As more and more companies become concerned with issues associated with environmental, social and governance factors (ESG), the diversity of the staff and management at the investment firms they chose to work with will become more and more important.
Third, today’s investor and workplace is changing. And with that change comes the desire to work with an investment partner who is equally diverse. In fact, as more and more companies begin to change the composition of their board to reflect the changing demographics, this is only going to become more of a factor.
Then there are the next generation of companies, those led by millennials or those that are in newer sectors like renewable energy and technology as an example. According to a 2020 article written by Jessica Barron in Diversity Jobs, millennials will “make up 75% of the workforce by 2025, and their ideas about diversity are far more nuanced than their predecessors’… They’ll also have Generation Z—the most racially diverse generation in American history to back them up. By 2020, 50.2% of children under 18 will come from a minority ethnic group.” The simple fact is, if we fail to address their concerns, we will fail as an industry.
So, how do we fix this problem?
Earlier this year, I participated in a panel discussion on diversity—hosted by my alma mater, Indiana University, where I was joined by two other senior-level women to discuss this issue. One of the topics that came up was the influence of unconscious bias—things that we might instinctively think about a person, a process or an idea.
First, it’s important—and this is really hard—to recognize that we all have these biases. I would encourage everyone to think about what biases he or she may have, and then think about how that may be influencing their decisions or their perceptions in hiring and promoting diverse candidates into positions of senior leadership.
Second, being purposeful makes a difference. I’ve seen how putting a specific focus on including diversity of thought and experience at leadership levels can lead to great results. We have a need and a desire to work harder and that starts at the top. We can’t expect this to spread in our organizations if we, as executives, don’t commit to it first
But that’s only part of the equation. As one of the participants in the University panel shared, commitment to hiring and promoting diverse candidates is part of the solution. Once those employees are in the organization, in order to reap the benefits, you need to foster an environment where they feel that they can bring their authentic selves to work.
Change is hard. Change takes work. Change can be scary. But if our industry is to thrive, everyone from the C-suite, to the fund managers to the support teams needs to adapt. Those that do will create great cultures that enable success for employees, shareholders and clients. Those that don’t, much like the business books I read at Indiana, will end up as case studies.
Christine Hurtsellers is CEO of Voya Investment Management.