The investment industry in the UK has signalled a fresh commitment to diversity, equity and inclusion with the creation of new guidance.
The global body for investment professionals, the CFA Institute, launched its voluntary Diversity, Equality, and Inclusion Code for the Investment Profession in the UK yesterday. Its creators said they were determined to avoid “tick box compliance” and to produce a way of propelling cultural change.
The US and Canadian versions of the code have been adopted by 160 firms so far.
The code is available to investment organisations of any kind and size “looking to accelerate change by fostering a commitment to DEI”.
The CFA Institute is a not-for-profit organisation that provides investment specialists with finance education. The institute aims to promote standards in ethics, education, and professional excellence in the global investment services industry.
Signatory firms will commit to six principles:
- Extending the diverse talent pipeline
- Establishing inclusive and equitable hiring and onboarding practices
- Creating promotion and retention practices to reduce barriers to progress
- Improving DEI outcomes across the investment industry and holding the business responsible for progress
- Promoting and increasing measurable DEI results in the sector
- Measuring and reporting on progress to drive better DEI results within the business.
Within two years of becoming signatories, companies will need to have an established senior leader ownership and oversight governance process; formal, written and publicly available communications on their DEI strategy, policy, commitments and objectives; and an implementation plan to integrate DEI throughout their organisation.
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Margaret Franklin, CEO of the CFA Institute said far more needed to be done across all aspects of DEI and that the code was a key component in the effort to build a “more representative and resilient industry”.
Will Goodhart, chief executive of CFA Society UK said the Institute’s role was to help ensure investment professionals were technically and ethically competent to work on their clients’ behalf. The DEI code “will help us work together to build and develop inclusive cultures across the investment sector. We look forward to working with DEI Code signatories”, he said.
DEI code signatories will provide a confidential, annual progress report to CFA Institute, which in turn will report on industry-level statistics once a critical mass of signatories is reached. Signatory organisations will meet certain reporting requirements within two years. These included an established senior leader ownership and oversight governance process and a written, publicly available statement of the organisation’s DEI strategy, policy, commitments, and high-level objectives.
Lindsey Stewart, director of investment stewardship research at financial services firm Morningstar and member of the DEI code working group, said the code’s creators had thought long and hard about how to encourage signatories to raise their ambitions on DEI without introducing a long list of prescriptive requirements.
He added that the code was designed to be scalable across a range of organisation sizes and structures. “The aim is cultural change, not tick-box compliance,” he said.
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