While CalPERS and CalSTRS have been holding a joint diversity forum each year since 2015, the June 22 virtual event may have found its moment.
This year's event will feature a diversity dialogue with SEC Commissioner Allison Herren Lee; a panel on board diversity and human capital management with New York state Comptroller Thomas P. DiNapoli, who is also sole trustee of the $254.8 billion New York State Common Retirement Fund, Albany, and State Street Corp. CEO Ronald O'Hanley; and a diversity dialogue with New York Stock Exchange President Stacey Cunningham.
The forum is being held for investment industry and business executives and other professionals.
Marcie Frost, CEO of $469.8 billion California Public Employees' Retirement System, Sacramento, said she has seen modest improvement in diversity in the money management industry over the last few years but it has much further to go.
"Frankly, what is lacking in the space is good disclosure," Ms. Frost said. "That is why we push as hard as we do with the SEC and the corporate engagement side."
CalPERS and other asset owners are working with the SEC in the hopes that the agency will require companies to include diversity data in their regulatory filings. CalPERS, CalSTRS and many other asset owners are also pushing companies to diversify their boards.
"There has been modest improvement but I can't say that with data today," she said.
CalPERS is taking its own advice. For the first time this year, CalPERS included diversity questions in its internal staff survey taken in November. Seventy-five percent of employees voluntarily answered questions about ethnicity, sexual orientation and gender. The majority of each demographic group said they feel they are treated fairly, with respect and dignity and have a sense of belonging at CalPERS, according to the survey results released at a June 16 meeting of CalPERS' performance, compensation, and talent management committee.
Asset owners want to do business with investment managers led by diverse management because diversity adds to performance, Ms. Frost said.
Among the industry organizations working on the issue is the CFA Institute, which, for example, in 2019 launched the Experimental Partners Program, a series of roundtables that include asset owners and money managers. The CFA Institute has also published research on the topic including a recent survey showing that women account for 15% or less of all money management executives at the CEO, CIO, portfolio managers and research analysts levels.
Sarah Maynard, London-based global head of external inclusion and diversity strategies at the CFA Institute, is scheduled to appear at CalPERS' and CalSTRS' diversity forum to share best practices for fostering diversity, equity and inclusion in the money management industry.
Changes are slow in the money management industry but "we are definitely seeing them," said Christopher J. Ailman, CIO of the $299.8 billion California State Teachers' Retirement System, West Sacramento.
He said the CFA Institute's work to create best practices for increasing diversity, equity and inclusion in the industry "raised the bar for everybody."
Mr. Ailman was part of the CFA Institute's steering committee on diversity and inclusion that introduced a process for money managers to expand DEI at their firms.
He said that money managers are becoming more aware of unconscious bias, which can which can hinder female and minority executives from getting hired and promoted to top positions at firms.
Unconscious biases arise when people stereotype groups of people without being aware that they are doing it.
"People are more attentive to the language they use and unintended bias" in making hiring and promotion decisions, Mr. Ailman said.
CalSTRS officials would like to see diversity and inclusion all the way up the corporate ladder at money managers, he said.
"We're seeing managers being much more attentive to that and hiring is getting much better," Mr. Ailman said.
The pandemic forced most people in the industry to work from remote locations and business leaders learned they can run their companies that way, he said.
Working from home "will be an enormous opportunity for working mothers" and women integrating back into the workforce after maternity leave, Mr. Ailman said.
This is more of a challenge at private equity firms because they make such long-term investments. Women returning from maternity leave are faced with projects that have been going on in their absence and picking them up midstream, he said.
At a fixed-income management firm, for example, there is a constant daily rhythm and new mothers returning to work can more easily reintegrate into the working environment, he said.
Firms including alternative investment managers need to work harder at giving a more diverse set of executives career advancement opportunities.
"Investors come in all shapes and sizes and they need to be more open," he said.
CalPERS' Ms. Frost agrees. She said she has been "fortunate" that she has not experienced bias or seen it play out.
"But I want to make sure that our systems are free of bias," Ms. Frost said.
Even so, she added, "too many times I am the only female in the room."
"I am fortunate that I have a professional network and my male counterparts know that this is not an acceptable ratio," she said.
Still, asset owners are eager to see more diversity, equity and inclusion among their money managers.
"If you cast a wide net, fair competition will ensue," she said.
Registration for the conference is free. The agenda and registration link are on CalPERS' website.