It’s generally accepted that diverse teams are more likely to demonstrate increased productivity and effectiveness over the long-term. And while many asset management firms strive to achieve diversity, it can be difficult to measure how diverse firms really are.
Much of diversity data is flawed, or at least incomplete, according to a recent article in Institutional Investor. It argues that investors need to rely on more than just minority and female ownership statistics to create a more diverse roster of asset managers.
Citing a report from consulting firm Willis Towers Watson, the Institutional Investor article notes that investors need to evaluate who is actually on a leadership team or portfolio management group.
“There’s no shortage of data to look at, even if some is limited,” the article states. “Investors have increasing access to better information as data on diversity and inclusion, as well as environmental, social and governance factors has exploded. A growing industry that includes index providers, credit ratings agencies, and other third-party data firms has sprung up to collect and analyze the data and provide investors with better transparency on the companies in which they invest and the asset managers that invest on behalf of them.”
The key is looking at a mix of information, and not just relying on single data points. Despite the strides that diversity initiatives in financial services have made, though, progress is still slow.
The article notes that Willis Towers Watson “criticized the asset management industry for being a long way off from true diversity, saying it’s missing out on a lot of talent.”