CalPERS and CalSTRS sponsored a diversity forum in Sacramento on Wednesday, May 12, 2017. The goal of the Diversity Forum was to bring together investment and corporate executives to discuss how to better capitalize on the abilities of the diverse modern workforce. While I think diversity should be adopted simply because it is morally right, often economics speaks volumes in the finance community. The McKinsey Global Institute estimates that narrowing the global gender gap could add US $12 trillion in annual gross domestic product to global growth.
The Forum focused on:
- Recent research
- Developing and implementing positive, solutions-oriented initiatives and real world best practices
- Insight and experience of industry leaders
Of course it was also a great opportunity to network in my hometown with others interested in this important topic in corporate and pension fund governance. What follows are my cryptic notes. Everyone who came left with a different set of takeaways. Hopefully, these brief note and photos will prompt you to attend next year. For those of you who did attend, I hope you will find the links of interesting. More coverage on Twitter at #CADiversityForum.
Keynote: Setting the Stage – Why and How Does Diversity Matter?
Helena Morrissey, Head of Personal Investing, Legal & General Investment Management, Founder of the 30% Club. Business Person of the Year in the Boldness in Business Awards and mother of nine children.
Morrissey provided several examples of diversity improving value. “We’re still learning how to apply the principle that diversity adds value.”
One of her stories, in her role with the 30% Club, involved recruiting a couple of white male board chairs to address the diversity issue in each of their firms. It set off a competition between them to see who would reach 30% first. That re-calibrated the problem. Peer pressure, media attention, targets with deadlines. Diversity Project to create an inclusive culture in the investment profession. I’ve seen Morrissey at other conferences, always lively and fascinating. Check out the links above.
Proven Ways To Drive Inclusion – Numbers Behind the Methods
In this session, we looked at the latest research on which methods are most effective to create a successful diversity and inclusion program, and which methods may have unintended negative effects.
- Thurman White Jr., President & CEO, Progress Investment Management Company (Moderator)
- Frank Dobbin, Professor of Sociology, Harvard University
- Celia Huber, Senior Partner, McKinsey & Company
His study appears to have used factor analysis to determine which actions correlated with success and which withy failure. What you should not do: blame management. Micromanage job tests, performance evaluations, civil rights grievance procedures… all resisted. People don’t like being controlled. Impact of diversity training is mixed. Mandatory requirements don’t often lead to good results. Far better to encourage voluntary action. That was one of my biggest takeaways from the whole conference. Better to get them to volunteer, even if reinforced as being good for their career.
Most effective way is engaging employees in solving the problem such as mentoring programs (turns them into champions of diverse mentees). Special college recruitment – they make sure those requited get good assignments. Engage manager in diversity taskforces.
Work-life integration workshops also work well if company’s signal work/life balance is OK. Dependent Care Referral Services signal company understand work-life balance issues. Put in systems that put people with differences together. Must be volunteers.
Celebrated success becomes self-fulfilling reinforcement. People are driven by modeling. Self-managed work teams see more promostions of women and diversity. Self-managed work groups growing. 30-40 of firms now using.
Top 60 have moved from 16% to 40% women board members. Top 25 moved even more progress. Changed the mind-set. Visible commitment. Expand your criteria beyoned current/past CEO. Maintain an active pipeline, expanding network. Current pace 100 years to get to parity in C-suite. Make compelling case, fair hiring, promotions & review. Focus on accountability. Empower employees to lead the charge.