How to ACT: Guidance How to use it
01. Overview
Our approach recognises the importance of transparency and disclosure, but also the pressures that different stakeholders are under to collect and review this information. The framework has a dual purpose; it enables firms to respond to requests for disclosure in a structured way, describing how their actions and behaviours match up against their own stated values. At the same time, the structure creates a picture for the business to see where they are, what is working and where to focus resources, ultimately supporting the business to progress and change.
This approach was designed to enable clients to drive change by allocating resources and responsibility and monitoring progress. It is not an additional set of activities that firms should be carrying out, it is intended to help transform companies to be more connected and elective.
02. Foreword
Investment companies play an increasing role in shaping an equitable and sustainable society, as they drive global change and action via their investment practices. The expectations of stakeholders, from clients and employees to wider society, is for investors to demonstrate evidence that value creation and stewardship of wealth is in responsible hands because they are a responsible business.
A firm’s culture and values are central to understanding how it will deliver on its real- world commitments and this includes its approach diversity, equity and inclusion (DEI). Whilst regulation is in the pipeline alongside growing stakeholder demands for disclosure, there is little guidance for investment companies to be able to tell their story.
The ACT Framework has been created to address this gap, as a standardised way for investment companies to understand, create and progress cultural change and be able to communicate progress effectively via reporting. Developed with and for the investment industry, it recognises the importance of creating a positive culture of inclusion as being intrinsic to creating sustainable growth and tangible outcomes for clients.
The framework enables firms to talk about their commitments to important existing initiatives that aim to increase diversity and inclusion through particular lenses, such as the Women in Finance Charter, Race at Work Charter, or Disability Confident in the UK, the incoming requirements for board diversity across the EU, or in the US compliance with Nasdaq board diversity rules, or signing up to the Disability Equality Index. This will help create responses to a number of disclosure requests. And alongside the proliferation in initiatives and individual causes that firms might support, the framework encourages a more strategic approach, by asking firms to consider how they measure the impact of that support. It encourages the firm to have a coherent approach across the business, consistency in how policies and processes are applied and an open conversation with staff along the way. The goal is to link external commitments and internal values. The ACT Framework is governed by a Stewardship Council of practitioner stakeholders.
03. The role of culture
04. How to ACT: Framework
The ACT Standard of Corporate Culture captures the essence of an Investment Management company’s ‘heart and soul’ and provides professional investors with a framework to assess, measure and catalyse movement towards more diverse, equitable and inclusive firms. Embedding and living values within an organization is an ongoing journey, but underpinning it is a commitment to continuous positive progress.
This document sets out the ACT Framework for individual firms, which is comprised of three key pillars:
Each pillar has three components – Action, Challenge and Transparency.
Action—sets out your firm’s intentions, objectives, commitments
Challenge—provides a framework to assess delivery against those objectives and a gap analysis of intent versus output
Transparency—the mechanisms to demonstrate achievements and progress
The framework aims to allow you to articulate, assess and demonstrate how the firm’s external and internal cultural values on diversity, equity and inclusion align. Recognising that this is not just a journey but an iterative one, we encourage firms to reflect on their responses to the Transparency pillar and use them to inform future Actions, creating a positive feedback loop.
This is an iterative journey, so we encourage firms to reflect on their responses to the Transparency pillar and use them to inform future Actions. This will create a positive feedback loop.
Fund buyers are encouraged to commit to requiring asset managers to complete the full question set, via Door’s online platform.
Disclaimer: Nothing in this document constitutes specific advice to a business, it is written to suggest a range of actions and approaches that can be taken following internal review and according to what is most appropriate to each organisation.
05. How to complete the ACT Framework
The nine areas of the ACT Framework are a standardised approach to culture and inclusion across the external business commitments and internal values. This enables firms completing it to pinpoint good performance, where to improve and how to challenge itself to do so. The firm can then communicate their approach to stakeholders.
How to use this guidance to complete the ACT Framework:
The process of finding the right internal advocates and collecting information can take time. It is expected that the full cycle will include some months for completion and sign off, and some months for the review to identify gaps, ways to progress and success stories to build upon. Completing the framework is cyclical:
Identify appropriate internal team responsible for overseeing the process
Access the ACT Framework questions via the Door platform
Collect relevant information and data on internal processes and external commitments
Create internal visibility and seek senior sign-off
Provide responses to the RfP team to complete via the Door platform
Share with clients and stakeholders – contact City Hive to learn how to use the ACT logo
Use responses to review the firm’s performance and create action plans