Diversity and inclusion: Thinking independently, together
Agrowing body of research suggests that companies with greater diversity tend to perform better relative to their peers. William Tohmé looks at the role the asset management industry can play in helping to close the diversity divide.
There’s no doubt that the United Arab Emirates (UAE) has been a beacon in the advancement of gender equality both in MENA and globally. In December 2018, the Federal National Council introduced a mandatory female gender quota of 50%, and the UAE has already achieved gender balance in its cabinet. In 2012, the UAE made it compulsory for all stateowned corporations to include at least one female member on their boards.
These are pragmatic, sensible advancements. Issues of equity aside, failing to increase the role of women in senior positions is not only bad for society; it is bad for the economy. A growing body of research shows that companies with greater gender diversity tend to perform better relative to their peers. Higher female representation at board level has also been shown to correlate with lower levels of corporate governance malfeasance.
The “tone from the top” is also symbolically important, serving as a beacon for the region’s values at home and abroad. There is, however, a long
way to go. According to the Emirates Institute for Banking and Financial Studies, although women represent 72% of UAE nationals employed in the banking sector, they occupy just 12% of senior management positions.
At the firm level, diversity is also an issue most companies are keen to be seen to embrace. A recent survey conducted by YouGov found that 57% of respondents in the UAE saw workplace diversity as a top priority for their employer. However, it’s essential to recognise and promote genuine and innovative outreach efforts to underrepresented groups coupled with hands-on training once they’re onboard.
Interestingly, some of the most handson programmes are springing up in less developed markets, such as “Young Women in Investment”, which we launched in India in 2018. The programme, which aims to increase awareness of careers in finance to those who might not previously have considered it, offers one-hundred participants full board at a four-week boot camp focused on business skills and in-depth instruction on the capital markets. A threemonth paid work placement at a top-tier financial services firm completes the training.
On a more global level, in November 2017, we officially launched the Women in Investment Management Initiative. The programme has three objectives: to increase the number of women who join the profession and hold the CFA charter, to retain women in the profession and, finally, to create demand for diversity as an industry imperative.
We decided to focus on gender diversity as women are a minority in investment management across global markets, making them the “universal diversifier”. We believe an initial focus on gender diversity will yield lessons applicable to other dimensions of diversity, including cognitive and socio-economic. The latter, in particular, is important as multiple studies in developed markets attest to the fact that the socio-economic status of ones’ parents is the single most important predictor of academic, professional and financial attainment in life. Therefore, firms genuinely looking to make a difference, and benefit from the diversity premium, should seek to diversify along multiple dimensions.
One way in which companies can help retain the best – and most diverse – talent is by extending a greater degree of latitude to employees to work in a way that best suits them. More often than not, women still carry the majority of caring responsibilities for children and older relatives, rendering the option to work flexibly of particular importance. However, flexible working should apply across the board, not just to women or parents.
In an ideal world, one’s class, ethnicity, or gender would not impede one’s life journey. We are very far from any such ideal. However, the capital markets, including industry bodies, have the potential to act as a torchbearer in advocating for, and implementing, real and lasting change.
Earlier this summer, we appointed Margaret Franklin as our new CEO and President, the first woman to hold the position in the organisation’s 73-year history. It’s an important milestone and one we hope will herald further change as we continue to promote a more diverse and inclusive workforce, and, in so doing, develop sustainable capital markets that work for everyone.