The investment industry leads others at measuring performance. These metrics are both financial, like investment portfolio returns, net flows, gross revenues and earnings, and non-financial, such as client satisfaction, technology and operations resiliency, and employee engagement scores.
Investment firms are increasingly aiming for more diverse workforces and are applying rigour to measuring and tracking this. A growing weight of evidence supports the business case for a diverse workforce. Employees from different backgrounds bring new experiences and perspectives, helping create organisations that are more resilient, innovative and profitable.
A 2019 McKinsey report reveals a clear correlation between diversity on executive teams and financial outperformance. It found that executive teams in the top quartile for gender diversity and their companies outdid those in the bottom quartile by 25% in profitability. Similarly, companies in the top quartile for ethnically diverse executive teams outperformed those in the bottom quartile by 36%.
Driving diversity is not just ‘right’, it is also smart. At BNY Mellon, we have set ourselves clear goals and strategies to drive diversity. That starts at the very top. The board sets our targets and our chief executive officer holds the executive team accountable for achieving them. If our longer-term aspiration is to represent the communities in which we operate all around the world, we set ourselves goals that get measured and tracked, to make sure we are alert to them through hiring, retention and promotion decisions. Our executive committee members sponsor senior employees from different backgrounds to make sure we’re constantly and consciously considering diverse talent for senior roles. And we require hiring managers to have diverse candidate slates and interviewing panels for all open positions.
As the saying goes: ‘Diversity is being invited to the party and inclusion is being asked to dance.’ We encourage our teams to join and lead employee resource group activities, and we give them the time, space and tools to work together to drive engagement around causes that are important to them. We ask managers to hold inclusion dialogues, train their teams to identify unconscious bias in themselves and expect all employees to become inclusion allies. Only when everyone feels included, do they belong, and when all 48,000 of our colleagues feel like they belong, that drives positive outcomes for all our stakeholders and for society.
We are on a journey and there is a significant way to go. Barriers remain to attracting diverse talent into an industry that may not be seen as a viable career option in some communities. As an industry, we need to change that by improving representation and creating more diverse role models.
The events of 2020 have highlighted the discrimination and social injustices that we would like to think were things of the past still exist. But at the start of 2021, I am optimistic about the transformative contribution the investment industry can make to society while strengthening itself with the greater experience, creativity and resiliency that a diverse workforce can bring.
Hani Kablawi is Head of International at BNY Mellon. The views expressed herein are those of the author only and may not reflect the views of BNY Mellon.