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Change is in the Air, But Will It Stay?

July 7, 2020

By Debbie McLean, Managing Director of Global Relations at CAIA Association I’m one of five women in my family who attended an all-women’s college. Mount Holyoke was established 183 years ago to be the “Harvard equivalent” for women who were not allowed to attend the prestigious university perched on the banks of the Charles River. My college years are far in the past, but these days I find myself thinking about the impact that time had on me and how it shaped my response to the persistent and pervasive gender gap we see in the finance industry today. While progress has certainly been made in recent years, particularly as investors have begun demanding that managers be more transparent about the diversity on their investment teams, the pace of change has been frustratingly slow in the alternatives industry.  Here, women represent less than 20% of employees and hold only 11.9% of senior-level roles. When you account for senior board-level positions, representation of women remains at an anemic 4.7%, according to Preqin. How will change happen? This might seem obvious to you, but at a women’s college women hold each and every leadership position. Students are immersed in a culture of female empowerment which, over time, translates into a deep belief that your voice, your intellect, and your experience matters. Gender is simply not part of the equation. Post-college success for students who have attended all-female institutions is striking.  While women’s colleges represent just 2% of college graduates, women from these institutions hold 10% of CEO roles in the S&P 500 and occupy board seats at one-third of Fortune 1000 companies. The thing is, when you see and experience people like you leading and making a difference, you start to see your own potential to do the same. In short, you are more likely to envision your seat at the head of the table. Historically Black colleges and universities (HBCUs), which provided higher education to Black students in the US long before anyone else would, tell a similar story. While HBCUs represent only 3% of all 4-year college graduates, they produce 80% of Black judges and 50% of Black lawyers and doctors. Research and experience show that HBCUs provide a culture, community, and education that develops young people of diverse backgrounds, races, and ethnicities into future leaders. Can these institutions that demonstrate such successful outcomes for students inform efforts to further diversify the finance industry? Janet Cowell, CEO of Girls Who Invest, Lindsay Burton, CEO of the Kayo Institute, and Amanda Pullinger, CEO of 100 Women in Finance, are leaders at the forefront of efforts to close the gender gap in finance. They had much to say about where we should be looking for answers when they joined me last week for a candid conversation about the impact of COVID-19 on diversity initiatives and how we can ensure that when we talk about change, we are being truly inclusive – even beyond gender. What I learned from our conversation is that while each of these women takes a different approach to achieving their missions of affecting change in a male-dominated industry, there are clear commonalities in the value they place on empowering girls and women, prioritizing robust education, providing access to relatable role models, creating supportive, trusted communities, and offering early exposure to the industry. They are leading the way to bridging the chasm of inequality, and yet the question remains: How do we bring these programs to scale? I hope you will listen to my full conversation with these remarkable, pioneering women in which we explore how COVID-19 has reshaped every aspect of life in a way that truly could make this moment in time a turning point. This pandemic has happened in parallel with a global movement, driven by a public fed up with racial injustice, that has forced leaders everywhere, including in the investment industry, to begin to speak openly about long-standing discrimination, exclusion, and bias. Could this be an era-defining moment, an opportunity to create the type of bold, meaningful, and lasting change that can actually move the needle and make the finance industry more inclusive and reflective our society.

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