July 8, 2021
- The courage to act, commitment to lead, and conviction to change is what is necessary to successfully implement a DEI effort.
- Dance analogy:
- Diversity – Being invited to the party
- Equity – Being asked to dance
- Inclusion – Being asked what kind of music you want to dance to
- Often times, the terms are treated as one; when trying to make change, you must have separate policies.
- DEI must be assessed internally and for clients/externally.
- The former is imperative to serve the community as well as increase performance.
- Externally, diverse teams are more profitable, as research shows, adding ~20 basis points per year.
The Evolution of DEI:
- In the past, diversity was about representation – affirmative action. The conversation and resulting engagement are different now, i.e. much more prevalent. “The stakes have gone up.”
- Equity among people is the most important now. This is increasingly more business-specific vs. past DEI considerations.
Impact on Recruiting and Retention:
- Is it moving beyond race and gender? Yes, DEI is also about the expanding talent pool.
- Clients, communities are diverse; businesses have an impact on their community and that is import for their business.
- 30-40% of Generation Z individuals are non-binary. Losing people is expensive.
Best Practices for Asset Managers:
- DEI is part of the due diligence process. Must think outside the box and engage with managers.
- Share information. Recruiting is one way to start, but have to start to build a pipeline of talent.
- Have measurable near-term goals and be able to measure progress. Remove biases from systems and processes.
- Use the firm’s stature: be deliberate with your DEI strategy.
- Expand partnerships beyond typical recruiting colleges.
- Engage with clients re. workforce diversity on stewardship, etc.
- Social impact in underserved communities; look holistically at DEI.
- DEI is key to success – all employees are accountable. Resources – surveys, exit interviews, real talk conversations, attrition, benefits, employee resource groups; test the direction the company is moving in.
- Some corporations share information publicly and with prospective clients. Use consultants to review policies.
- Create a DEI council and relevant committees based on employee feedback.
- Asset owners should measure their diversity; it is not always easy to do but imperative to know where you are today. Look at leadership team and investment committees to assess diversity.
- Create/assess future plans.
The Future of DEI
- Varies a lot by country; no one size fits all, other than gender diversity. Other ways to measure: expats, neuro diversity, age diversity.
- Diversity is part of succession planning, as well as community partnerships.
- Age diversity – return to work programs for people out of the work force; military programs help with age diversity.
- Be aware that some information cannot be disclosed due to privacy rules.