People Model



Progress on diversity and inclusion

Investment firms have notably weak gender diversity in their workforce composition and poor inclusion practice. They gradually realize the business case for diversity and inclusive cultures, where gender is only one dimension to diversity. They must acknowledge the size of the challenge given present circumstances.


  • Human ecosystems survive and thrive best when they have robust diversity. Diversity has been demonstrated to lead to greater adaptability and creativity (see Woolley, Aggarwal, and Malone 2015). Firms persuaded by the benefits of diversity look to diversify staff along multiple dimensions, including gender, ethnicity, national origin, knowledge, and educational institution, among others. Doing so helps to create teams marked out by a range of perspectives, knowledge, experience, and ways of thinking.
  • Successful future outcomes depend on people crossing frontiers and moving away from the places where they were trained and educated. Put another way, there is more to success than simply being an expert on your own turf. High-level problem solving demands the flexibility to draw on unfamiliar theory and research disciplines, notably management science, including game theory and network theory; evolutionary biology and neuroscience; anthropology and behavioral economics; and systems theory.
  • The leadership issues to manage change are considerable, and in order to make a meaningful difference, leaders must be comfortable with and/or passionate about diversity.
  • The business case for diversity is growing, and in a recent CFA Institute survey of more than 800 institutional investors, the majority (55%) believe that gender diversity in investment teams leads to better performance through diverse viewpoints. Another 28% simply would prefer to hire an investment firm with a corporate culture that is supportive of gender diversity.
  • Similarly, among CFA Institute members, 53% say the business case for improved diversity in the industry is strong or very strong, and this result is similar across geographic regions. Only 14%, however, say the speed of uptake of diversity and inclusion practices will be fast. The majority (58%) say change will happen moderately, and 23% say it will be slow.
  • Specifically on gender, the representation of women in investment firms very often resembles an imbalanced pyramid by seniority of 30%/20%/10%—that is, its professional entry cohort is around 30% female, its middle rank is around 20% female, and its senior leadership is around 10% female. Over a 5- to 10-year period, some improvement in the balance is likely.
  • One factor influencing the narrative is that gender diversity is attracting regulatory scrutiny, but unintended consequences may arise if firms are tempted to use quick-fix solutions in response.