Socially-conscious leadership: Driving value through diversity

Mar. 8, 2020

Socially-conscious leadership: driving value through diversity

 

Author: Sarah Borg-Olivier, COO and Senior Vice President,  March 2020

Diversity and inclusion are defining issues for our generation. The corporate landscape has shifted from a generation ago, with greater acknowledgement today on why broader perspectives and experiences are needed to successfully navigate the growing complexity of challenges in our modern world.

Sarah Borg-Olivier: Diversity and inclusion efforts support the goal of true gender equality and also drive tangible economic value. A study by McKinsey & Company reported that closing the gender gap in the workforce could add up to $28 trillion to global GDP. A report by the Harvard Business Review noted that venture capital firms that increased their proportion of female partner hires by 10% saw, on average, growth of 1.5% in overall fund returns each year and had 9.7% more profitable exits. In private equity, late last year the Financial Times reported that buyout teams with at least one woman outperformed all-male teams by an average 12% of IRR and a remarkable 52 cents per dollar invested. Companies increasingly recognize the value of adding different voices and perspectives to the conversation, which improves decision-making and enriches and strengthens corporate culture and business competitiveness over the long term. But there is still so much more to do.

Progress is happening especially slowly at senior levels. We can and should be doing more to bring about change. Our ability to consciously ingrain diversity and inclusion is critical to long-term resiliency, innovation and relevance of any business, from creating value and improving performance to better aligning with key audiences, whether they are customers, clients, partners or investors.

At InstarAGF, we are proud of the culture and diverse team we are building and of our focus on professional development and equal access to opportunity across our firm. We believe that a strong, collaborative corporate culture is a key differentiator in today’s market, both in recruiting and retaining talent, attracting capital, and forging deep relationships with partners and communities.

 

Making it Personal

SBO: From an early point in my own career, I had the opportunity to work with a terrific group of clients, including C-suite executives and boards of directors. I became interested in the qualities of effective leadership and strategy and began to see that even though I did not have formal education in finance, my own skills and unique perspective and ability to manage and build relationships around strategic objectives could be of equal value in the private equity marketplace. My role as chief operating officer at InstarAGF builds on everything I have done professionally to date. It is also personally meaningful to me in that infrastructure investing has such a powerful impact on a community’s quality of life and economic opportunity. In this sector, we are really in a special position to influence and effect change within our own firms and in the business community and world around us.

How did you get started in the finance industry, and what drove you to pursue this path?

Lydia Gaylord
VP and Head of Institutional Business Development

I decided to pursue a career in finance because it is an exciting field to work in and so relevant to understanding dynamics around the world. In my prior roles, I’ve always reported to women and they all have been influential in my decision to continue pursuing my current career path. Notably, these women have pushed me to develop not only my hard skills, but also to embrace my soft skills, which are oftentimes under appreciated in the workplace.

Cathy Xue
Associate Vice President

I studied economics, pursuing a career in finance because I wanted to make a real impact in the operation of various businesses. I initially joined the industry because my parents both work in related fields, with my mother being a particular inspiration — she was one of the first women to complete an MBA in China and showed me how to manage a career and a family at the same time.

Megan Newman
Co-op Analyst

I am an undergraduate student at Wilfred Laurier University, studying Business Administration and Financial Math. I started my co-op role with InstarAGF in January of this year and have been working closely with the team on existing assets and deal origination. I chose a career in this industry because I was interested in investing and enjoyed getting to work on impactful projects.

 

The Business of Change

SBO: According to Preqin’s recent Impact Report: Women in Alternative Assets, globally, women on average make up 19.4% of all employees in the private equity sector. The gap is even larger at the senior level, with women occupying on average only 10.9% of senior positions as a proportion of total senior employees. Over my own career, it has not been unusual for me to be the only woman at the table, but it is less common today than it was 15 or 20 years ago. It reflects the progress that is happening, albeit slowly.

How have you seen the gender mix progress over the course of your career, and why is it so important for business to have a diversity of thought and expression at the highest levels?

LG: I believe we are seeing more change than ever today, but that we still have a long way to go in terms of female representation across all levels of an industry and across all different job functions within an industry. Progress needs to start at the grass roots level, at home and in schools, in order for the industry to continue evolving. For a business to grow and evolve, it is critical to have diverse input and a culture where professionals feel enabled to express their opinion. Having diverse views helps counterbalance group-think mindsets whereby individuals tend to evolve towards thinking the same way and adopting the same beliefs. It is important to not only accept, but actively encourage dissenting views as part of group discussions.

CX: I think what’s important for me is that as women our contributions are viewed with the same criteria that are used to evaluate contributions from men. In investment banking and private equity, I have seen some progress in gender mix. I started my career in an investment bank where I was the only woman on a team of 60, and today at InstarAGF about a third of the whole team is female, which I really appreciate.

MN: To my knowledge, women are becoming more active in capital markets and are able to take their careers farther. On a day to day level, this means women are more accepted in the workplace and their contributions are given both greater consideration and appreciation. It’s important to emphasize a corporate culture that is accepting of women and their roles in the workplace.

 

Shaping the Future

SBO: While change is happening, a number of studies estimate that at the current rate gender parity could take up to 100 years. To take even greater strides, companies need to make progress earlier in the talent pipeline, including re-thinking how and where recruitment is done to get young women interested early on in all private equity has to offer. We must also focus on retaining women as they advance to progressively more senior roles, which is where corporate culture, supportive policies and equality of opportunity can have a significant impact.

What changes have you seen companies initiate that made the biggest impact? What advice would you give to women interested in a career in finance?

LG: I’ve seen companies intentionally include women candidates within their process for every single role for which they are hiring. To effect change, you have to be intentional, and a great starting point is making sure your candidate pool is diverse. I would advise women interested in this industry to seek out relationships and mentorships with other women in the industry across different job functions to learn about the industry, the different types of companies within the industry, the major players, different career paths, etc. LinkedIn is a great tool for reaching out to people, and it helps to find a commonality such as a shared school or shared previous employer when introducing yourself to someone new.

CX: I think what’s most helpful is when organizations adopt solid policies with meaningful impacts on women’s lives. For example, making sure maternity leave does not impact a woman’s career progression and compensation is something that’s important to many. My advice is that it is okay to be different. Just remember that you can do as good a job as anybody else if you allow yourself to.

MN: In my opinion, one of the most impactful changes is the increase in mentoring groups and spaces. At my last co-op, there was an employee group dedicated to supporting women in the workplace. On a more casual level, mentoring and support offered to women, especially those of a younger age, can have a truly impactful influence on their career paths and progression.

SBO: As we all prepare for a time of rapid and extreme change, my own advice is to stay focused on your
goals, take advantage of professional development opportunities, have confidence in your voice and capabilities, and surround yourself with other motivated and supportive individuals. 

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