“Diversity is being invited to the party; inclusion is being asked to dance.” – Verna Myers, diversity and inclusion expert
Castle Hall was pleased to attend the recent AIMA / Women in Capital Markets roundtable on Diversity & Performance. We picked some highlights from the insightful conversation:
Lack of diversity emerging as a source of potential risk: Diversity is no longer a “nice to have” as a way to drive innovation and decrease groupthink. As clients and governmental / regulatory agencies increase demands for transparency and disclosure, lack of evidence of diversity across levels of seniority and functions is beginning to get firms noticed. If you are an asset manager looking for an allocation (or to retain an allocation), you probably don’t want to be singled out as a diversity outlier, especially as investors are discussing how to use ESG frameworks to measure and rank asset managers on a ‘good corporate citizen’ scale. How would your firm rank?
Diversity is a journey: Start out by measuring specific areas and then problem solve to determine how to tackle each area to drive the desired result. For example, one way representation can be measured is across the pay scale and promotions. What about making mentorship opportunities available to junior team members, whether within your firm or via external resources. Have you thought about a succession planning framework that drives diversity?
Diversity drives performance: Asset managers with a diverse team and collaborative culture are increasingly seen as those who make better investment decisions. Diverse asset managers are likely better equipped to navigate new paradigms: a unified team with a “lateral thought” approach is already putting together frameworks for scenarios that don’t yet exist.
Filter your bias at recruitment: Savvy firms are looking at better ways of recruiting with a focus on critical skill sets and moving away from traditional “it’s who you know” network recruiting. Unilever was cited as an example: the firm increased diversity in only two years by shifting their recruiting process away from traditional job fairs / relationship building with recruiters to online games that screen for specific desired skill sets: e.g. risk appetite, emotional intelligence, IQ, etc. A great tip is to shorten the number of criteria on a job posting: what are the top 5 things a new recruit should bring to your table?
Many thanks to the panelists and to the organizers for a successful event! We are looking forward to seeing evolving diversity in practice as we conduct due diligence on asset managers across the globe.