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Diversity & Inclusion in Finance
Diversity & Inclusion (D&I) is critical to the future of the investment management industry. An inclusive environment ensures equitable access to resources and opportunities for all. An inclusive culture that leverages diverse views will be an important element in determining a firm’s success.
Why Is Diversity & Inclusion Important in Finance?
A rapidly evolving finance industry demands new capabilities and a more diverse workforce and inclusive workplace cultures. According to CFA Institute’s own definition of D&I, diversity is the spectrum of human attributes, perspectives, identities, and backgrounds while inclusion is a dynamic state of operating in which any individual or group can be and feel respected, valued, safe, and fully engaged. Each of these factors must be deliberately encouraged and leveraged to develop a successful, diverse, and inclusive environment.
Why Is Diversity & Inclusion Important in Finance?
The discussion around motivations for pursuing diversity in investment management often revolves around two main areas: “the business case for diversity” (i.e., with more diverse perspectives, business outcomes will improve) and “because it is the right thing to do.” Overall, asset management firms tend to be in a reactive phase of diversity and inclusion, meaning that actions are taken primarily to comply with local laws and social pressure.
According to a recent PwC Global survey, 85 percent of financial services CEOs polled said promoting diversity and inclusion helps enhance business performance. Other research also supports the business case for inclusive cultures that lead to increased profitability, creativity, and innovation. Indeed, a recent McKinsey & Co. study revealed top-quartile companies for racial and ethnic inclusion outperformed those in the fourth quartile by 36% in profitability.
Types of Diversity in Finance
There are many different types of diversity and means of inclusion across the finance industry. By identifying and understanding these, you can take the action needed to encourage greater diversity and inclusion in your firm.
Want to learn more about gender, racial, ethnic, age, and sexual orientation diversity in finance. Here are more resources:
- Gender, Racial, Ethnic and Age Diversity in Finance | CFA Institute
- Driving Change: Diversity & Inclusion in Investment Management
- Twenty Actions to Promote Inclusion in the Investment Industry
- Why Diversity Is More Critical Than Ever
Anne Rogers
