A new report by PWC flags up the tardiness of the investment management industry in dealing with diversity planning and reporting. We will outline the main findings from PwC, including the views of Legal & General Investment Management’s Helena Morrissey.

While investment management firms are mulling over – and acting – to drive diversity and inclusion in their firms, they are crucially failing in communicating their efforts to other financial services institutions or to the public.

The report examines whether efforts are being made in investment management to drive diversity – with 4 April’s deadline to report on gender pay gaps approaching. It was undertaken in support of the Diversity Project, an industry group tackling diversity in investment management.

While the firms rated themselves at a ‘65%’ score for how they feel they’re progressing on diversity strategy and management, research of external stakeholders and the public saw a score of 46%.

“The size of the ‘gap’ between the internal and external assessment outcomes highlights the issue that positive action occurring within firms is not always being publicised or promoted externally,” states the report.

Five key messages are encouraged following the findings

Firms should:

• Treat diversity and inclusion as a business issue;
• Articulate a clear diversity strategy, including assigning accountability, setting targets and monitoring progress;
• Promote existing efforts externally;
• Work together to use industry-wide initiatives to support each other, and particularly maller firms with their diversity agenda; and
• Use gender pay gap reporting as an opportunity to demonstrate how seriously diversity is taken by the industry.

“We can’t fix the past, but we can write the future. I now see real momentum building, with a sense of urgency and commitment to improve diversity in our sector,” said Helena Morrissey, head of personal investing at Legal & General Investment Management and chair of the Diversity Project.

Transparency and accountability are key to driving forward change, according to Jon Terry, PwC’s global financial services HR consulting leader. The gender pay gap reporting will add more scrutiny on the profession – hiding or avoiding the issue is not an option.

“Firms need to be bolder in communicating what they’re doing to give confidence to their shareholders, customers, current and future employees, and the general public,” Terry added.

Kevin Reed is one of the UK’s most senior accounting and finance journalists. He is a former editor of Accountancy Age and Financial Director, and writes regularly on corporate and professional services governance.

Further reading on this topic:

Diversity starting to influence portfolio decisions – think tank