While the concept may be a political hot button in some quarters, the financial world is embracing diversity, equity, and inclusion. More than 100 finance industry organizations worldwide have signed the voluntary DEI Code, an initiative the CFA Institute launched last year.
Organizations who have signed on represent about $11.2 trillion in assets under management, roughly 10% of the industry’s global total. Signatories include the California Public Employees’ Retirement System, Cambridge Associates, Nuveen, LGIM America, Alberta Investment Management, the California State Teachers’ Retirement System, the Massachusetts Pension Reserves Investment Trust, Northern Trust Asset Management and Wellington Management.
The code revolves around signatories filing to the CFA Institute confidential annual reports on upholding six main principles: expanding talent pipelines; hiring and onboarding; promoting and retaining personnel; leadership accountability; fostering DEI throughout the industry; and constant measuring and reporting of progress.
The CFA Institute has agreed to aggregate data from the reporting and to provide new industry-level DEI action data, beginning in the second half of this year.
Margaret Franklin, the CFA Institute’s CEO and president, described the organization’s goals in a statement: “We launched the DEI Code because we recognize that diverse perspectives lead to better outcomes—better outcomes for investors and better outcomes for society—and create an inclusive investment industry that will better serve and be more reflective of society as a whole.”
Research, including a PwC Global survey that found 85% of financial services CEOs said DEI helps improve corporate performance, backs up the sentiment that diversity leads to better outcomes. Another bolstering study, from McKinsey & Co., indicated that top-quartile companies for racial and ethnic inclusion outperformed those in the fourth quartile by 36% in profitability.
The fact that major organizations in the financial world are intent in furthering DEI—and measuring their progress—is a plus sign for the movement.