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By: Frank Sommerfield, Tara Chiarell and Shane Winn
When your company is asked, “what are you really doing about social and racial equity?” the best response probably isn’t simply to list all initiatives that are in play and ones that are planned. Be a bit more earnest and remember that most organizations haven’t done enough to begin to reset the tradition of inequality. This is particularly true in the investment management space, where 99% of the assets managed by the U.S. investment industry are overseen by white, male-owned firms, according to a 2019 Knight Foundation analysis cited in Fortune.
The topic is on a lot of people’s minds these days. And we believe the perspective and mindset to address such important conversations should impart the idea that “while we’ve worked to make some strides, we have not done enough, and we are committed to developing and implementing a strategy to move the needle.”
Only after you put forth that qualification (as long as it’s true), can you let the world know what your company has done and plans to do to provide accountability.
Of course, you really have to mean what you say about diversity and racial justice in your organization and show tangible action in order to be taken seriously. If you’re only applying band-aids, you’ll have a whole other set of problems. There must be an authentic commitment to furthering social justice – one that is a true organizational priority.
The urgency of this kind of reckoning spans all industries, but it may be particularly acute in asset management and financial services overall (industries where the “Our People” sections of company websites are overwhelmingly male and white). Further, we believe it is just as important for CMOs to come to terms with the situation as it is for CEOs, COOs, CHROs and CIOs to do so.
Asset management CMOs are charged with channeling the nuances of the marketplace and helping ensure a firm’s outward messages are honest, empathetic and inclusive. There are a few points CMOs must keep in mind when making their case to leadership about social, racial and gender equity (note: if they’re not making a case at all, then they’re doing their company a major disservice).
CMOs must drive home the need to build true equity and diversity in their ranks, at all levels – and remind leadership that this not only takes time, but also significant investment and, perhaps, rethinking and re-making approaches to recruiting, training and promotion. It’s not acceptable to say, “we just can’t find people.” If you’re struggling to find diverse people for senior-level positions, you can nurture that kind of talent from the ground up -- summer interns and first-year hires, for instance. People need the chance – and then the unencumbered runway – to work their way up and help transform the organization and mentor on their way.
First, racial and gender equity are proven, in many cases, to pay off in terms of improved investment returns, meaning how well investment firms do their work and serve their clients. That’s especially the case with diverse investment managers in the private investment space; they’ve been shown to bring perspectives and points of view to the table that generate alpha. (And, if alpha is a zero-sum game, then original and lived perspectives are critically important.)
As we continue to contemplate social and racial equity in the investment industry, we hope that honesty, authenticity, proactivity and farsightedness will emerge as the priorities.
Frank is an expert in institutional and corporate positioning, communications strategy development, financial communications, business thought leadership, editorial services, crisis planning and media training
Tara Oversees all operations of the DC office, she has built a strong business spanning the full suite of integrated marketing services Allison+Partners has to offer.
Shane has two-decades of experience in consumer public relations, brand development and corporate communications on both client and agency sides of the business. As general manager, he is responsible for business operations, growth, client relations and staff development for the Chicago office.