funds and resources in support of the Committee.

1–3. Functions of the Committee. The Committee shall in a manner consistent with law:

1–301. Promote, coordinate and monitor the plans, programs and operations of the departments and agencies of the Executive Branch which may contribute to the establishment, preservation and strengthening of women's business enterprise. It may, as appropriate, develop comprehensive interagency plans and specific program goals for women's business enterprise with the cooperation of the departments and agencies.

1–302. Establish such policies, definitions, procedures and guidelines to govern the implementation, interpretation and application of this order, and generally perform such functions and take such steps as the Committee may deem to be necessary or appropriate to achieve the purposes and carry out the provisions hereof.

1–303. Promote the mobilization of activities and resources of State and local governments, business and trade associations, private industry, colleges and universities, foundations, professional organizations, and volunteer and other groups toward the growth of women's business enterprise, and facilitate the coordination of the efforts of these groups with those of the departments and agencies.

1–304. Make an annual assessment of the progress made in the Federal Government toward assisting women's business enterprise to enter the mainstream of business ownership and to provide recommendations for future actions to the President.

1–305. Convene and consult as necessary with persons inside and outside government to develop and promote new ideas concerning the development of women's business enterprise.

1–306. Consider the findings and recommendations of government and private sector investigations and studies of the problems of women entrepreneurs, and promote further research into such problems.

1–307. Design a comprehensive and innovative plan for a joint Federal and private sector effort to develop increased numbers of new women-owned businesses and larger and more successful women-owned businesses. The plan should set specific reasonable targets which can be achieved at reasonable and identifiable costs and should provide for the measurement of progress towards these targets at the end of two and five years. Related outcomes such as income and tax revenues generated, jobs created, new products and services introduced or new domestic or foreign markets created should also be projected and measured in relation to costs wherever possible. The Committee should submit the plan to the President for approval within six months of the effective date of this Order.

1–4. Other Responsibilities of the Federal Departments and Agencies.

1–401. The head of each department and agency shall designate a high level official to have the responsibility for the participation and cooperation of that department or agency in carrying out this Executive order. This person may be the same person who is the department or agency's representative to the Committee.

1–402. To the extent permitted by law, each department and agency upon request by the Chairperson shall furnish information, assistance and reports and otherwise cooperate with the Chairperson and the Committee in the performance of their functions hereunder. Each department or agency shall ensure that systematic data collection processes are capable of providing the Committee current data helpful in evaluating and promoting the efforts herein described.

1–403. The officials designated under Section 1–401, when so requested, shall review the policies and programs of the women's business enterprise program, and shall keep the Chairperson informed of proposed budget, plans and programs of their departments or agencies affecting women's business enterprise.

1–404. Each Federal department or agency, within constraints of law, shall continue current efforts to foster and promote women's business enterprise and to support the program herein set forth, and shall cooperate with the Chairperson and the Committee in increasing the total Federal effort.

1–5. Reports.

1–501. The Chairperson shall, promptly after the close of the fiscal year, submit to the President a full report of the activities of the Committee hereunder during the previous fiscal year. Further, the Chairperson shall, from time to time, submit to the President the Committee's recommendations for legislation or other action to promote the purposes of this Order.

1–502. Each Federal department and agency shall report to the Chairperson as hereinabove provided on a timely basis so that the Chairperson and the Committee can consider such reports for the Committee report to the President.

1–6. Definitions. For the purposes of this Order, the following definitions shall apply:

1–601. "Women-owned business" means a business that is at least 51 percent owned by a woman or women who also control and operate it. "Control" in this context means exercising the power to make policy decisions. "Operate" in this context means being actively involved in the day-to-day management.

1–602. "Women's business enterprise" means a woman-owned business or businesses or the efforts of a woman or women to establish, maintain or develop such a business or businesses.

1–603. Nothing in subsections 1–601 or 1–602 of this Section (1–6) should be construed to prohibit the use of other definitions of a woman-owned business or women's business enterprise by departments and agencies of the Executive Branch where other definitions are deemed reasonable and useful for any purpose not inconsistent with the purpose of this Order. Wherever feasible, departments and agencies should use the definition of a woman-owned business in subsection

1–601 above for monitoring performance with respect to women's business enterprise in order to assure comparability of data throughout the Federal Government.

1–7. Construction. Nothing in this Order shall be construed as limiting the meaning or effect of any existing Executive order.

SIGNIFICANCE

According to statistics published by women-21.gov, by the end of the twentieth century 9.1 million businesses across the United States were owned by women. Those businesses afforded jobs for 27.5 million employees and were responsible for the infusion of some $3.6 trillion into the American economy. The number of women-owned businesses across America increased by more than one hundred percent between 1987 and 1999. Those new businesses increased employment during that same time period by 320 percent, boosting their sales figures by nearly 450 percent. The Small Business Association data indicated that the burgeoning ranks of women-owned businesses outpaced general business growth nationwide during the last decade of the twentieth century.

Data published by the United States Census Bureau in March of 2006 indicated an enormous upsurge in the number of female business owners during the period from 1997 to 2002, which is the most recent time period for which they had statistical data. The increase was on the order of twenty percent, which is more than twice the national average for the same time period. Of the total number of women in the labor force, which considers both business owners and employees, nearly forty percent were in management or in professional occupations, more than thirty percent worked in sales, one fifth in service fields, six percent reported being employed at materials moving, production, or transportation-related jobs, and the remainder worked in maintenance areas. Two things are important in the interpretation of these statistics: there is a significant working population in the United States that does not appear on any census report because they are not American citizens. Those employees are most likely going to be at the lowest echelons of the world of employment; they are likely to laborers of some sort, whether it is in agriculture, factory or other types of production, or in maintenance, housekeeping, or janitorial types of jobs. The second important piece of information is that there are racial imbalances in the employment hierarchy: the upper employment echelons—management and the professions—are most likely to be occupied by white or Asian females. Hispanic and African-American females are most strongly represented in the sales and office staff positions. In addition, women generally earn less than men for performing the same jobs, even with commensurate (or greater) education, experience, and credentials. Census data indicates that the median salary for all employed women was roughly eighty percent of that earned by a man occupying the same job.

Although there are still some barriers to success in all industries by women business owners (and women-run businesses), enormous positive strides have occurred since Jimmy Carter signed Executive Order 12138. There has been a wellspring of means by which women entrepreneurs and would-be business owners can get training, mentoring, and small business incubation and development assistance. Numerous academic and policy academies have been created that are targeted to helping women-run business organizations flourish. Best practices guidelines have been developed and codified for female entrepreneurs and business owners and have been incorporated into undergraduate, graduate, and professional academic and training programs for women.

The National Foundation for Women Business Owners (NFWBO) reports that the top growth areas for women-owned businesses during the past two decades have been in the areas of construction, wholesale trade, transportation and communications, agriculture and agriculture-related industries, and in manufacturing. Women have moved away from traditionally female-associated occupations to occupy places of importance across the entire business spectrum. There is considerable research underway on the phenomenon of nontraditional women-owned businesses, but the published data suggests that a significant part of the reason that women who are successful management-level employees seek to become business owners concerns what has been termed the "glass ceiling" effect, in which women are only able to rise to a certain finite level in the traditional men's business world—if women wish to rise to the top of a business, it is far more likely to happen if it is owned and run by women as well.

FURTHER RESOURCES

Books

Characteristics of Women Entrepreneurs Worldwide Are Revealed. Washington, D.C.: National Foundation for Women Business Owners, 1999.

Credibility, Creativity, and Independence: The Greatest Challenges and Biggest Rewards of Business Ownership Among Women. Washington, D.C.: National Foundation for Women Business Owners, 1994.

Employment and Earnings: 2005 Averages and the Monthly Labor Review. Washington, D.C.: United States Department of Labor, Bureau of Labor Statistics, 2005.

Entrepreneurial Vision in Action: Exploring Growth Among Women-and Men-Owned Firms. Washington, D.C.: National Foundation for Women Business Owners, 2001.

Entrepreneurship: The Way Ahead, edited by Harold P. Welsch. New York: Routledge, 2003.

Periodicals

Anna, A.L., G.N. Chandler, E. Jansen, and N.P. Mero. "Women Business Owners in Traditional and Nontraditional Industries." Journal of Business Venturing 15 (2000): 279–303.

Brush, C. "Women-Owned Businesses: Obstacles and Opportunities." Journal of Developmental Entrepreneur-ship 2, 1 (1997): 1–24.

Davis, S.E.M. and D.D. Long. "Women Entrepreneurs: What Do They Need?" Business and Economic Review 45, 4 (1999): 25–26.

Editorial. "Census Report Shows Strong Growth Among Women-Owned Firms." Small Business Advocate 25, 3 (March 2006): 1.

Gundry, L.K., M. Ben-Joseph, and M. Posig. "Contemporary Perspectives on Women's Entrepreneurship: A Review and Strategic Recommendations." Journal of Enterprising Culture 10, 1 (March 2002): 67–86.

McGeer, B. "Bank Programs Target Women Biz Owners." American Banker 166, 87 (2001): 8–10.

Web sites

National Women's Business Council. <http://www.nwbc.gov> (accessed June 11, 2006).

United States Department of Labor. "Women's Bureau: Women in the Labor Force 2005." <http://www.dol.gov/wb/factsheets/Qf-laborforce-05.htm> (accessed June 5, 2006).

Women-21.gov. <http://women-21.gov> (accessed June 11, 2006).