Independent investment consultant and private wealth advisor, NEPC has announced the launch of an Investment Diversity Advisory Council (IDAC). The initiative will gather institutional investors to discuss measurable ways to promote diversity within their own organisations, as well as in their investment decisions.
According to NEPC, IDAC will provide a forum for the largest institutional investors in the US to discuss the academic/empirical evidence and business cases that support diverse decision-making, best practices to promote diversity in finance, and data-driven strategies to track progress over time.
INVESTMENT BENEFITS
“There’s an abundance of evidence to show that investment programmes benefit from the different perspectives and ideas that come from a diverse and inclusive workforce,” said Sam Austin, Partner, Chair of NEPC’s Diversity and Inclusion Board, and Co-Chair of the firm’s Diverse Manager Committee. “At NEPC, our goal is to be a clearinghouse for information and ideas on how to improve investment outcomes for our clients and we believe diversity is an important element in improving the sustainability of those outcomes. This open forum will allow us to engage with our clients directly in conversations that help all stakeholders – including our firm – expand our definitions of diversity and continually improve the measurement benchmarks we use to track our collective progress.”
This initiative is said to be a continuation of NEPC’s challenge to the investment industry to embrace and prepare for the ever-changing landscape of investing. “I was pleased to see NEPC, our investment consultant, create yet another programme to sharpen their focus on diversity in the investment industry,” said Sean Bill, Chief Investment Officer at Santa Clara Valley Transportation Authority. “We have a very diverse workforce and a Board of Pensions, so the Investment Diversity Advisory Council was something that immediately resonated with our leadership team. We’re looking forward to working with NEPC as we continue to make progress on diversity within our organisation and industry.”
KEY GOALS
The formation of IDAC is also one of the ways that NEPC is meeting its goals outlined in their Diverse Managers, which was formally announced in 2019. The key goal of this data-driven policy is to ensure that diverse managers represent 10% of managers on NEPC’s focused placement list by 2021. To achieve this goal, NEPC has committed to increasing the number of meetings with diverse firms by 10% in 2020 and provide preliminary feedback within three months of initial contact. Acting as an educational resource to the institutional investor community is an essential component of increasing exposure for diverse managers.
NEPC’s Diverse Manager Committee will lead the sessions and act as an educational resource for investors at various stages of incorporating diversity and inclusion into their investment plans. Outside of the IDAC, the Committee’s primary purpose is to identify highly qualified diverse investment firms, particularly those with significant ownership by women and/or underrepresented groups that can best fulfill the unique goals, risk parameters and financial objectives of NEPC’s clients.
IDAC FORUMS
The first IDAC forum was held on 5th February 2020, in Arizona as a pilot for the broader initiative. Ten public funds clients joined NEPC facilitators for a workshop on how to best achieve short- and long-term goals for increasing diversity in boardrooms, vendor lists, workforces and investment manager selection processes. The next forum will be held at NEPC’s annual client conference on 20- 21 May 2020 in Boston, Massachusetts.
Commenting on the initiative, Tom Tull, CIO of Employees Retirement System of Texas, stated: “Diversity is a key focus area for our organisation, which is why we’re thrilled to join the Investment Diversity Advisory Council’s initial workshop. We look forward to working with NEPC in their development of initiatives, education and a roadmap for increasing diversity in the workplace.”
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