Listen to Kim Y. Lew, President and CEO, The Columbia Investment Management Company, Juan Martinez, Chief Financial Officer and Treasurer, Knight Foundation and John W. Rogers, Jr., Chairman & Co-CEO, Ariel Investments.

Key takeaways from the conversation, moderated by Ariel’s Chief Communications Officer, Arielle Patrick:

Philanthropic institutions must employ similar strategies as corporations when setting and measuring progress against diversity, equity and inclusion goals. This not only includes hiring diverse investment firms to manage the capital in a foundation or endowment. It also means that the financial services industry must take an inclusive approach to acquiring, grooming, and retaining diverse talent at the large banks and asset management firms that serve non-profits.

Action Items:

• Endowment and foundation CIOs can take notes from the public sector, like municipalities, which have historically held specific quotas for diversity in their asset manager mix.
• Philanthropic institutions that work with majority-owned investment partners can leverage their role as the client to push for diverse leadership on their account servicing teams.
• Organizations should tie executive pay to diversity metrics – both within their workforce, but also within their asset management ecosystem.
• Large financial services firms play a critical role in grooming and training diverse talent so that they may launch their own asset management firms or take senior investment roles at foundations and endowments later in their careers.

Listen to Les Brun, Co-Founder, Chairman & CEO, Ariel Alternatives, Craig Cuffie, Chief Procurement Officer, Salesforce and Shelley Stewart, Chairman, Billion Dollar Roundtable.

Key takeaways from the conversation, moderated by Ariel’s Chief Communications Officer, Arielle Patrick:

When corporations partner with minority-owned businesses across service verticals, they gain access different sources of expertise while bolstering businesses that can fuel growth in underrepresented communities. While many C-Suite executives have acknowledged the merits of having a partner and vendor base that reflects our broader societal demographics, little tangible progress has been made to-date.

There are 124,000 Black-owned employer firms in the US, representing only 2.2 percent of all employer businesses even though Blacks make up 14 percent of the US population.”¹ Moreover, according to the National Minority Supplier Development Council (NMSDC), Fortune 500 companies currently direct an average of two percent ($125 billion) of their total spend to minority-owned businesses. And yet, their stated target is 10-15 percent utilization of minority-owned vendors. This is a $1 trillion opportunity.

¹ Bruce Katz, Ayiah Josiah-Faeduwor and Avery Harmon, Who Holds the Key to Equity, The Philadelphia Citizen. July 12, 2020

Action Items:

• Corporations should measure all spending by specific category, including professional services.
• Language matters. Teams should replace the term “supplier diversity” with “business diversity.” Well-intentioned ‘supplier diversity’ programs emphasize construction, catering, janitorial services, and other commodity-related fields. These jobs are important. However, this approach excludes high-margin, high-growth parts of the economy. Tracking purchasing data by category allows companies to target categories of spending, especially those outside of traditional procurement that are often overlooked. This includes professional services, financial services, legal, advertising, technology, and other related fields.
• It is important to measure the diversity of executives on vendor and professional services relationships and require these firms to make measurable progress.
• Companies must recognize that minority-owned businesses need access to customers in addition to access to capital. This is the only way they can scale and grow.

Listen to Stephanie Creary, Assistant Professor of Management, The Wharton School at the University of Pennsylvania, John W. Rogers, Jr., Chairman & Co-CEO, Ariel Investments and Sandra Sims-Williams, Chief Diversity Officer, Nielsen.

Key takeaways from the conversation, moderated by Ariel’s Chief Communications Officer, Arielle Patrick:

Companies can best meet their customers’ needs when they are committed to diversity across all levels of their organization. Measuring and reporting on employee and leadership diversity needs to become more nuanced and granular—and corporate leaders must be held accountable for progress towards these goals.

Action Items:

• Corporate boards should tie executive pay to diversity metrics.
• We recommend that institutions adopt the Rooney Rule—the NFL policy requiring every team with a head coaching vacancy to interview at least one or more diverse candidates. In this case, companies must expand it to require that more than one diverse candidate be interviewed for open senior positions and/or board seats.
• Before setting clear hiring goals, management teams must first focus on the integrity of their data. It is critical to develop clear and specific workforce diversity data at all levels and set tangible targets. When measuring, companies should consider breaking out diversity metrics by racial and ethnic groups.
• The Chief Diversity Officer should have a seat at the table not only with the management team – but also in the boardroom, and with product development and services teams.
• Leaders should conduct listening tours and offer educational resources across the employee base about why diversity is powerful for business.
• Companies should employ multiple strategies to achieve inclusive business operations, including: empowering product services teams to include diverse perspectives in their innovation, research and development processes; and encouraging employee participation in 401k plans that are managed by diverse investment firms.