How to ACT Guidance Pillar 1 : Challenge

01. Pillar 1: Purpose, vision and values

02. Challenge

03. Question set

04. What we expect to see

05. How to get there

06. Measuring success

07. Third-party initiatives

08. Further resources and ideas

Back to Guidance

01. Pillar 1: Purpose, vision and values

An organisation’s purpose, vision and values should be the keystone of communication to stakeholders. This pillar is intended to enable the firm to be able to showcase their approach and demonstrate how their purpose, vision and values are linked and how this is visible across their external position and internal practice.

02. Question set

How does the Firm promote its values and assess whether it is living by them?
How is progress on enhancing corporate culture and supporting DEI evaluated and reviewed, including adequate allocation of resource?
Describe how employees are involved in DEI activities, including participating in the development of the approach, providing feedback and the creation of forums for participation such as employee resource groups.
Are employees provided training to understand and implement the Firm’s DEI strategy?
Explain how the firm assesses and selects initiatives to support, and whether/how it monitors their impact and outcomes.

02. Challenge

The steps taken to ensure that there is a subject matter expertise on DEI and on sustainability and culture that supports the vision set out by the ﬁrm.

The way in which progress is measured, including whether the resources allocated are sufficient.

The way external initiatives are selected, supported and assessed for impact.

05. How to get there

There are several possible options that firms can use to promote and assess progress towards its stated values, including:

Overarching statement referencing culture and values, and if and how it links to strategy
Identification of the accountable executive and their key role
The list of internal policies/ practice and the link to any publicly available documents
Internal KPIs or targets at the firm level and for staff
The list of supported third-party initiatives
The external targets the firm has committed to (and link to reporting)
The ways that employees are brought into any relevant process and where their feedback is sought

It should be clear what the firm will deliver but also what it expects; including key components such as behavioural expectations for senior managers and for all individuals (see: pX/ section), as well as intended outcomes from those behaviours. This can be an opportunity to link internal values with aims and objectives of investment practice and intended investment outcomes (for relevant staff).

Setting out considerations across the business and its activities enables the firm to set clear expectations and guidance for those internal and external stakeholders. This exercise is an opportunity for firms to show employees how they are supporting, enabling and cascading initiatives through the business.

This is often through the creation of specific forums, committees or other channels for participation. The firm can support these channels to be successful by:

Setting clear objectives, such as knowledge sharing, collecting information, or feeding into decision-making bodies
Focusing the channel on activities that are appropriate to the size and complexity of the firm
Enabling actions for staff awareness and training (if needed);
Ensuring an appropriate allocation of resources to meet the delivery of objectives.

The firm should note any areas that are excluded or where practices only apply to a subset of employees. This could be due to regulatory reasons, or where an activity has relevance to a particular level, geography or other factor, or because an approach is being tested that may be rolled out elsewhere if successful.

04. What we expect to see

The firm should be able to speak clearly about why it believes in good culture and inclusion, and to draw a picture of what that looks like. This enables external stakeholders to understand the firm’s approach, and for internal stakeholders to see how they sit within it.

Core to success will be evidence that the firm is moving towards and can demonstrate inclusive leadership. Inclusive leadership goes further than good role modelling, it means that those who are in leadership can show they still have much to learn and are willing to learn from a wide range of other people or sources. It includes a recognition of their own possible blind spots and biases, as well as a willingness to mitigate them. Showing this will help employees and other stakeholders to demonstrate that change is desirable and important, that a pathway is being mapped out, but also to demonstrate a receptiveness to feedback, guidance and the ability to learn through the process.

Promotion of values can be through public and internal means, including online resources such as corporate websites and brochures. Intranets, dedicated networks, groups and forums such as Employee Resource Groups (ERGs) and value frameworks used in employee assessments should aim to use the same terminology.

This gives clarity and a starting checkpoint for how the firm measures performance and whether its actions track with its values. For example, if a firm states that ‘diversity is in its DNA’, we would expect to see more information on why that is an important characteristic for the firm and how it is enabled and manifests.

Firms should also be able to understand how they allocate resources towards their goals, as well as how much. This includes any third-party initiatives that the firm is publicly supporting. Having seen firms eager to sign up to support a number of causes and issues, now is the time for more coherence to emerge from the initial wave of emotive support to a more structured approach.

06. Measuring success

There should be an established way of assessing success and progress towards targets. A dashboard can help track progress. Because targets can be difficult to work towards, especially for smaller ﬁrms that will see a greater magnitude of impact on metrics from the movement of a small number of staff, it is important to create milestones that can help keep navigation towards targets on track and provide reassurance that progress is being made. Some successes may take years to be evident, and it may mean a relatively long period where only limited changes can be measured.

These are all potential areas where employees can receive education, guidance and training on how the ﬁrm is approaching culture and inclusion (note: managerial and staff training on policies is discussed below). This type of learning process can be a group activity designed to reinforce or create networks and relationships, and provides a way to establish the ﬁrm’s view and approach in a digestible way to employees. It is a way of setting expectations and situating employees in relation to the ﬁrm’s values. The education can often be through group sessions such as Lunch & Learn, but is especially helpful if it relates to the ﬁrm’s approach and any material ways that it affects the business.

Milestones to mark progress:

Implementation of forums for staff where they can provide contributions to the development of policies, feedback on existing measures or safe spaces to share ideas, experiences and concerns;
Changes in accepted workplace norms to accommodate changes in the wider world, such as ﬂexibility in working hours or location, reviewing communication and meeting practices to enable democratic contributions and participation;
Role-modelling by senior executives on how they engage with norms and how they embrace inclusive practices;
Creating developmental programmes and ensuring equitable access;
Focusing on an open environment where feedback and idea generation is welcome, and considering ways to support idea generation;
Eliminating small and large barriers to progress by reviewing feedback from forums, surveys and individual line management.

07. Third-party initiatives

Many initiatives ask for public commitment from leading companies because they can leverage the support from a successful brand. This relationship generally begins with confirmation of the firm’s participation on its own corporate website and/or that of the initiative. Such support is valuable for the named initiative as it raises awareness.

Of course, some firms will find they have a multitude of requests, many of which appear to have merits. The decision to support initiatives should include financial and impact factors. It will not be possible to support all causes, meaning prioritisation is needed to enable the most effective deployment of resources. Similarly, not all ideas will be relevant or resonate.

As part of the initial conversations, the firm should aim to identify the activities and commitments it can make to ensure it contributes to progress. This has the dual benefit of creating an approach that assesses value (not just financial; it can cover employee satisfaction or social impact, for example), as well as giving emerging and established initiatives feedback on how they can demonstrate their impact and progress towards goals.

The actions will depend on the scale and scope of each initiative. In some cases, raising awareness and enabling conversations is a critical first step.

Over time, the practical outputs would be expected to advance beyond awareness towards impacts. Meaningful disclosures in this sense include not just performance against targets, but the action plan of how progress is going to be made.

If possible, a multi-year approach to prioritisation should be created to demonstrate direction of travel - perhaps there is a bigger intended impact that is being coordinated. This should include methods for assessing progress against targets, or value-for-money assessments of the previous year’s efforts.

Making the most of the firm's support

Ideally the business should have a process for reviewing the significance of each of the initiatives that they are supporting to their business. This should include:
the intended and actual impact of the business’ involvement
how initiatives are proposed how that support is decided upon, including scales of financial and other contributions
how are employees involved in the process of proposing and deciding
periodic review of all initiatives, including how the firm’s involvement is communicated to stakeholders.