How has investment management reacted to Black Lives Matter?

On an unfeasibly hot day in May 2020, more than a month after the UK was plunged into a dystopian-style lockdown as Covid loomed large, harrowing images of a man kneeling on another man’s neck until he suffocated circulated across the globe.

Within hours, the nine-minute video clip of 46-year old black man George Floyd’s murder by three white police officers set the internet alight with messages of grief, dismay and terror. Within days, mass worldwide protests were triggered as hundreds of thousands of people stood up against police brutality and racism.

The sad truth is, George Floyd’s murder was far from the first instance of racist police brutality that has occurred in recent history and nor will it be the last. But whether it was lockdown-induced tension bubbling over, or simply the straw that broke the camel’s back after a long history of systemic failures, the world experienced a monumental shift in how it discussed race.

It is easy to shake one’s head at the tragic loss of life and continue as normal when an incident happens at a broad-based level. For the financial services industry, however, it took on a new layer of poignancy. Three days after Floyd’s death, footage circulated of former Franklin Templeton employee Amy Cooper threatening to "tell [the police] there is an African American man threatening my life" after Christian Cooper (of no relation) asked her to put her dog on a lead in a wooded area of Central Park as it was against policy. It was after this that, across my LinkedIn and Twitter feeds, I noticed a huge number of people within the asset management industry sharing outpourings of grief and, for the first time in many cases: talking publically about race.

Diversity issues

Diversity is a subject I have passionately covered throughout my tenure at Investment Week. In 2018, I interviewed the founders of the Diversity Project’s ethnicity workstream #TalkAboutBlack, which aims to address the kinks in the talent pipeline that are preventing racial diversity among cross-industry black leaders. As its name suggests, one of the kinks that needs to be urgently addressed if we are to see change is talking about race. And, while the organisation had achieved some incredible feats since launch, its hard work appeared to be overshadowed by ESG (environmental, sustainable and governance) investing and discussions around gender.

Make no mistake; asset management is only at the beginning of its journey towards making ethical practises mainstream and addressing its frankly cavernous gender gap. According to a 2020 report from the Diversity Project, there is 24% representation of women on executive committees within asset management and 26% on boards, which is obviously not good enough. The numbers are even more disappointing across banks, fintech firms and insurance brokers.

Source: The Diversity Project

But what had provided peace of mind (but by no means a reason to rest on one’s laurels) was that people were at least talking about it. Women, and importantly male allies, in senior positions were speaking up and heading towards ‘walking the talk’ when it came to addressing gender diversity.

To me, it felt as though discussions around race had been left behind. Therefore, when BlackRock’s Gavin Lewis, LGIM’s Justin Onuekwusi and Impax Asset Management’s Darren Johnson launched their #IAM campaign a week after Floyd’s murder and it was used almost 50,000 times on LinkedIn alone in its first seven days of inception, I felt an irrevocable shift ripple cross the industry.

Holding up a mirror

Bev Shah, founder of City Hive, said the #IAM campaign - which aims to provide black people and allies in the industry the opportunity to write their own narratives rather than fall victim to harmful stereotypes – “held up a mirror that none of us can look away from".

People were listening. This inspired me to push Investment Week’s coverage of diversity harder than ever before, and culminated in a 3,000 word analysis piece called The 'looking at your shoes' moment: Let's talk about race. Alongside the primary aim of sparking a discussion, I wanted to share the lived experiences of black members of the asset management community, provide tangible ways organisations can improve their racial diversity, unpack the homogenising BAME acronym and encourage people to move beyond allyship into advocacy for race equality.

A tall order for one article when addressing such a deep-seated and emotionally complex issue – perhaps I got carried away with myself. But something I learned very early on in my new-found determination to shine the spotlight on race was that allies – though with the best intentions – found it easier to discuss gender than they did race. 

Gender and race

"Most men will at some point have had a woman in their lives somewhere, be it a mother, a sister, partner or a daughter. And I know that for many people that I work with, I am probably the only black person that they know," BlackRock’s Lewis told me.

"That creates a degree of unfamiliarity. How do you even start unpacking how to deal with the race issue if you do not understand the challenges surrounding racism and the challenges surrounding someone like me?"

The answer begins outside of the office walls, according to fixed income fund manager at JP Morgan and diversity advocate Didier Lambert.

"A small example is to look at your Spotify playlists. What music are you listening to? What is your circle of friends like? Who are you going to lunch with at the office? It will be impossible to bring diversity and inclusion into the workplace if we do not practise it in our everyday lives,” he explained.

Fears of saying the ‘wrong’ thing

Impax’s Johnson pointed out that a lack of familiarity or personal connection has perpetuated a fear of “using the wrong term or saying the wrong thing”, which is why he has coined discussions around race as the “looking at your shoes moment”.

Baroness Helena Morrissey, founder of the 30% Club and chair of the Diversity Project, told me that even she feels nervous when delivering keynote speeches or chairing panels regarding race. 

“Sometimes when I run a racial equality event I feel like a bit of an imposter," she admitted. "I feel nervous about it because I do not want people to think to themselves, 'there is a middle class white woman pretending that she understands us'.

"I have to find the courage within myself to speak out. As a white person, I have an inbuilt privilege that I am benefitting from. So, if I say nothing I will be complicit."

Patience and understanding is clearly required on both sides in order to address the topic sensitively, thoroughly and diligently.

Madhu Kahlia, investment writer and press officer at Rathbones, said the industry needs to “stop maligning the ‘stale, pale, male’ if it wants to become more inclusive.

“Many of my work heroes have or do fall into that ‘category’, and inclusion at the expense of others potentially creates more problems that it seeks to address,” she reasoned. “To the BAME community – let us allow for errors. If people are afraid to ask for fear of being branded ignorant, issues remain unresolved.”

Changing the conversation

The asset management industry made a huge amount of progress in 2020 in terms of putting tangible initiatives in place to improve racial diversity, and it has been a joy to cover the launch of each new scheme and campaign.

Following the successful launch of #IAM in May, Redington, alongside nine other Diversity Project member financial services firms, launched an initiative designed to increase the representation of black talent in the investment industry by working with a group of black students to challenge the industry’s existing approaches.

In October, Investment20/20 and #TalkAboutBlack teamed up to launch a cross-industry mentoring programme for senior black professionals in investment management. #TalkAboutBlack also launched a pilot after-school programme targeting state schools in socio-economically disadvantaged areas across London, in a bid to encourage young people to join the asset management industry. In the same month, some 70 firms – including Fidelity, Standard Life Aberdeen and Aviva - signed an open letter demanding action on inclusion in response to the Black Lives Matter movement.

And, also in October, leading figures of the investment management industry including co-founder of Redington Dawid Konotey-Ahulu, managing partner of Livingbridge Wol Kolade and president of Capstone Investment Advisors Jonathan Sorrell launched the 10,000 Black Interns programme, which aims to improve and transform the career prospects of young black people in the UK.

Less than two months into this year, City Hive has opened up its mentorship scheme to a new cohort of female and ethnic minority mentors and mentees, while State Street’s head of corporate communications EMEA Noreen Shah launched reboot. – a powerful initiative using the power of story-telling to provide ethnic minorities with role models, and minority allies with greater understanding of the issues faced by people of colour in the industry. Numerous firms have hired heads of inclusion, including T. Rowe Price, Aegon Asset Management, Federated Hermes and JP Morgan, to name but a few.

Action is needed

But while there have been some inspiring and emotive movements in the right direction from the industry this year, the story is sadly far from over.

Source: Investment Week

Almost three-quarters of FTSE 100 companies failed to report the ethnic make-up of their boards in this year's AGM season, according to the Investment Association, while research from Race Equality Matters found that, six months after George Floyd's murder, 70% of the people polled did not think their employers had a firm action plan in place to improve racial diversity.

Discussing race remains a taboo in many instances, while some firms acknowledge the need to address diversity but don’t know how to take the next steps forward. This responsibility, in part, falls on the financial media, who can help raise awareness and highlight tangible solutions.

Banging one’s fists on the desk and shouting “this isn’t good enough” is not the answer. What we really need is to recognise the progress that has been made, and encourage consistency and progression through understanding and open communication.

About the Author: Lauren Mason is the Editor of Investment Week, and recently won the State Street Journalism award for her coverage on diversity and inclusion in the asset management industry. Lauren began her career in financial journalism specialising in fund and investment trust data. She has also worked as an investment writer, covering market movements, investment vehicles and macroeconomics.