Many people have dreamt of becoming a professional athlete, such as playing in the National Basketball Association (NBA) with legends like Michael Jordan.
However, the odds of making it to the NBA are extremely slim.
In fact, the probability of a college player going pro is just 1.2%.
But when it comes to African-Americans making it in the investment management industry, the odds are even lower, as pointed out by John W. Rogers, Jr., the chair, co-CEO, and CIO of Ariel Investments.
Rogers highlighted the stark disparities and lack of opportunity for African-Americans in the investment management industry during the recent “Race and Inclusion Now: An Investment Industry Call to Action” webinar hosted by CFA Institute.
As the first African-American professional hired by William Blair & Company in 1980, and the founder of Ariel in 1983, Rogers emphasized that very little has changed in terms of diversity in the US financial sector.
In the finance sector, firms owned by white men manage 98.7% of the $69 trillion managed by the US asset management industry.
This lack of diversity is also evident in the composition of senior fund managers and junior positions, with more than 70% being white.
Overcoming Obstacles
One significant hurdle to diversity in the investment management industry is the unequal access to networks and relationships. People with privilege, mostly white individuals, have better access to these networks, putting under-represented groups at a clear disadvantage.
Additionally, the industry’s cultural norms can be detrimental to the success and advancement of Black employees. These norms often require individuals to conform to certain standards of behavior and presentation, which can be challenging for people of color.
Black employees often find themselves code-switching, adapting their behavior to fit majority expectations and improve their chances of fair treatment.
The first step to addressing these issues is to create robust programs to mentor and sponsor African-American employees, helping them build networks and business opportunities.
Breaking the Silence on Race
Machel Allen, CFA, president and CIO of Metis Global Partners, stressed the need to openly discuss race in the workplace in order to address any structural biases.
Similarly, Stephanie Creary, an assistant professor of management at the Wharton School of the University of Pennsylvania, emphasized the importance of normalizing a diverse workplace and calling out expectations for minorities to conform to majority ideals.
Initiating workplace conversations on race and racism is crucial in addressing these issues. Creary developed a RACE framework to encourage discussions about race at the workplace, aiming to reduce anxiety and prompt acceptance and open dialogue.
Employers should facilitate employee discussions about race and racism, led by the majority group, to promote inclusivity and awareness.
Leadership and Recruiting
Rogers highlighted the significance of having senior African-Americans in leadership positions to attract more employees of color. He emphasized that companies should appoint senior leaders who can also be role models for minorities.
Diversifying the talent pool also requires intentional recruiting efforts and the demand for diversity within the industry. Firms need to be intentional about outreach, recruit at historically Black colleges and universities, and demand that diversity be added to the manager selection process.
Rogers also advised studying successful anchor institutions and getting rid of the notion of “emerging managers” to recognize and celebrate Black talent in the industry.
Lastly, he urged individuals to leverage their volunteer work to have an inclusive impact, serving on the boards of local anchor institutions and demanding change.
By taking these actions, the industry can make a collective difference in addressing the economic injustice and lack of diversity.
Conclusion
Rogers concluded by urging the industry to work together and address the questions around race and economic opportunity, emphasizing the need to no longer accept economic injustice.
It is crucial for the industry to address these issues around race and economic opportunity and make a collective effort towards greater diversity and inclusion.
All posts are the opinion of the author and should not be construed as investment advice. The opinions expressed do not necessarily reflect the views of CFA Institute or the author’s employer.
Image credit: ©Getty Images / Sven Hagolani
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