Two months ago, I attended the third annual CFA Institute conference on gender diversity in investment management. What really stood out to me was how the conference has evolved since the inaugural conference two and a half years ago. The conference was initiated as a result of the Women in Investment Management initiative CFA Institute has embarked on. Many of the sessions at the first conference were focused on the experiences of women in the industry, and how they found success. The second conference was filled with substantive sessions on the research and data available to make the compelling business case for diversity in decision making. Overall, this year’s event was positive, uplifting and intriguing enough to make me think about attending the next conference.

This year, the agenda built on the success of the earlier conferences with valuable sessions on effective strategies for improving gender diversity. Topics included: an update on gender diversity research, how firms can improve their competitive edge with gender diversity and insights from the C-suite regarding career advancement. In addition, Paul Smith, CFA, President and CEO of CFA Institute discussed his expectation that the lessons learned from the initiative to increase gender diversity will be used to improve other types of diversity in our industry.

I honestly cannot tell you which session was the most informative as most were. There were more than a few interesting surprises.

The first session was an update on new gender diversity research.

Heather Brilliant, CFA, Vice Chair of the CFA Institute Board of Governors and Managing Director of First State Investments session was titled “Improving Diversity: What Really Works?” She began with statistics from the CFA Institute Research Foundation:

• 45% of investors believe gender diversity does not matter for managing investments
• 66% of women in the industry have most of the dependent care responsibilities

Could these realities be holding women back?

She then discussed why diversity is not the answer. A 2016 Harvard study found mandatory training leads to disengagement and backlash, and biases can be difficult to train around as we are not aware of those biases.

The researchers from Harvard found that engagement, exposure and accountability do work. In practice, college recruiting programs are effective, task forces and rotation programs are effective ways to provide exposure. You can find the Harvard study and several other relevant articles here.

Heather made two recommendations that were surprising to me. First, she recommended a structured process for talent acquisition – no panel interviews (which I used to like because I did not have to answer the same questions several times with equal enthusiasm), keep potential vs. performance in mind for all candidates and employees and that, contrary to what many believe, formal mentoring works. And here is the most surprising comment: she recommended considering quotas because they can increase female leadership which leads to policy influence. Surprisingly, gender quotas do not lead to back lash among citizens. (I did ask her to define what “quota” meant to her and she indicated that targets tend to not have enough accountability, and she stressed you must not consider unqualified candidates). I should note a speaker from another session had the opposite opinion of quotas.

Brad M. Barber, Associate Dean and Professor of Finance as University of California, Davis continued the update on research with an overview of recent studies related to the impact of role models, and math training on young women choosing a career in finance, in other words, the pipeline issue. This might not be surprise to many of you, but I was surprised the research indicates that role models matter.  (I was oblivious to the fact that I did not have a single female math teacher in high school or college). Barber also proposed we develop mentorship programs for women.

I was not surprised to see Dana M. Emery, CFA, CEO of California based investment management firm Dodge & Cox.  Her leadership is no doubt responsible for the culture of the firm. A few weeks after last year’s conference, I had a due diligence meeting with several people from the firm at their office and saw firsthand that this firm has been operating for years (you could not create this culture overnight) with many of the practices that data and research indicate lead to better decisions and a better business. For example, diverse opinions are not only encouraged, they are expected in the decision-making process and team work is the norm. The performance of the funds speaks to the success of the business. (The following is a link to an interesting study “Top Performing Equity Teams: The Common Factors They Share.”

Two comments from a speaker named Colleen Morehead, Chief Client Officer at Osler, Hoskin & Harcourt LLP are worth mentioning. Her session was about purposeful leadership. She encouraged everyone to harness their authentic voice and use it to their advantage. And, she reminded us that biases are merely shortcuts we are built with – they are neither good nor bad. We just need to be aware of them.

The information from this year’s conference supports the direction of CFA Society Minnesota’s initiation, Changing Perceptions. We have evidence our approach to make gender diversity in our industry visible (role models, mentors, speakers) can have an impact, and more ideas for furthering our MN initiative locally.

The next conference will be held September 20-21, 2018 in San Francisco. CFA Society Minnesota’s Past President of the Board of Directors, Leyla Kassem, CFA is on the organizing committee for this event so we can expect another valuable conference.

Teri Richardson, CFA
Changing Perceptions Initiative Chair