UK DEI Code
CFA Institute has released the UK DEI Code, which aims to enhance diversity, equity and inclusion in the investment industry and strengthen financial institutions’ commitment to these issues.
The launch of this code is based on the US DEI code previously launched by the CFA Institute. Currently, more than 160 companies have become signatories of the code, with assets under management exceeding US$18.3 trillion.
Development of CFA Institute’s DEI Code
CFA Institute seeks to set the best standards for the global investment industry to assist them in meeting their fiduciary responsibilities. However, when considering the issue of Diversity, Equity and Inclusion (DEI), each jurisdiction involves different factors, such as demographics, culture and social customs. These factors make it difficult to establish a globally consistent DEI code.
Related Post: Origin and Development of Diversity Equity and Inclusion
Therefore, CFA Institute decide to specify DEI code on a region-by-region basis, starting with the United States and Canada. This UK DEI Code is the result of CFA Institute adjusting the previous DEI Code in cooperation with local institutions. The Institute plans to continue issuing similar code in the next few years.
Contents of CFA Institute’s DEI Code
CFA Institute has developed six principles in the UK DEI Code for signatories:
- Principle 1: Expand diversified talent channels. Diversity of talent is critical to the long-term success of the investment industry, and signatories should eliminate stereotypes of talent, conduct publicity campaigns targeting common groups, and include some under-represented groups in recruitment.
- Principle 2: Implement an inclusive and equitable hiring process. To attract and acquire great talent and meet their fiduciary responsibilities, signatories need to ensure that all aspects of recruitment are fair and inclusive. Interviewers are required to attend educational training and provide candidates with a timeline of the process and provide them with an objective, consistent experience.
- Principle 3: Implement an inclusive and equitable promotion process. Good promotions are important to employee recruitment and retention, and signatories should establish robust promotion programs and assess whether there are biases in talent reviews and job assignments. Management also needs to understand the career plans of employees within the team and encourage employees to seek promotion opportunities.
- Principle 4: Promote the development of DEI at the company level. Signatories should incorporate DEI-related topics into management discussions and establish a corporate-level DEI governance structure. Management should also present the DEI plan to employees and carry out activities to accept suggestions from all levels of the company so that all employees can participate in DEI construction.
- Principle 5: Promote the development of DEI in the investment industry. Signatories can encourage other stakeholders, including customers, suppliers, partners, etc., to participate in DEI practices in order to achieve positive externalities. These measures can also establish a responsible company image and attract more investors to understand the company’s DEI development.
- Principle 6: Report DEI progress. Signatories are required to report on DEI developments annually and establish a DEI reporting framework within the board of directors and senior management. The reporting framework includes data collection, processing and analysis processes, and is continuously adapted to the actual situation. DEI should be viewed as a long-term strategy with positive return expectations.
CFA Institute’s Requirements for DEI Signatories
CFA Institute requires signatories to measure DEI progress against a reporting framework. Signatories need to confirm baseline conditions and regularly evaluate DEI development progress. Signatories should also establish a DEI governance structure that includes all employees so that formal DEI initiatives can be developed.
CFA Institute believes that the human resources department of signatories can work with business departments to provide information in collecting and analyzing data to integrate DEI principles into the overall business strategy.
Reference:
CFA Institute Launches DEI Code for the Investment Profession in the UK
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