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Forgetting the lessons of lockdown

diversity, equity, inclusionCAMRADATA presents insight into its whitepaper on diversity, equity and inclusion following a panel discussion recently.

Requiring employees to return to the office nearly full-time shows that some of the larger asset managers have forgotten “lessons” learned during lockdown working conditions that were supportive of diversity, equity and inclusion (DE&I), a CAMRADATA roundtable recently heard.

Rima Sen, director at investment consultancy WTW, noted that some firms now request employees to go back to the office four days a week, which could impact parents.

“A lot of employees now get one day working from home, and that’s great, but it doesn’t allow mums to do the school run anymore, for instance,” she said. “It does feel like lessons are being forgotten quite quickly at some of the larger organisations.”

Jenny Fenton, member relationship manager at the Diversity Project, said flexibility in the workplace is key to inclusion. “I used to think it was about age and that young people wanted to be in the office and older people didn’t. Now I believe it is down to people’s individual neuro make-up and what suits them best,” she said.

But Julie Dickson, equity investment director at Capital Group, said it was important for some individuals to return to the office because the workplace provides a sense of community.

“That sense of community, belonging and inclusion are really important, especially for new people starting their careers and joining new organisations who are worried about how they might relate to their colleagues.”

CAMRADATA hosted the DE&I roundtable and participants – which included asset owners, managers, and consultants – discussed what DE&I means to them in their role and for the firms they work for.

Steve Butler, chief executive at consultancy Punter Southall Aspire, said it is important to him that his firm operates from a range of locations and that this lends itself to creating an inclusive culture. But he also highlighted that this could be more challenging at larger firms.

Lindsay Hudson, global head of inclusion and diversity at Aegon Asset Management, asked whether Butler thought the Covid-19 pandemic accelerated this “geographic democratisation”.

“Absolutely,” said Butler. “The adoption of video-calling technology enabled us to create project groups with no geographical boundaries or any other kind of boundary.”

He explained that video calls also aided the firm in engaging with neurodiverse or introverted individuals during the pandemic.

Investor expectations
The panel discussed the rise of DE&I and how to measure it. Dickson said ESG was a key driver for why investors place importance on DE&I. However, the panel acknowledged difficulties with measurement, with Dickson highlighting the problem of data.

“Investors want to be assured that the companies they are investing in are socially responsible and that is hard to measure. We have metrics like gender diversity, racial diversity, and age diversity and then the data kind of falls off a cliff,” she said.

“Investors want to be assured that the companies they are investing in are socially responsible and that is hard to measure.”

Dickson added. “The industry has a responsibility to push more metrics onto companies, whether that is listing requirements or investment requirements, to fill out the ‘S’ part of ESG, because it is still woefully under-measured.”

Data’s usage would enable companies to show a progression path – including for asset managers themselves when held up to scrutiny for their own practices.

“The key thing is: what is the path of progress? At this point in time, it might not look that great. But what did it look like two or five years ago?”

She added: “[Investors] want to see we’re doing something meaningful. It’s about what you can demonstrate [to] show your commitment to particular aspects of DE&I or ESG.”

Capital Group runs a biannual demographic survey to track internal progress qualitatively and quantitively.

WTW’s Sen said that often, multiple timeframes are needed for clients, and for some, it is important to highlight that change is generational and doesn’t happen overnight across portfolios.

“That is sadly not the starting point in the industry,” she said. “While year on year, huge swings in the data do not occur, that is to be expected with a genuinely meritocratic approach to things like decision-making and appointments.”

Sen added that she would be “concerned” if there were massive pendulum swings on some of the metrics overnight as there is a real risk of rushed box-ticking rather than long-lasting change. “What I want to see is the industry making sure we’ve got the right steps and policies in place.”

Butler said that fundamentally, qualitative data is what’s important, not hard data. “The worry with hard numbers is that they won’t be used appropriately.”

Penny Cochrane, senior investment research consultant at Hymans Robertson, agreed, adding that with demographic surveys, for instance, it comes down to culture and whether employees feel comfortable disclosing details of socioeconomic background, neurodiversity or sexual orientation.

“It is a bit of a double-edged sword. If they don’t feel comfortable in that environment, those metrics and data will look worse.”

lockdownReluctant disclosureThe role of communication is crucial here, argued Sophie Hulm, interim chief executive officer at financial services membership body Progress Together Historically, employees have been reluctant to disclose information about themselves and their background. “It is important to build trust with employees and assure them the information will be used in their best interest,” she said.

Sarah Miller, vice president, manager research at consultancy Redington, flagged that as little as 21% of asset managers currently report or internally examine socioeconomic factors.

“I don’t know if discussing whether data is important is productive when we’re so far away as an industry from being genuinely inclusive or diverse,” she pointed out.

Investors have certainly become less tolerant of firms taking too long to make changes, noted Capital Group’s Dickson: “People don’t really care how far you’ve come. They want to see how fast you’re moving. There’s a real conflict between wanting to address the problem quickly, but wanting to do it right, which takes more time.

“A lot of companies haven’t got their heads around measuring socioeconomic background or even measuring, for instance, how accessible their offices are.

“These things need to be thought through but take more time, even though they shouldn’t.”

To learn more, read the full version of the roundtable whitepaper.

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