Foreword by Bo Howell (July 2020)
Ever since my service in the U.S. Navy nearly two decades ago and continuing through my time in both the federal government and private companies, I’ve experienced the benefit of serving on a diverse team that bonds together to achieve a common goal. As a father in a multi-racial family, I want to serve as a role model for my sons, my community, our industry, and beyond. My partners and I founded Joot as a diverse company, and that diversity is central to our ability to serve our clients and their needs. As we grow our company, we continue to seek variety in our people, partners, and clients. We all have unique ways to contribute to the growth and success of our industry. As a technology disruptor, Joot wants to attract a diverse group of revolutionaries who are determined to think differently. We are richer for it!
By Dina Tantra
Diversity and inclusion have a positive impact on all businesses and the asset management industry is no exception. Companies with a diverse and inclusive staff are able to better identify with and understand a wider range of clientele, which then enables them to be more creative and innovative in the ways they help those clients.
Welcoming diverse perspectives also provides a way to engage associates at all levels of the firm. This contributes positively to employee morale and leads to suggestions and solutions that may not have been previously considered.
In short, companies accrue both external and internal benefits from adopting a strong culture of diversity and inclusion. The need to embed this way of thinking into a firm’s strategic plan and operating model is not a new dilemma and was a hot topic of conversation at some recent industry events I attended.
Joel Motley (Invesco Funds) and Mary Davis Holt (American Funds) conducted a fireside chat about improving diversity on boards at the Independent Directors Council (IDC) conference in Chicago in October 2019. The discussion was very interactive, with the audience suggesting ways to push for diversity not only at the board level but also within the asset manager role. The focus was on the following initiatives:
- Incorporating diversity and inclusion concepts into human resource strategy, leadership and culture
- Building diverse teams to yield better performance, display less groupthink and increase innovation
- Identifying inclusive behaviors such as commitment, courage, cognizance, curiosity, cultural intelligence and collaboration
- Enabling success of all board members after appointment
Financial Regulatory Agencies Summit
The next day, the Financial Regulatory Agencies held their own Diversity and Inclusion Summit, sponsored by the Office of Minority and Women Inclusion (OMWI). Under the Dodd Frank Act, the OMWI was created in order to develop standards for assessing policies and practices of financial institutions regulated by these agencies (Federal Reserve, SEC, Consumer Financial Protection Bureau, SEC, Office of the Comptroller of the Currency, FDIC, and the National Credit Union Association).
The keynote speaker highlighted several key issues facing the financial services industry, including micro-inequities, unconscious bias and the need to understand cultural differences and intersectionality. Some individuals are paving the way, such as Tim Ryan (US Chairman of PwC), who established a CEO pledge in order to hold companies accountable for embedding diversity and inclusion into their corporate strategy. Fortune 500 boards are including more women on their boards, but there are many more opportunities to bring diversity and inclusion to the board table. Many of these companies are also engaging Chief Diversity and Inclusion Officers to implement further initiatives. There was then a discussion about what individual associates can do to move the needle. The most critical was to convert the “nice to have” into the “need to have” diversity in order to improve business economics. This was a similar theme addressed by Dr. James Johnson, a noted professor at UNC-Chapel Hill at the Cohen & Co. conference when he spoke about the changing demographics of the US and its impact on the asset management industry.
The next speaker provided extensive data compiled and synthesized by Mercer in which they segmented financial services labor markets by race and gender. Mercer evaluated the path of associates, looking at current hires, turnovers and promotions. While too rich and robust to summarize in in this blog post, two key takeaways were resoundingly clear: taking no action towards intentional diversity and inclusion will lead to a reduction in women executives; and proactive and thoughtful levers in hiring, promotions and turnover rates will make a positive difference in gender equality. This speaker also provided numerous concrete and actionable recommendations:
- Target diverse slates of candidates
- Understand key experiences necessary for an associate to succeed
- Ensure all associates get broader exposure to such experiences
- Identify the drivers of retention
- Evaluate firm culture
- Promote inclusion
- Scrub gender language from selection criteria
- Compare resumes on a “blind” bases without bias
- Leverage data to drive accountability and change
- Ask an associate why they like being here and what makes them stay
- Sponsor associates for the next step
Business leaders participated in the next panel, most notably John Rogers, Jr., Co-CEO of Ariel Investments. The panel highlighted the Chicago Financial Services Pipeline initiative which is a coalition of Chicago-based financial institutions working to increase the representation of Latinos and African-Americans at all levels within the Chicago financial services industry. Examples of how the organizations tackled diversity and inclusion strategies were rich and robust. Cynthia Bowman, Chief Diversity & Inclusion Officer of Bank of America, stressed how diversity and inclusion is embedded in the bank’s strategy and culture. John Rogers, Jr. emphasized the need for sponsorship, elevation within the community, attracting and retaining talent and using buying power to push suppliers and external partners to demonstrate diversity within their own organizations.
Prior to the networking event, the federal regulators conducted a panel to solicit feedback from the audience as to how they could encourage further participation in the optional self-assessment process for diversity and inclusion.
Looking forward to 2020, the initiatives and recommendations cited by these organizations are excellent steps we all can take to move the needle. It will require conscious and deliberate effort though. I recall a recent conference I was invited to attend as an outside guest with the express purpose of gaining insight into this particular business segment. However, during one of their discussion sessions, the setup was structured in a way that actually inhibited my participation. Rather than feeling like I could join the conversation, I felt somewhat excluded. Not only did I gain less than I could have, this was also a missed opportunity for this group to incorporate an outsider’s perspective.
Despite this one less than optimal experience, I remain confident that our industry is moving in the right direction. Whenever there is an opportunity to be inclusive, we must seize upon it. This is the philosophy I have adopted and that we at Joot aspire to model in our words and actions.
To quote a poem by Dr. Benjamin E. Mays, “I have only just a minute, only sixty seconds in it. Forced upon me, can’t refuse it. Didn’t seek it, didn’t choose it. But it’s up to me to use it. I must suffer if I lose it. Give account if I abuse it. Just a tiny minute, but eternity is in it.