ESG industry view – #TalkAboutBlack
Justin Onuekwusi is a fund manager and founding member of the #TalkAboutBlack initiative
HOW THE FINANCIAL SERVICES INDUSTRY CAN SUPPORT THE BLACK LEADERS OF TOMORROW
Creating a diverse workforce has moved to the top of the agenda for companies around the world recently following long- overdue discussions on systematic racism.
While some organisations have been try- ing to create a more inclusive environ- ment for some time, it is clear that taking the necessary steps from good intention to real change has been a significant and common challenge. Too often companies remain trapped in the enquiry and listen- ing stage rather than implementing the recommendations that arise from them. The financial sector, including the pen- sions and investments industry, has made some encouraging moves in awareness and representation but we must not see this as a fait accompli. Even with our breakthroughs, the UK asset manage- ment workforce woefully underrepre- sents the diversity of the UK population. For example, 13.3% of Londoners are black. But at asset management companies – which are mostly London-based – only 1% of employees are black. To put these fig- ures into something more tangible and shocking – according to a report by New Financial (Diversity in portfolio manage- ment) there were only 12 black portfolio managers in the UK in 2018. This surely begs the question: why?
30 | portfolio institutional October 2020 | issue 97
Kinks in the hosepipe Black people are underrepresented in financial services not because they are inherently less talented, intelligent or hardworking. That is clear. There are four drivers of this inequality – or ‘kinks in the hosepipe’ – that keep black people out of the industry, deny them of certain oppor- tunities and stop them from progressing.
Pipeline – The socio-economic environ- ment that many UK-born black people are in makes social mobility incredibly diffi- cult. The poorer you are, the less likely you are to get a good education. The stats also show that the education system lets black people down with teachers expecta- tions being low which manifests itself in black students being the most likely eth- nicity to have their grades under-predicted by teachers and black British Caribbeans being more than three times more likely to be excluded from school. In the UK, this affects black people significantly more than white people as they are twice as likely to live in poverty. All of this makes it even harder to secure profes- sional jobs because they may not have the necessary requirements.
Entry – Black people who get a good edu- cation are still less likely to secure their preferred job and this problem is two- fold. Not only are black people not getting through when they do apply, but they are also put off from applying to certain industries in the first place. This is because they don’t see people who look like them. Role modelling is a bit of a self- fulfilling prophecy in this regard – you can’t be what you can’t see.
Progression – If black people do enter the industry, they typically end up in support functions and find it incredibly hard to progress to leadership or revenue-gener- ating positions. Currently, I know of only three heads of distribution who are black and only two black professionals in C- suite positions.
Taboo – Whilst people are becoming increasingly comfortable discussing issues relating to gender and sexual orien- tation, race remains a taboo subject, which stifles discussion which is neces- sary for change.
Unwinding the kinks To address these challenges, #talkabout- black has created several initiatives, including events, panel discussions and media initiatives, to break the taboo and keep the conversation going. We are also building programmes and mentor schemes to help black school children and young professionals to enter the asset management industry and progress to C- suite jobs.
The #talkaboutblack ‘EnCircle’ mentor- ing circles for those that have up 10 years’ experience have been fundamental in helping career starters establish a sense of belonging in the industry, share experi- ences and receive advice from senior role models. But we all have an important role to play. To genuinely embed diversity, I believe it is down to all ethnicities to build a more inclusive corporate culture. That begins by ridding ourselves of the much maligned BAME acronym and under- standing the lived experience of different ethnic groups in the workplace; consider- ing all ethnic minorities in aggregate risks ignoring the different experiences of each community and individual. Compa- nies must also showcase role models from different backgrounds and can sup- port communities that have historically been under-represented in business and management.
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