According to APCO Worldwide International Advisory Council members Beth Brooke and Wendi Strong, and APCO board member Marcia Page, to accelerate diversity and inclusion in the financial services industry, CEOs need to set the tone at the top, organizations need to embrace system thinking and data around talent management and brand-builders need to instill empathy to create more inclusive growth. For part 1 of this article, read Now More Than Ever, Diversity is a Financial Imperative. Part 2 below expands on the imperatives for financial leaders.
Beth Brooke, APCO IAC member, former global vice chair of public policy of Ernst & Young (EY)
“Tone at the top and talent management.”
What leads to change is if the CEO believes in diversity. It has to come from the CEO. You need tone at the top to look at what gets rewarded, measure the progress you need to make, and then hold people accountable. Those things have to be in place, otherwise all the unconscious bias training and other D&I initiatives in the world won’t help.
If there was a silver bullet, we would have shot it. But one thing that can really put more women, minorities and individuals with different backgrounds and abilities into leadership jobs over a 10-year period is rigorous succession planning. Develop a diverse slate of candidates for every position, looking two or three years out and longer-term—with career management around that slate, accountability for who is managing their careers, and giving each person the experiences that qualify them to be chosen from the slate when the position opens.
Wendi Strong, APCO IAC member, former EVP and chief communications officer of USAA
“Empathy and inclusion.”
Change comes when a company’s leadership develops conviction around the importance of creating a more diverse organization to be more successful. There is a lot of pressure on organizations to do something—I’m happy to see it is now coming from a place of business benefits and results.
There has been progress in the workplace for women, African Americans, the LGBTQ community and others, but there is still a long way to go on equal treatment or pay equity. It is challenging to get employees and leaders to hear that some people have a very different experience at work, and for them to understand what it’s like to be at the table when nobody looks like you.
Empathy is really what it gets down to. In business, you can’t build relationships unless you are empathetic and understand the other person’s culture. The main thing we need to have is the ability to put ourselves in someone else’s shoes.
Marcia Page, APCO board member, co-founder and executive chair of Värde Partners
“Performance, data, and systems”
Generally, D&I is being taken much more seriously because demands from clients are up dramatically, but also because of the need to outperform in a tough investment environment. You really need to hear from everyone and have them be part of the conversation, and not feel the need to fit into a dominant culture or bow to peer pressure. That is what leads to alpha.
Senior leadership has to be totally bought in and visible—but culture isn’t enough. When I started Värde with my partners, we had a very differentiated way of looking at the world: from decision making, investing and talent perspectives about the business case for diversity. But despite our culture we found our metrics were no better than the industry. So, we’ve taken a beautifully data-driven approach to more than double the number of women investment professionals and address systemic issues.
For example, the data showed that women lag in promotions. That is a major reason why there are so few senior women executives and change takes so long. We’ve revamped the hiring and promotion process to de-bias talent management and make women feel they have a fair shot at the top.