A culture of challenge and accountability
“A lot of the problems we’ve seen in the asset management industry over the last few years have been because individuals were not challenged in that organisation. ”
Investment leaders shared honest accounts of how colleagues challenge each other within their organisations - and also hold each other accountable - to encourage respectful culture across teams within their organisations, in the CIO session at the ACT 2nd Birthday event.
Panellists also shared insights into how they have reviewed candidate lists and gone back to challenge diversity within recruitment processes, and where they have had to accept where there are limits in the current talent pool, rather than hiring for the sake of diversity.
Kicking off the session, moderator and co-CEO of City Hive Bev Shah focused on the investment element of their roles and asked the panellists how they are creating an environment for their investment teams to take risks, make mistakes, but ultimately succeed.
“A good fund manager wants to be challenged, they want to be better and have a portfolio that is as effective as it can be for clients,” commented Stephanie Butcher, co-head of investments at Invesco.
She emphasised the importance of facilitating relationships across different departments and teams, and described how Invesco has ensured distribution and fund managers are in client meetings to achieve a more joined-up and transparent approach.
“You want to have an environment where they interact and find areas of debate and difference of opinion. It’s not about forcing consensus,” she said.
Justin Onuekwusi, who joined St. James’s Place as CIO nine months ago, echoed the points on team collaboration: “It is really important for teams to understand different areas where they don’t work to become all-rounders. We have all worked in an investment organisation where those on the investment floor don’t understand the products or the regulation and so on.”
It is fine for teams to have their own “sub-cultures”, he added, but it is important to bring them together to discuss what is the common culture of the firm - he has set up a cultural working group at SJP to foster this concept.
Accountability
Andrew Summers, CIO at Omnis Investments, said he was caught off guard recently as four people he interviewed asked him about the firm’s culture, which he said wouldn’t have happened three years ago, but also prompted him to think about his firm’s values.”For me at this stage, I think it is the concept of honesty. If I am struggling, I can be honest with people about that, and if I see somebody else is struggling, perhaps I can do something to help.”
Echoing Stephanie’s starting comments, Andrew added being challenged and held accountable is also vital, specifically highlighting a culture where challenge is openly encouraged, or even demanded, at every part of the value chain.
“A lot of the problems we've seen in the asset management industry over the last few years have been because individuals were not challenged in that organisation. It might have been the actual appalling behaviour of certain individuals and certain organisations might not itself have necessarily led to bad investment outcomes. But surely over time, a culture that allows individuals to behave in a certain way without being challenged cannot possibly sustain good investment outcomes.”
Recruitment and the talent pool
Bev also posed to the panel the ambition of getting full representation in the industry, but pointed to the problems with quotas and diversity targets.
“The investment team is one of the most visible within the organisation (next to the board). But how do you as CIOs balance the pressure of having to appear to be diverse, versus finding the right skills, and being open to the idea that actually the pool that you have to find those right skills in isn't wide enough?,” she asked.
Andrew argued if he does not have a diverse team it is because something has gone wrong.
“Either our company is not attractive enough to a wide range of people to get that diversity, or it’s down to our recruitment processes; we have not gone out and tried hard enough to find people from a diverse background,” he explained.
Recently he took a deeper look into recruitment processes: “I'm interviewing at the moment, and every candidate was a white male. I don't know anything else about them, but they're all white men. Now, my challenge is, that cannot be the best set of people that we could possibly have interviewed, because I cannot believe there aren't other great candidates that are from different diversity sectors. It's a challenge to go back to recruitment, and say, you need to try harder. If they've tried as hard as they possibly can and come back with seven white men, there does come a point where you have to accept that is the talent pool.”
Jim Leaviss, CIO at M&G Investments, remarked it is particularly more difficult to recruit diverse individuals at senior levels.
“It is hard to get the full range of different diverse CVs coming in at senior levels. I'm much more optimistic about the future pipeline, because it's a lot easier to influence by running graduate programmes and making sure you're advertising those programmes widely to the right networks. I think the pipeline is really healthy, and extremely diverse in terms of the future.”
Justin added it’s not just important to think about recruitment practices but consider how diverse individuals progress and are retained within a company: “And that is about culture, right? The reason a diverse team thrives is because the underlying culture retains them.”
“Justin’s point is absolutely crucial,” said Stephanie. “If we are truly trying to create an environment of respectful challenge within our teams, because that's how we think we get the best results and the best investment results, then you need diversity because almost by definition.
“And you have got to keep them - keep people wondering ‘why have I stayed at Invesco for so long?’ Because it's a great place to work, I really like working with the people, but also I've been challenged.”
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