Calculating diversity’s return on investment isn’t easy, but an increasing number of financial companies are seeing value in broadening their outlook to include more women and underrepresented minorities.
A group of global investment companies kicked off The Diversity Project last year to woo a broader range of employees. The effort is based in London and its members include approximately 30 global financial organizations, such as Allianz Global Investors, BBC Pension Trust Ltd, Fidelity International, HSBC Global Asset Management and Invesco Perpetual.
The group is chaired by Helena Morrissey, who recently left Newton Investment Management to join Legal & General Investment Management, the UK’s largest asset manager. Morrissey is also the founder of the 30% Club, whose goal is to make UK’s boardrooms at least 30 percent women.
Morrissey, 50, doesn’t start her new job until May 1. In the interim, she is finishing a book, “A Good Time to be a Girl: How to Succeed in a Changing World,” for publisher William Collins, an imprint of HarperCollins.
“Recent events have left many despondent about the prospects for gender equality, but I believe it’s an exciting time to be a girl,” she wrote in an announcement of the impending volume. “In the book, I’ll be … exploring how a more unified approach is developing between men and women, so that we can work together toward a happier and more equitable society.”
Diversity Project steering committee member Karis Stander says one of her goals for the organization is to ease entry to the investment world for those who didn’t graduate from prestigious universities. “There should be places for people who come from lesser schools. Otherwise, you limit and narrow the pool of talent. I’m a passionate believer that grades aren’t a good barometer of success,” says Stander, managing director for Investment2020.
Too many women and other under-represented groups equate the world of asset management with Leonardo DiCaprio and The Wolf of Wall Street, says Ole Rollag, CEO of investment research firm Murano and another Diversity Project steering committee member.
“We’re desperate to get more diverse employees into asset management,” he says. “You walk down the street in New York and London, and you see all sexes, races and religions, but I don’t see that kind of diversity in my offices We mostly attract white men, but intelligence isn’t just enjoyed by white men.”
Last spring, State Street Global Advisors (SSGA) put its money behind promoting women when it launched a large-cap SPDR SSGA Gender Diversity Index ETF with a ticker tape SHE. The California State Teachers’ Retirement System, CalSTRS, seeded the ETF with an initial $250 million. Since its inception nine months ago, the ETF has made 10.60%.
In its sales literature, SHE points to a 2015 study from MSCI about global trends in gender diversity on corporate boards. The study showed that companies with at least three women on their boards of directors earned an average of 10.1% return on equity compared with 7.4% for companies without a critical mass of women at the top.
Similarly, a 2011 study for nonprofit Catalyst, which promotes opportunities for women, found that return on equity for companies with three or more women board directors was 15.3% compared to 10.5% for companies with no women board directors. )
For many women, climbing that far up the ladder is the toughest challenge. To consider that issue, SSGA is co-sponsoring the 2017 Diversity Forum with CalSTRS and California Public Employees’ Retirement System (CalPERS). The day-long event on
May 10 in Sacramento is open to interested attendees from both public and private companies.
Other similar events that aren’t open to the public include:
“Tearing Down the Pink Wall: Women, Wealth and Workplace in New York City,” sponsored by public relations firm DAI Partners. “We have been working in financial services for more than two decades and we think this is a topic that needs to be aired,” says Partner Angela Dailey.
SSGA and CalSTRS also are co-sponsoring a second “Beyond Talk, Taking Action to Achieve Gender Balance in the Financial World” networking workshop aimed at selected industry participants. The event will be held in Los Angeles on March 8.
By Jennie L Phipps