Active ownership tackles diversity and inclusion

Why do we engage?

We believe that companies should strive to create diverse, equitable, and inclusive organizations. Diversity across multiple dimensions brings a valuable range of outlooks and opinions, and when paired with an inclusive culture, can lead to higher quality work, better decision-making and problem-solving, and greater team satisfaction.1 Inclusion is what allows diversity to thrive. Moreover, we identify increasing regulatory pressures around diversity and inclusion; however, progress on this topic remains slow.

What can companies do?

We encourage companies to consider diversity broadly, in terms of both demographics and professional diversity. We recognize that there are significant regional differences in diversity and inclusion definitions and expectations, which we consider in our engagement and expectations of companies. Schroders’ Workforce Diversity Report is an important step to being transparent with data about the diversity of our workforce, so that we can aim for meaningful and relevant aspirational targets (operating lawfully) and be held to account for our progress.

How we analyze diversity and inclusion:

We breakdown our engagement on diversity and inclusion into four key sub-themes:

  1. Board diversity and inclusion: We believe that directors with diversity across multiple dimensions bring a valuable range of outlooks and opinions, and when coupled with an inclusive board culture, ultimately bring about better decision-making, debate and problem-solving on boards. We expect genuine diversity to be present on the board.
  2. Executive diversity and inclusion: We want to promote a diverse representation in key decision-making positions, which allows for greater breadth of experience and perspective. We believe this allows for a greater ability to relate to employees, clients and consumers.
  3. Workforce diversity and inclusion: We ask that the workforce broadly represents the communities that the company operates in and the customers that it serves, and that the company creates an inclusive culture that increases employee engagement and productivity.
  4. Value chain diversity and inclusion: We encourage companies to extend their diversity practices across the value chain, ensuring that the products, services and procurement opportunities they provide do not discriminate and are inclusive for all.

Deep dive: how do we engage?

In blue are the four priority diversity and inclusion actions for our engagement with large and medium companies.2 Where appropriate, we have aligned our engagement expectations with those of the collaborative initiatives we are part of, including the Workforce Disclosure Initiative (WDI) and Human Capital Management Coalition (HCMC).

DiversityInclusion_HowDoWeEngage_5.11.2022_1.JPG

DiversityInclusion_HowDoWeEngage_5.11.2022_2.JPG

Find out more about Active Ownership.

 

1https://hbr.org/2020/11/getting-serious-about-diversity-enough-already-with-the-business-case

2There is no standard definition for large and medium companies, and significant regional variation in what is considered large, medium or small. We recognize that smaller companies face greater resource and financial constraints than larger companies and therefore may need more time to meet our desired outcomes. When assessing company progress against our expectations, we generally compare the progress of similar-sized peers based in the same region.