As 2018 drew to a close, sexual harassment in the workplace was still making headlines – however, this time not in Hollywood but at the big four accounting firms. Deloitte was the first to take the bold step in early December of admitting it had fired 20 UK partners for sexual harassment and bullying in the past four years. While EY, PwC and KPMG initially remained silent, they soon followed suit; announcing the number of UK partners they had, in turn, dismissed – a total of 17 – over the same period and for the same reasons.
The timing seems fitting as it punctuates a year in which the conversation around diversity and inclusion in the workplace became louder and more urgent across a wide range of industries, including the more opaque world of private equity.
Our own coverage is testament to that. In June, we caught up with Matina Papathanasiou, QIC Global Infrastructure’s co-founder, who spoke to us about the importance of having a diverse workforce, her views on achieving that goal and the efforts being made in her native Australia and at QIC.
Many of her views – including that change must start at the top – were echoed in McKinsey & Company’s January report Delivering through Diversity.
That same month, we reported the $10.8 billion Chicago Teachers’ Pension Fund had decided to pass on Blackstone and Brookfield Asset Management when selecting a fund manager for a $50 million infrastructure commitment, citing those firms’ lack of diversity as a factor in that decision.
Soon after and on the other side of the world, a group of GPs and superfunds banded together to launch the Future IM/Pact initiative in Sydney, to improve gender diversity among investment managers.
More recently, in November, four industry professionals who spoke to us on the sidelines of our Women in Infrastructure summit in London, all agreed that diversity is increasingly becoming an issue, not just as a topic of conversation but as a factor affecting investment decisions.
All the above demonstrate not only increased awareness around diversity and inclusiveness but an awareness that is translating into action. While progress is undeniable, there is also plenty of evidence that there is still a long way to go.
Take, for instance, the Hampton-Alexander Review, commissioned by the UK government’s Department of Business, Energy and Industrial Strategy that looked at gender representation at UK-listed companies. Asked why women were underrepresented on their respective boards, FTSE350 senior executives offered some embarrassing explanations ranging from “I don’t think women fit comfortably into the board environment” to “We have one woman already on the board, so we are done.”
The picture in the US isn’t much prettier, according to McKinsey, which, in partnership with LeanIn.org, conducted its annual Women in the Workplace study and found that, while companies say they are “highly committed” to gender diversity, “the proportion of women at every level in corporate America has hardly changed” in the four years since the study was launched.
It would seem that, while the industry – and the corporate world in general – is on the right path, it certainly hasn’t arrived at its destination. As various sources have told us, both on the GP and LP side – firms and organisations are at different points in the journey. That is something we have witnessed first-hand, having spoken with industry insiders who are transparent and willing to provide an in-depth look at how their respective firms operate on such matters and those who “cannot speak about this at this point” or who “are not allowed to talk about gender diversity”.
Maybe the firms and organisations that are reluctant to speak are waiting for the topic of conversation to change? We expect it will continue. But we also hope it will become a broader discussion that will seriously begin to address ethnicity/race and social background, so that fund managers, institutional investors and the companies they invest in will accurately represent the societies in which they operate and ultimately serve.