The CEO of the network for change in asset management City Hive has written to chief executives across the investment management industry calling for “impactful changes” in their approach to diversity.
City Hive CEO Bhavini ‘Bev’ Shah has written an open letter to over 100 fund group leaders highlighting although the support for inclusion campaigns, such as #IAM and #BlackLivesMatter, is encouraging, there is still so much more work to be done.
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“I remain disappointed by the lack of action the investment management industry has taken to address diversity and inclusion. To create impactful changes, firms must make significant cultural changes, and that starts at the top. Awareness does not equal action. The lack of tangible, measurable results, demonstrates where diversity and inclusion sit in terms of priorities,” she said in the letter.
“Improving diversity, be it gender, ethnicity, LGBTQ, education, socioeconomic, neurodiversity and so forth, should be embedded as a key business objective, not a nice to have once a year on International Women’s Day or when there has been a gross injustice. Diversity and inclusion matter 365 days of the year and should be ingrained in every companies prudent, sustainable management.
“While sustainability and ESG are the phrase du jour with many firms stating that it is ingrained in their DNA as investors and employers, we do not see firms meeting their own sustainability responsibilities by prioritising diversity to create a more inclusive and equitable industry. It is simply another form of greenwashing.”
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She added studies have proven that diversity of thought, experience and background create greater, positive, long-term outcomes.
“For an industry which is reliant on idea generation and innovation it is shocking that companies continually overlook these advantages. Chief executives talk the talk, regularly purchasing tables at awards, sponsoring events, posting on/during commemorative days/months, and acting as signatories to doctrines highlighting their commitment to improving diversity within their own firms and across the industry.
“However, without action, this is just box-ticking. Few, if any, can walk the walk. For example, annual publication of Gender Pay Gap figures does not signify a genuine commitment to closing the gap; it requires allocated resources, prioritisation into business objectives and a genuine commitment from the top down.”
Shah also shared her frustration that while Gender Pay Gap reporting was mandated to address inequality, the Government Equalities Office (GEO) and the Equality and Human Right Commission (EHRC) gave firms a “free pass” in March 2020 by suspending reporting regulations due to Covid-19.
She added the decision by many asset managers to not publish pay gap reports “underscores the lack of prioritisation and commitment to close the gap by the Government, CEOs and firms”.
She called the lack of action on diversity “another form of greenwashing” and criticised firms for “neglecting to support their most valuable assets; their employees, current and future”.
“Firms need to realise that attraction and retention of talent incorporates having a diverse and equitable culture and ensuring there are channels of growth for all individuals throughout the entirety of their career with their firm. Companies need to do this to reduce risk and futureproof their business, it is no longer an option,” she stated.
Shah concluded the letter urging CEOs to consider the “type of leader you want to be”.
“Do you want to be the chief executive that is forced to make changes, or do you want to be the leader that is part of the solution, investing in creating a long-term, positive, impact on this incredible industry. Change is happening now, join us at the table. There is room for all.”
