CFA launches DEI code to accelerate change in investment organisations

The Chartered Financial Analyst (CFA) Institute has launched the UK edition of its voluntary Diversity, Equity and Inclusion (DEI) code for the investment profession.

The DEI code is available to investment organisations in the UK of any size who seek to accelerate change by fostering a commitment to DEI.

The CFA said that signatory firms will commit to six metrics-based principles intended to enable the greater inclusion of wider viewpoints from the best talent, in turn leading to better investment outcomes, better working environments, and a cycle-positive change for the future.

The six principles are:

• Pipeline: expanding the diverse talent pipeline;
• Talent acquisition: designing, implementing, and maintaining inclusive and equitable hiring and onboarding practices;
• Promotion and retention: designing, implementing, and maintaining inclusive and equitable promotion and retention practices to reduce barriers to progress;
• Leadership: using an organisation’s position and voice to promote DEI and improve DEI outcomes in the investment industry;
• Influence: using an organisation’s role, position, and voice to promote and increase measurable DEI results in the investment industry;
• Measurement: measuring and reporting on CFA’s progress in driving better DEI results within the Institute.

Reporting requirements

The code requires signatories to provide a confidential, annual progress report to CFA Institute using an accompanying Reporting Framework. In turn, the institute said it will report on industry-level statistics once a critical mass of signatories is reached.

Within two years of becoming a signatory, organisations must establish senior leader ownership and an oversight governance process. Signatories must also develop a formal, written, publicly available communication outlining the organisation’s DEI strategy, policy, commitments and high-level objective.

Lastly, the signatories must have an implementation plan to integrate DEI within the signatory organisation’s people, processes, and policies.

North America DEI code

The UK DEI code follows the successful introduction of a DEI code in the US and Canada last year. The code has been adopted by more than 160 investment organisations to date, representing $18.3trn in assets under management (AUM) – 19% of the investment industry’s AUM globally.

To devise the UK DEI code, the CFA Institute worked with CFA Society UK and a DEI Code (UK) Working Group drawn from UK-based investment and DEI leaders in the UK, chaired by Lindsey Steward, director of investment stewardship research at Morningstar.

The working group has built on the strong foundation set by the DEI Code in North America and adapted it for the DEI challenges and opportunities specific to the UK.

Steward said the working group has given “a lot of thought” to encouraging signatories to raise their ambitions on DEI, but without introducing a “long list of prescriptive requirements”.

The code, he said, is designed to be scalable across a range of organisation sizes and structures and emphasises how important it is for signatories to demonstrate progress over time.

Steward stressed that the aim is a cultural change, not a “tick-box” compliance.

He said: “My sincere thanks go to the entire group for their determined efforts in getting the code to this stage, and for bringing a wide range of perspectives and experience to our conversations on how to develop truly inclusive cultures in the investment management industry.”

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