Five principles for creating a positive culture and improving diversity
Maria Long, Content and Research Director at the SBA, explores how fund operators can demonstrate and assess diversity
Maria Long, Content and Research Director at the SBA POSTED ON 1/3/2022 7:10:53 PM
At the SBAI our mission is to improve industry outcomes and solve for better. We believe that diversity and inclusive cultures are vital for a thriving and competitive industry.
Through discussions in our working groups with our community of asset managers and allocators we are providing practical tools for organisations to put effective strategies in place.
Below we provide some insights from our work highlighting principles you can apply to your culture and diversity strategies, and how you can demonstrate or assess diversity in smaller organisations.
Principles of culture and diversity strategies
Your organisation will have your own culture and diversity priorities based on your personal objectives, organisation size, and regional location. We have developed five high level principles that can guide your strategy and be tailored to your organisation.
- Leadership: Senior leaders in your firm must be accountable for your strategy. As Leaders, you should take responsibility, drive the agenda, and be both a role model and an advocate.
- Strategy: Your strategy needs to be aligned with your business goals and supported by measurable and tailored action plans. Take stock of where you are today, identify your objectives, develop measurable and achievable action plans for your objectives, and ensure they are regularly reviewed, measured, and adjusted where necessary.
- Communication: Align your internal and external communication with your strategy. Make a public commitment to your diversity strategy. Engage with your employees regularly and honestly communicate your progress towards objectives. Ensure your firm’s public profile is in line with your diversity strategy – but – don’t put the entire burden on one senior diverse employee.
- Policies: Review your existing policies for alignment with your diversity objectives. Examine your policies and procedures for recruitment. Ensure performance reviews and career development plans are structured, and promotion decisions are based on objective criteria. Make sure your employees feel comfortable to raise any grievances.
- Inclusion: Evaluate people on skills required for inclusion. In interviews and performance reviews assess managers on skills required for an inclusive culture, for example ensuring everyone is heard and managing disagreements.
Beyond the metrics: demonstrating and assessing diversity in smaller asset managers
If you are a smaller firm, you may face some unique challenges when allocators assess diversity in your organisation, but you also have several important opportunities to improve diversity both at your firm and in the industry more broadly. As an asset manager you should leverage these opportunities and as an allocator you should ensure to engage on these efforts in your assessments.
- Leveraging personal impact: The impact of your leaders’ day-to-day actions are more visible in smaller organisations. Your employees pay attention to what they see more than what policies and procedures say. Setting the right example is even more critical and impactful for your leaders in a smaller organisation.
- Enhanced opportunities: Hierarchies and role descriptions within smaller firms are typically broader than in larger organisations. All opportunities in your firm, including admin or project-based roles, are likely to offer more exposure to the industry than similar roles in larger organisations. Offering these roles to individuals from different backgrounds can increase the opportunities for diverse candidates.
- Extending the concept of a firm: As a smaller firm you will typically use outsourced services to a greater extent than larger firms. Extending diversity policies to your service providers, such as fund directors, administrators, and law firms, can help diversity in the industry more broadly. It may also provide critical development and career advancement opportunities to non-traditional hires at your service providers.
- Industry initiatives and external resources: Keeping up with best practices can be difficult for your firm, you may not be able to dedicate specific resources, or you may have limited HR functions. External resources may be required. In addition, as a smaller firm you can increase your impact on diversity within the industry by supporting external industry initiatives or joining with industry efforts such as our SBAI Culture and Diversity Initiative.
- Allocator assessments: Quantitative metrics on the surface can allow you as an allocator to compare between different asset managers, but these can disadvantage smaller firms. Metrics may increase the chance of individuals being identifiable and one hire or departure can significantly skew these metrics. As an allocator you should make use of comparable qualitative questions to get an accurate picture.
We believe that no matter the size or location of your organisation, we can all make efforts to improve culture and diversity in our industry. At the SBAI, we are encouraged by listening to our community of asset managers and allocators and seeing their genuine desire to make real impact in this area. We will continue to focus on providing practical solutions to these issues.
To find out more about the topics discussed above, including case studies, and further information on our Culture and Diversity initiative – including our very first podcast “A Conversation on Culture” – please visit our Culture and Diversity Toolbox.
About the SBAI
We are a global active alliance of over 150 asset managers and over 90 allocators dedicated to advancing responsible practice, partnership, and knowledge. At our core is an active community committed to knowledge sharing, informed dialog, and innovation. Together our community of asset managers and allocators create real world solutions to tomorrow’s industry challenges. In short, we solve for better.
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