Once upon a time, inclusion and diversity were just buzzwords for companies – thrown around at conferences and industry events, without any real action behind them. But in recent years, maintaining a focus on upping your gender balance as an employer, and providing an inclusive atmosphere, come with real consequences. Being aware to sensitivities and differences, whether in the LGBTQ world, or whether you have disabled employees, is no longer just a tick the box exercise. It really matters. Staff morale, negative press, even company performance, are all at stake.
This is where the exchange traded fund sector is at an advantage. It is a younger, more dynamic and arguably more innovative corner of the finance world. A classic case of the ETF industry leading the way was in 2016, with the launch of the SPDR SSGA Gender Diversity Index ETF (SHE), which invested in companies that had a certain number of women at board level. The fund became the most successful fundraiser of the year. Organisations like Women In ETFs, focused on education and networking, also ensure that women in the industry can push boundaries, become leaders and inspire others to succeed.
Yet there is plenty of room for ETF-oriented firms to grow in the right direction. Are there an equal number of women at the company’s senior levels? Is there proportionate representation of people of colour, and people with disabilities? Are there chances to work remotely, part time, or in a job share? Employers should know that generations X and Y want flexibility – a recent UK-focused survey found that 92% of younger people want to work in a flexible job, yet only 11.1% of jobs paying more than £20,000 provide this opportunity.
The big questions – for example on shared parental leave, equal pay and anti-discrimination company polices – need to be asked, but the smaller issues also need to be addressed. Look at your website and your messaging – talking continuously of sport as a metaphor for team success might not send the inclusive message, whether addressing staff or clients. A mentoring scheme might help women to climb the ranks if they don’t have the same “vertical networks” as men tend to do. And certain retention schemes and incentives can encourage women to come back to work after having children.
The stats are rather poor at the moment – only 5% of Fortune 500 company CEOs are women, and the highest number has only been 32 women since the list was created in the 1950s. However, the financial world in general is definitely making progress. The Women in Finance Charter, launched in conjunction with the Treasury in the UK, has around 300 firms signed up, which are all willing to increase the number of women employees at all levels. Several government-backed initiatives, like the Hampton-Alexander review in the UK, have all set a target of 33% female representation in senior leadership by 2020. And an increasing number of social and ethically-minded ETFs will deliberately not invest in companies that do not try to do better.
That doesn’t mean we have to stop at 33%, or even 40%. Targets should be ambitious, and employers should think long and hard about how they will reach them, or risk being left behind. By taking diversity, gender, and workplace flexibility into account, those in the ETF business will be well-positioned to attract the next generation of talent, and retain current valuable employees in the process.