​Investment - Key Concepts in DEI

​Investment - Key Concepts in DEI 
CFA Institute DEI Code 
A major purpose that CFA Institute offers is to design and implement codes, best practices, and guidelines for the investment management sector. CFA Institute launched the DEI Code in February 2022 in response to demand from investment industry professionals. Built by a very diverse working group of investment industry professionals, CFA Institute members, workers, and DEI practitioners, the Code is a set of six principles aimed to encourage diversity, equity, and inclusion across the investment management business. It is a global code and is being rolled out on a regional basis, commencing with the United States and Canada presently and then followed by the United Kingdom and Europe.

Principle 1

Pipeline – We commit to expanding the diversified talent pipeline.

Principle 2

Talent Acquisition — We pledge to establishing, executing, and sustaining inclusive and equitable hiring and onboarding policies.

Principle 3

Promotion and Retention — We commit to establishing, implementing, and maintaining inclusive and equitable promotion and retention procedures to minimize barriers to development.


Principle 4

Leadership — We promise to leveraging our position and voice to support DEI and improve DEI outcomes in the investing industry. We will hold ourselves responsible for our firm’s growth.

Principle 5

Influence – We vow to leverage our role, position, and voice to support and increase measurable DEI results in the investing sector.

Principle 6 – Measurement — We commit to measuring and reporting on our progress in driving superior DEI results inside our organization. We will offer regular reporting on our firm’s DEI indicators to our senior management, our board, and CFA Institute.

Drivers for Engaging on DEI
Human distinctions, such as color, gender, ethnicity, ability, age, religion or belief, sexual orientation, and socioeconomic status, position individuals either within dominant social identity groups or subjugated groups. This separation promotes insider–outsider dynamics, with the insider groups usually at the top of the hierarchy. The demographic environment often decides who is part of the insider group and who is part of the outsider group. Beyond demographic disparities, insider–outsider relations may be based on the level of education, university attended, and even which workplace department individuals are a part of, with some departments and individuals perceived as bringing more value to the business than others. 

DEI is vital in the workplace because valued employees perform better, and people feel valued when they can be themselves. If individuals have to cover any element of their identity in order to fit in, they may not feel engaged in the workplace. As a result, people may not perform to their best skills.

There is a body of evidence that says having a diverse workforce raises levels of innovation and creativity, enhances abilities for addressing challenges, and improves financial performance.

A 2013 report from Deloitte Australia and Victorian Equal Opportunity and Human Rights Commission titled ‘Waiter, Is That Inclusion in My Soup? A New Recipe to Improve Business Performance’, demonstrated that inclusive businesses experience the following:
83% increase in the ability to innovate 31% uplift in the responsiveness to changing client needs
42% boost in team collaboration

Willis Towers Watson, which has USD2.6 trillion in assets under advisement, studied more than 2,400 individual investment teams globally and found that diverse groups outperformed those with no gender or ethnic minority personnel by 20 bps (basis points) a year, on average.

What is Discrimination? 
There are three types of discrimination, which are detailed in the slides below. The slides will first introduce the form of discrimination and clarify each term, and then you will be presented with a scenario to assist you better grasp how prejudice can manifest in practice.

Direct Discrimination
Direct discrimination is when an individual is discriminated against because of a personal attribute they possess or are believed to possess.   

Indirect Discrimination
Indirect discrimination is where a condition applies equally to everyone yet puts individuals that share a particular attribute at a disadvantage. The condition has no objective justification.   

Harassment
Harassment includes unwanted activity, verbal and/or physical, that has the impact of making a person uncomfortable, embarrassed, intimidated, or upset. Sexual harassment is one of the most common types of harassment.