CFA Society Netherlands: To DEI or not to DEI, that is not the question
This column was originally written in Dutch. This is an English translation.
A storm has erupted around the implementation of diversity, equality of opportunity, and inclusion (Diversity, Equity, and Inclusion or DEI) in companies, fueled by the inauguration of the new US administration. However, the question that should be at the forefront of companies' minds is how they can attract the best people and get the most out of their employees. This question transcends the ideological points raised in the debate that has arisen.
By Anne-Marie Munnik, Director of CFA Society Netherlands, and Alwin Oerlemans, Head of Product Management at APG Asset Management
Diversity, equal opportunities, and inclusion in the investment sector: we have written about this before. First, we discussed the why, then—in the column “DEI it yourself”—we provided concrete tools. Now there is headwind from the United States, triggered by changes in legislation. Diversity initiatives are increasingly being called into question there. Some states have passed legislation restricting diversity programs at companies and universities.
Large companies such as Disney and Starbucks have been sued for their diversity policies, while investors and shareholders of Apple, among others, have voted against scaling back DEI programs. The company itself referred to its strong compliance with regulations and rejected any such influence on its daily operations and personnel policy. At the same time, we are seeing some companies in the US adjusting their approach by making DEI less explicit and integrating it more into broader talent and strategic initiatives. JPMorgan Chase, for example, announced that it would be changing 'DEI' to 'DOI': Diversity, Opportunity, and Inclusion.
European companies are trying to navigate the divergent laws and regulations in the US and the EU. In the financial sector, BNP Paribas, Barclays, UBS, and Deutsche Bank have indicated that they will continue their DEI programs unabated, with diversity and inclusion as core components of their business strategy.
Diversity and inclusivity are therefore not without resistance. In the debate, DEI is often portrayed as an ideological choice, something you either support or reject. This is unproductive and does not make the core issue any less relevant. Inclusion is not an extra, but a prerequisite for well-functioning teams and good decision-making. Measuring diversity contributes to this, because without measurement and reporting, progress will not be made: What gets measured, gets done.
In our industry, it's all about making well-informed decisions, weighing up opportunities and risks, and striving for optimal returns based on the client's principles. That's exactly why diverse teams and inclusive decision-making processes are so important. Study after study shows that teams with different backgrounds and perspectives make better investment decisions, assess risks more accurately, and are more innovative. It is not an individual exercise, but a joint effort to build a stronger and more future-proof investment world. It requires conscious choices, dialogue, and an open mind. It is not a goal, but a means to an end. A way to make the investment sector stronger, fairer, and more resilient. So the question is not 'to DEI or not to DEI', but how we can achieve the best results together, with all our differences in origin, background, knowledge, skills, and ideas.