On International Women’s Day www.top1000funds.com spoke to Mass PRIM CIO, Michael Trotsky about diversity and inclusion.
Trotsky, who was recently part of the steering committee for the CFA Institute’s diversity and inclusion project, which resulted in the report, Driving Change: Diversity and Inclusion in Investment Management, believes the industry is at a perfect inflection point to make inroads into improving its score on diversity.
Why is diversity and inclusion important and why is it important for the industry to have this report?
Diversity of thought is a key ingredient for success and is critical to creating a healthy, effective organization. We think the investment industry is at a critical inflection point where it is finally aware of its shortcomings and leaders are finally trying to do something about it. This is coming from the very top of most successful organizations. The CFA’s effort is designed to help companies adopt best practices and we hope that by doing so the investment management industry, like other industries before ours, becomes more diverse and inclusive.
What motivated you to be part of the steering committee?
This is a critical priority for me, professionally and personally. I look forward to learning from my peers and sharing experiences. Together we can have an important impact on the entire investment industry.
What were you surprised about in the findings?
Most of the findings are just common sense, and others like Cultural Taxation and Story Telling are more provocative. The range of ideas is broad enough that I think any reader will find something useful and perhaps something they haven’t thought about.
Of the 20 action points in the report, what do you think is the most important for asset owners and asset managers to embrace if they want to be more inclusive and diverse?
That is a tough one. Maybe #3. Culture is key, and policy needs to support it, but by itself is inadequate. You hear stories about great policies that end up being ineffective, even with C-suite buy-in, because the “great frozen middle” of management is more reluctant to change.
What practices do you employ at Mass PRIM to ensure you have diversity and inclusion?
Our recruitment practices are improving, and we are targeting under-represented minorities and women. Our candidate slates must include diverse candidates and we are always looking for how to expand our talent pipeline and recruitment sources with diverse groups and networks. Our interview process also includes diverse interviewers.
We participate in summer internship programs for women aspiring to be enter the investment management industry. We partner with Girls Who Invest, Women in Finance Fellowship (managed by Massachusetts Treasurer), and the CFA’s new Women in Investment Management internship program. (PRIM is one of four inaugural corporate partners to work with the CFA on this project with three local colleges.) We hope these programs will help us to grow a pipeline for talent.
PRIM also is working with an outside diversity and inclusion specialist to identify areas of improvement. The surprising part of this work is that most of the strategies are actually suggestions from current employees. You just have to ask!
What does diversity look like at your organization?
PRIM values diversity of thought, so we need employees with diverse backgrounds and experiences.
What can the industry do as a collective to improve its score on this measure?
I believe it is critical to grow the pipeline of candidates and I am hopeful we can succeed. But to attract the next generation, we need to better communicate the strengths and virtues of our industry, and we need to be more welcoming. I also think that the scars from the GFC are still fresh and trust in our industry is still low and must be improved through ethical behavior by participants. By encouraging students of all ages to learn about the investment management industry, we hope that more students will see our industry as a competitive option for their skills and talent.
Do you think diversity drives better outcomes? Why/How?
PRIM’s diversity is a strength that has enabled us to develop innovative and productive investment strategies. We agree with the many studies that point to a link between better outcomes and diversity of thought.
Other stories on diversity published on International Women’s Day
On International Women’s Day www.top1000funds.comspoke to CalSTRS’ CIO, Chris Ailman about diversity and inclusion. CalSTRS, which has gender parity in its investment team has been a leader on diversity. He gives the industry some pointers on how to improve its score on diversity and inclusion.
The CFA Institute will work with 30 asset owners and managers as “experimental partners”, implementing diversity and inclusion action plans in their businesses. We spoke to CFA’s Rebecca Fender about the importance of diversity.