Diversity and inclusion (D&I) initiatives at asset management firms will struggle unless governance structures are put in place, a CFA Institute report has said.
The institute report, Accelerating Change: Diversity, Equity and Inclusion in Investment Management, compiled results from the CFA’s Experimental Partners Program, which collected quantitative and qualitative D&I data from 41 investments firms representing $26trn in assets under management and more than 230,000 employees.
Some 73% are investment managers, 15% are asset owners, and 12% are data or service providers to the industry. Firms include Franklin Templeton, Vanguard, Invesco and Lazard Asset Management.
The report found participants “struggled to progress far” with D&I initiatives without first establishing more inclusive governance structures. Only after these were put in place could plans and recruitment drives be carried out.
These structures usually started with establishing a global D&I committee of global inclusive leadership council, the CFA Institute found, followed by regional committees that report into global ones.
“Typically, these were made up of key leaders from various areas of the business and were described by one organisation as ‘our biggest success’,” the report said.
See also: – The dos and don’ts of diversity data
Some 88% of the firms in the report have employee resource groups (voluntary, employee-led groups that look to foster a diverse, inclusive workplaces). Another key governance effort was creating a comprehensive structure for these, with assigned executive sponsors for each group.
“Governance can start with only tepid support from boards, but sustained support is important. Visible, educated CEO commitment is crucial to this work, and ideally it is reinforced by board support,” the report said.
“The main outcomes of these governance initiatives are increased impact, accountability, and transparency.”