Promoting gender diversity is a big question for asset owners and despite the progress made so far, many funds and especially their investment teams are still characterised by finance stereotypes that can deter more diverse candidates from joining the workforce.
But as a starting point for those looking to bring genuine change – be it internally or in the broader industry – the Fiduciary Investors Symposium has heard that difficult conversations must be had about how to eliminate “micro-exclusionary” events and recognise men and women’s different ways of working.
In a candid table discussion conducted under the Chatham House Rule, executives and investment leaders from Australia’s top institutional investors and consultants interrogated how the current talent pipelines, recruitment processes and workplace culture can be made more inclusive.
A female investment leader in asset management said small things matter in creating a welcoming workspace.
“It’s the micro exclusionary events – like meetings when the men are only looking in the men’s eyes,” she said.
“I’ll never forget a meeting just last year, where there was a woman making the decision. She didn’t look at the two guys sitting next to me, she looked in my eyes.
“I’ve shared that story with so many women. It’s the small things that really make a difference, and that awareness of them.”
Another female executive who is on several asset owners’ investment committees pointed out the difference in women’s and men’s ways of working and the danger of ignoring that.
“Women tend to be very task orientated, they’ll be given a function within the team, and they’ll do that task from start to finish. They get a lot of satisfaction from doing that,” she said.
“Men on the other hand, can be very currency motivated, and currency is: ‘I want to do the job that I really enjoy doing’ – and in an investment team that’s managing the money and making investment decisions – and ‘I want everyone to know about it’, so they are sometimes the loudest voice in the room.”
Other delegates said efforts to address imbalances should start as early as at the university level.
“There are real gender imbalances that we see even at universities… how do we actually encourage more students to study finance in the second and third year?” one female portfolio manager from a super fund said.
“On representation, [we should] really try to encourage more female professionals to speak to finance students at various tertiary institutions.”
‘Plain wrong’
On an earlier panel, former Lazard Asset Management CEO Susan Roberts urged asset owners to use their position and call out any under-representation of genders in asset managers they work with or in their portfolio companies.
“It is wrong that those [senior investment] teams aren’t diverse – it is wrong from an equality point of view, it is wrong from an opportunity point of view, and it is just plain wrong,” she said.
“But it’s hard to change, because it’s a privileged position. It’s a good job to have.
“It’s not the total solution, but a key thing for me [to bring change] is the pressure from the people who are asset owners to say what you’re doing is wrong,” she said.
One asset owner performing such duty is HESTA, which has a predominantly female membership base in the healthcare sector.
The fund’s general manager of responsible investment, Kim Farrant, outlined the goal to achieve what it calls a ‘40:40 Vision’ – that is, having 40 per cent of the investment value chain identifying as women, 40 per cent as men, 20 per cent as any gender by 2030.
The fund conducts a survey of its investment managers every two years, and the latest report showed that 24 per cent of their workforce now consists of women.
Farrant said HESTA is planning to reach that target through three principles.
“First is to set time bound targets for compositions around gender diversity, but equally any other form of diversity that’s important in order to drive that,” she said.
“The next is to conduct regular gender pay gap analysis… And importantly, what you do with that analysis. How do you assess the underlying drivers of that [pay gap]? And how do you seek to address those drivers over time?
“Finally, it’s really about implementing inclusive recruitment and promotion practices, and removing those barriers to progression that might otherwise be there.”
JANA senior consultant David Scollon echoed the sentiment and said asset owners are capable of “sending a strong signal to the market” with their actions. The firm is setting up some stewardship structure to guide asset owners in their engagements with companies and investments on the gender diversity issue.
However, the panel acknowledged asset owners’ internal teams themselves are far from perfect. State Super’s general manager of defined benefits assets and liabilities, Keri Pratt, said that certain parts of super funds tend to have more female staff, such as ESG-related roles.
“The reason for that, in my view, it perhaps it [ESG] hasn’t been very sexy, and women tend to go into things that aren’t always sexy, because there are vacancies. But also, there is that ability for them to find that purpose,” she said.
“My question to many of you is, do you know what your employee value proposition is?”
She encouraged institutional investors to be clear on their culture and value, as well as considerate around job design to offer more flexibility for female candidates.
“The reality is the biggest drop off rate in females in organisations, not just in financial services, is mid-career. It’s around the time when women start to have children,” Pratt said.
“That is a really critical time where it’s so worthwhile your effort to actually consider whether or not there are ways that you can adjust the way you work together in investment team to accommodate that.
“But at the end of the day, thinking about that allows you to maintain those talented people, keep your costs down, and potentially then you have progression to senior leadership for those people.”
