No surprise there. We know this. So why am I sharing? This article is packed with statistical evidence of the problem PLUS firm evidence of the gains to be had from diverse teams. It's seeking to speak to the financial industry in terms it relates to. To me though, the power of this is not just the stats, and the irrefutable business case, it's that it gives HR a position to talk about the hard stuff that is blocked by deflection around evidence or lack thereof. This means HR can say.... it makes NO sense NOT to do this. To ask... so why are we not doing it? To have that conversation. The difficult one. The one that tackles deep entrenched bias. So deep it seems ok and normal, when we all know it is not.
If you sit in the financial industry, are seeking to secure budget for programmes to support underrepresented groups, and your leadership still, even after recent events, need convincing this article has what you need.
For example, "the Teacher Retirement System of Texas (TRS) places more than half its assets with minority- and women-owned managers, and over the past three years has outperformed the system’s own performance benchmarks by as much as 2%—which, as any investor will tell you, is a huge amount of “alpha.”".
There has been progress with gender equality in the financial sector. That is good. Perhaps we will now finally start seeing progress with ethnicity equality. Although please, let's speed it up this time.
Key facts and stats:
- only 1% of Fortune 500 CEOs are black.
- only 9% of law firm partners belong to racial or ethnic minorities.
- only around 33% of Apple staff are women.
- even junior positions such as analysts and associate managers are more than 70% white.
- Women, meanwhile, make up only 8% of professional investors.
Photo features Erika Davies who is a Fellow, Equitable Access to Capital Markets in the Fair Finance portfolio with the Beeck Center for Social Impact + Innovation at Georgetown University.
Firms owned by white men manage a stunning 98.7% of the $69 trillion managed by the U.S. asset management industry. Studies from McKinsey and other sources have consistently found that inclusive teams make better business decisions and statistically outperform less diverse firms. Broadly, that’s because a variety of world views helps teams converge on more accurate conclusions.