To be able to recruit the best talents in future, asset managers need to increase diversity and inclusion in their ranks now, the industry was told by panel members at the IPE annual conference in Vienna this week.
“If asset managers do not keep up with other industries regarding diversity and inclusion it will be difficult to hire good diverse people,” predicted Helen Price, co-chair of the Asset Owner Diversity Charter – an initiative founded two years ago with the goal of getting asset owners to engage with their asset managers on diversity and inclusion.
Ric van Weelden, acting chair of the advisory committee of Diversity Project Europe, agreed, saying: “It makes sense to cast the net wider for more diverse talent.” He pointed out that looking back on his long career in the financial industry he can conclude that the industry is “almost kind of an all-boys club from a certain strata of society”.
He also noted: “The industry is looking at a complex landscape that is only going to get more complex looking forward and this will be easier to tackle with a diverse workforce.”
The Diversity Project Europe counts around 110 asset management companies as its members.
Price added: “We saw asset managers engage with companies about these issues but we did not see these discussions in the industry itself.”
Currently, the charter is gathering data on diversity policies in the asset management industry. Initial results show that many have diversity strategies in place and some are linking diversity and inclusion targets to remunerations as key performance indicators (KPIs) for the company.
However, Price said that while a lot of companies noted that mentoring and sponsorship was important to further diversity and inclusion, “none were tracking how many employees were making use” of such schemes.
She also pointed to various studies showing that more diversity on decision-making panels leads to better investment decisions and even outperformance of peers.
Price conceded that “diversity is even worse among some asset owner trustee boards”, particularly on a municipal level. But she said the charter wanted to focus on the investment case first. “I hope that by osmosis this will self-absorb to the asset owners.”
Increasing diversity on pension boards is also why Petra Hielkema, chair of European Insurance and Occupational Pensions Authority (EIOPA), wanted to include diversity and inclusion into the organisation’s technical advice on an IORP review.
“How can we reach more people to save for their pension when people on pension fund boards only understand a certain group of people?” she asked during the panel discussion.