In recent years, diversity has moved from being an important aspect of the equality agenda to a business imperative, especially in delivering investment performance. At UBS Asset Management, we want to actively challenge both internal and external mindsets around the business imperative for diversity.
As the world has started speaking more openly about systemic racism, the role of allies has received renewed attention. The Oxford English Dictionary defines ’ally’ as a person or organization that cooperates with others for mutual benefit. In our context, we think about it as fostering a culture of allies in the workforce, helping to drive real change for diversity and inclusion. Our discussion today is about what it means to be an ally, and what each of us can do to help drive positive change.
It's fairly well established now that with regard to opportunity, allies have a much greater capacity to move the needle on diversity and inclusion, than the individuals who are directly affected. A recent study1 found that when individuals engaged in diversity and inclusion efforts on their own behalf they were usually either minorities or women, and they were often penalized for that. But if somebody stepped in on their behalf, they were not penalized for engaging in that behavior. It's very intuitive that sometimes we are a better advocate for others than we are for ourselves.
There are three distinct phases of the allyship model that I think of as a maturity curve that people often move through intuitively – from being an ally to one, to an ally to some and finally an ally to all. It involves a shift in mindset where we’re focused on everyone being inclusive to achieve mutual benefit.
Many people ask how to move from one phase to the other. And so we've developed a tool called the empathy triangle representing the three parties involved from the Ally’s perspective. These are questions that you need to ask of yourselves when you step up to be an ally, that will help you empathetically engage and not go barreling in, but also not to be frozen into inaction.
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This chart prepared by the Center for Diversity, Inclusion, and Belonging of the NYU School of Law, explains its Allyship Model for helping others who may be subject to non-inclusive behavior and its Empathy Triangle that provides a guide for reflection for allies, affected persons and sources of non-inclusive behavior.
Being an ally to me is fundamental and I think it's something that we all recognize.
One of the old platitudes you always hear is that every decision made about your career opportunities is made when you're not in the room, and that by definition means that you have to have an ally in that room. What that means is someone thinking differently within that group to be the ally to diversity or inclusion. Allyship is absolutely critical to moving an organization forward.
One example that comes to mind is from the trading floor. I managed trading floors for a very long time, and the classic trading floor is centered around a trading desk that is run, almost universally, by a white male, who manages maybe 15 people and tends to like and gravitate to those people most like himself. That's human nature. When this person gets promoted or is moving on, the firm will ask him who his replacement should be. And it's typically going to be the white male that he's most familiar with and most comfortable with. Allyship at that level is breaking that cycle and developing a process where you have diverse panels to broaden out the thinking.
One of the things we are doing is examining systematically all of these systems we have and looking at the areas where unconscious bias or even blatant bias could exist, and looking to bring the light of day to those involved and change the way those processes work. And we're making progress but we certainly have a long way to go.
Suni: I think in the past, we were taught not to acknowledge diversity in some ways. Year ago, I recall a very senior manager at a different firm who very famously made the statement that gender doesn't matter to him. And he meant it in all the right ways, which is to say he's gender blind, he doesn't consider gender when he's making a decision about a business or a promotion. But the way it came across was that he wasn’t even thinking about diversity, he didn’t care about diversity. I think we've learned about the need to change that.
And I think we've also learned that progress is vulnerable. A recent study conducted by McKinsey & Co. and LeanIn.org2 discussed the vulnerability of diverse women in the wake of the COVID-19 pandemic and that senior women are 1.5 times more likely to leave the workforce as a result of burnout than their male counterparts. And of course it's even worse for women of color. Latinas, 1.6 times white women, and black women 2.0 times white women, are responsible for a all of the household chores, the childcare, all of that. I think we have a new sense of urgency that I hope and believe is going to carry us forward so that we can really move the needle here to get to equality in the workplace.
Kenji: I think people tend to be either under-confident or over-confident. The under-confident people are terrified of saying the wrong thing. I think we all have been in scenarios where we thought, ‘Oh, I should say something, but what if I say the wrong thing? What if I use the wrong word for this group? What if my terminology is wrong?’ For example, I know a university president who's an incredible extemporaneous speaker. The only speeches that he writes out and delivers verbatim are diversity and inclusion speeches. He doesn't want to take those risks.
And overconfidence comes in when we're so eager to do the right thing, we're so eager to get in there that we go barreling in and later on realize that we should have been more careful, asked more questions.
For both types of situations, I think that the empathy triangle I shared really helps, and allows you to get over these humps. The empathy triangle reminds us there is a methodology. If you ask yourself the questions, and make sure that you have good answers to all these questions, you're going to be in great shape.
Suni: No, there's not. But part of the reason is that it's difficult to have that information. UBS was, I think, only the second financial firm to put out a diversity report in the United States, and the US is one of the few places in the world where you can ask employees to disclose information about their ethnicity or their sexual preferences, for example. So it's not as easy as many people think it is.
But beyond data it’s important to disclose your targets. As they say, if you can't measure it you can't manage it. So I think that’s an important first step.
I think we are already seeing a big demand for this information in the marketplace as part of the social and governance aspect of ESG investing. As regulations change around the globe and companies are asked or forced to disclose that information I think more data will be coming. So that's the good news.
Kenji: I think it involves learning over time. There will be scenarios in which you can just see opportunities to be an ally, when you can see the affected person in the meeting, for example. The most important characteristic is that you have to be able to fail and get back on the horse and fail and get back on the horse. And if your experience is anything like mine or the people that I work with, you will fail. But the good thing about this is that that next diversity conversation is just around the corner even if you mess up this one. You'll get another chance.
Kenji: So the kind of self-interest that I want to guard against is the kind of self-interest where I really don't care about the affected person, I just want to virtue signal what a great person I am. We don't want somebody who's definitely engaging as an ally to be virtuous.
But I do think that there is a role for enlightened self-interest here, and that enlightened self-interest will keep us on track. When we're not feeling particularly altruistic because we're tired or stressed or what have you, enlightened self-interest will say that someday, maybe even today, I'm going to need an ally. The culture that we’re building is rich with allies and is going to be a culture that I myself will benefit from.
Suni: You always have to start with self-reflection. When I worked on the sell side, I found that mobility was a very big deal, and we were able to move people around and provide opportunities, giving people broader experiences to help them move up.
In the asset management industry we have a business model where clients demand consistency. They don't want to see too much change. so it's really difficult to bring in lateral hires at senior levels. It's very much an apprentice business. So, it will take longer in the asset management industry to change than it would in an area where you can move people around all the time.
We are one of the largest asset managers in the world with almost 1,000 investment personnel, but we only hire in the 10s each year, so it's really hard to move the needle. So as we look internally we have to look at retaining our talent, developing our talent, making sure that we are leveraging every opportunity we have to create what we know as investors: that a diverse group makes diverse decisions, which results in better investment outcomes. So we have a lot to do.
It's an interesting pivot point for the industry in terms of ESG investing. We do ask our vendors and suppliers about their diversity policies, so in that way we can help drive the agenda.