Diversity – Feature Pushing for more diverse asset managers
The case for more diversity at pension schemes is a two-way street. Schemes not only have a role to play in facilitating BAME and female representation in their leadership, they can also become an important campaigner for more diversity at the asset managers and companies they invest in, Welsh believes. One attempt to do precisely that is the Workplace Disclosure Initiative launched by ShareAction, supported by, among oth- ers, NEST, Border to Coast, Local Pensions Partnership, North- ern LGPS, USS and RPMI Railpen. Border to Coast has made diversity one of its top three priority engagement themes and calls for businesses to improve the ethnic and cultural diversity of boards. The pool proposes that FTSE100 companies should have at least one director from an ethnic minority background by 2021. Diversity is also high on the agenda of Diandra Soobiah, NEST’s head of responsible investment. “When we are appointing new fund managers we ask them, as part of the selection process, to disclose their diversity policies for our consideration. “We want to see what steps they are taking to achieve diversity in terms on gender, ethnicity and backgrounds, and in particu- lar how they’re developing leaders through the organisation. “In the future we’ll be increasing the importance of BAME rep- resentation in our engagement with fund managers we work
Writing letters of support and posting statements on so- cial media does not absolve any company from taking the real action they need to. The entire investment chain needs to be examined and evolved, with pay and pension gaps for gender and ethnicity holding companies to account. Bev Shah, City Hive
with, seeing it as a way to promote doing the right thing and reduce our investment risk,” Soobiah says.
A multi-asset portfolio will be a mix of asset classes, curren- cies, sectors, market cap and geographies yet the majority of the people actually mak- ing the decisions are similar, whether it is their gender, ethnicity or schooling. Bev Shah, City Hive
The way forward
While pension schemes and asset managers appear to be full of good intentions, the data shows a different picture. The pen- sions industry still has a long way to go to develop a more diverse workforce.
PLSA guidance has put forward a specific set of recommenda- tions for schemes to take on the challenge. This includes con- textualised or anonymised recruitment practices, setting up LGBTQ or BAME company networks and offering enough space to spend time together on an informal basis. Campaign groups argue that this should not just be a voluntary tick-box exercise, the time has come for asset managers and pension schemes alike to commit to diversity and inclusion targets and to disclose not just the composition of their teams, but also the gender and ethnic pay gap. “Writing letters of support and posting statements on social media does not absolve any company from taking the action they need to,” Shah says. “The entire investment chain needs to be examined and evolved, with pay and pension gaps for gender and ethnicity holding companies to account.”
Issue 94 | July 2020 | portfolio institutional | 37
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