Any other business: The need for greater diversity across the pensions and asset management industry is evident, so what progress has been made so far to improve the situation?
Women outside the US are still typically awarded less than male chief executives, recent MSCI research shows; but the study also found that there is a potential shift to gender pay parity in the US, with women averaging $10.5m (£8.4m) in total realised pay compared with $7.3m (£5.8m) for men.
Change will be gradual rather than immediate over the next five years
Helena Morrissey, Investment Association
Gender equality is not the only issue. Ethnicity, sexual orientation, age, disability, socioeconomic and educational backgrounds are all part of a general push to improve diversity across the board.
Alison Jefferis, head of corporate affairs at investment management company Columbia Threadneedle, said: “The asset management industry has a real opportunity to be a driving force for diversity in financial services.”
The industry is making progress...
But which organisations are actually getting involved, and is it making a difference? In 2016, a group of leaders in the savings and investment industry established the Diversity Project, which aims to increase diversity and improve inclusivity in the investment profession.
Among those involved are the Pensions and Lifetime Savings Association, consultancy LCP, BBC Pension Trust, Willis Towers Watson, and Columbia Threadneedle.
Source: MSCI ESG Research
Helena Morrissey, chair of The Investment Association and member of the Diversity Project’s CEO advisory board, explained that “much progress has already been made to address specific aspects of the problem” through initiatives including Investment 2020 and LGIM 50/50. Individual member firms are also making efforts when it comes to recruitment, for example.
...but further change is needed
“However, further change is needed to tackle the problem once and for all,” said Morrissey. She said the scale, scope and ambition of the Diversity Project were unprecedented within the industry.
“By working together, towards a common goal, we hope to create an even more powerful and influential voice for change,” she added.
Nevertheless, “change will be gradual rather than immediate over the next five years”, noted Morrissey.
“Specific measurements of success will include driving asset owner initiatives, improving the conversion rate of diverse talent, and encouraging a new approach to recruitment,” she explained.
Promoting diversity
Kim Newell-Chebator, chief administrative officer for EMEA at State Street, agreed “there has certainly been a positive move from companies being accepting of diversity to actively promoting it”.
For example, she noted that accommodative benefits packages were increasing. “Companies that offer flexible work arrangements make it easier for women and men to engage more fully and pursue their careers more aggressively,” she explained.
She added that initiatives such as mentoring and personal development programmes “are becoming increasingly recognised as a key tool to promoting diversity”, while greater emphasis has also been placed on diversity during the recruitment process.
Pension funds need to push for board diversity
However, “it is equally important that pension funds achieve board diversity themselves, to better represent the interests of their own members”, added Newell-Chebator.
“There’s a lot of work to do, but the industry is certainly on the right trajectory to achieving it,” she concluded.
Let's diversify investing
The world is a diverse place full of wonderful differences in attitudes and opinions. For example, Ethiopia follows a calendar that is seven years behind the rest of the world.
Jane Welsh, senior investment consultant at Willis Towers Watson, said many savings and investment companies “recognise that it’s a rather white, male, middle class industry”, and that “it’s important to appeal to a broader range of talent”.
Recruitment changes
Welsh noted that there has been a shift towards hiring people who studied finance at university. Consequently, people studying other disciplines sometimes avoid looking for jobs in the investment industry.
The industry should not only change its image to be more inclusive, but also needs to make sure that companies’ recruitment processes are consistent with that message, said Welsh.
Some might argue that companies claim to be improving diversity as part of a sales strategy. However, Welsh insists that the efforts being made to increase inclusivity are genuine, but admitted that being able to attract “diverse talent into the industry is hard, which is why we need to work together on it”.
