Diversity: Inclusive not intrusive
Frontier has released a research paper exploring the issue of diversity in the institutional investment industry. The paper reviews a range of dimensions of diversity and follows our acclaimed paper from 2018 which specifically examined the issue of gender diversity in investment roles. On that score, our latest analysis shows some progress appears to have been made on the surface, but there is more to be achieved below the veneer.
The paper charts progress made in terms of the number of all-male investment teams both in Australia and globally and finds that since their 2018 study, the number of Frontier-rated Australian equity manager teams without any women has fallen from 45% to 15%. We found no global equity managers among the pool with all-male teams, compared to 19% of the sample four years ago.
While this is a positive finding, author of the paper, Mary McLaughlin, notes wryly that the number of all-female investment teams remained constant over this time at zero, regardless of domicile.
However, there has been little progress made when diversity is measured in terms of overall female participation across investment teams with almost no shift occurring both in Australia and overseas. Mary found female participation within teams had remained virtually static at between 23% to 25% over the four-year period, with a very slight improvement in Australia and a slight decline among global managers.
“While organisations are seeing the need to ensure they have at least some women in their teams, the overall participation of women in the industry is not reported to be growing”, said Mary.
This observation is supported by data from the CFA Society Melbourne who report in their last annual report that only 20% of its members are women, up marginally from 17% five years ago.
Mary’s paper explores a range of diversity factors and issues for organisations to address and draws on the experiences of a range of senior investors. The paper examines areas from cognitive diversity through to age and ethnicity within industry leading teams. However, for a number of reasons, gender remains the factor often under the spotlight.
In an attempt to combat the challenge of growing the number of women in the investment sector, Frontier itself has instituted a number of strategies to contribute to an industry wide lift in female participation.
Head of People and Culture at Frontier, Sarah Guthleben, notes there are challenges at three levels. “Firstly, we need to bring more women into investment careers. Then we need to support women to remain in the sector by providing career advancement, particularly for those women combining family responsibilities often at times when their careers are beginning to accelerate. And, finally, we need to keep senior experienced women in the industry for longer to mentor and provide role modelling for emerging women”, said Sarah.
Mary is herself an example of a senior industry figure that Frontier brought on board five years ago. A former industry fund CIO, Mary had elected to move away from a full-time executive role, however Frontier was keen to bring her experience in to the firm and created a part-time internal advisory role.
More recently, Frontier created a similar opportunity for Cecily Williams who had ended a four-decade investment advisory career but was not quite ready to fully retire. Cecily now also works part-time, based in Sydney, and is able to bring her experience into the firm for the benefit of our clients, but importantly for our emerging consulting staff.
“Mary and Cecily are great mentors, not just for our young female staff, but for all of our team. But particularly, I think they provide an example for young women that you can have a long and rewarding career in investments and achieve very senior and meaningful roles”, said Sarah.
At the other end of the spectrum Frontier is playing our part to bring more women in to the industry. The firm has an external recruiter physically embedded within the business and our culture, with a specific brief to find more female candidates for roles and to ensure job advertisements and position descriptions remove any elements of unconscious bias that might otherwise dissuade female applicants.
In a more direct move, Frontier has developed a PhD intern program with a number of universities to provide select candidates with a six-month placement within their investment strategy team. This provides exposure to asset consulting as a career choice and brings a new cohort of professionals into the industry, ultimately with the opportunity to join the firm in a full-time capacity. University of Melbourne PhD candidate, Vivian Xu, is one such example of a new entrant to the industry starting her professional career as a quantitative analyst with Frontier earlier this year.
“Finding a creative and constructive way to collaborate with the university sector to help students progress from academia into professional life is a win-win situation for all parties and provides a meaningful way to boost the number of women joining our industry at the entry level”, said Sarah.
“Of course, it is vital to ensure women can develop their careers and gain promotion without impediments, but women moving between organisations or different roles doesn’t lift the overall number of participants. We need to find creative ways to bring more women into the industry and keep them contributing more deeply and for longer.
As Mary’s paper states, addressing any aspect of diversity will have not just an improved equity outcome but will lead to better functioning teams and improved decision making across organisations.