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Last month for International Women’s Day, the Investment Funds Institute of Canada invited five influential women who are exemplary leaders in the Canadian investment funds industry to take part in a roundtable discussion called “Insights and perspectives: A conversation among women in the C-suite.”

The candid discussion focused on how much has changed for women in the industry over the past few decades. While we’ve certainly come a long way, progress has been slow despite the ongoing efforts of many investment firms to achieve more diversity, equity and inclusion.

Industry statistics are revealing. In 2022, Morningstar reported that, while there were 1,284 men in portfolio manager positions in Canada, there were only 175 women. That’s one woman for every seven men. And a 2023 Sun Life Global Investments report found that only 15% to 20% of financial advisors in Canada are women.

A 2023 McKinsey study of global private markets from the United States and Canada showed that men in investing roles are about 50% more likely, on average, to be promoted than their female colleagues. It also showed that ethnic and racial minorities represent only 20% of managing-director-level investing professionals.

In 2023, Statistics Canada reported that only one in five board member positions was held by a woman, based on data from 2019 and 2020. Many boards did not have any women members at all. The study also found that women held less than one-quarter of top officer positions in Canadian corporations.

In addition to gender balance, there’s a need for broader diversity across the industry, especially in leadership roles. Canada is one of the most multicultural, well educated and diverse countries in the world, and yet the investment funds industry does not reflect the same diversity we see in society.

This can be limiting to the industry and its ability to cater to the unique needs of diverse investors. A growing body of evidence shows that greater diversity and inclusion can bring measurable benefits to firms and their clients, including better decision-making, enhanced employee performance and engagement, and even improved productivity and profitability.

A Boston Consulting Group report based on 2017 data found that companies with above-average diversity in leadership positions received 45% of their total revenues from innovation, compared to 26% for less diverse companies. The same study found that companies with more diverse leadership reported 9% higher earnings than their less diverse peers. And a 2020 McKinsey study found that companies with women on their executive teams were 25% more likely to have above-average profitability than companies run exclusively by men, and the most ethnically and culturally diverse companies were 36% more likely to be profitable than less diverse ones.

Companies that prioritize diversity tend to be seen as embracing a culture of inclusion and belonging, which helps attract and retain top talent. When employees feel valued for who they are, it makes sense they would be more engaged, productive and loyal to their organization and its culture.

Of course, diversity in this industry is not just about parity in the workplace. It’s also about ensuring that investment strategies are aligned with the needs and values of an increasingly diverse Canadian investor base. Many investors today are looking for investment products that match their values, such as gender and racial equality, climate action and social justice. A 2020 survey by the Responsible Investment Association found that 73% of Canadian retail investors want some of their portfolios invested in diverse and inclusive companies.

Many fund managers are listening to their clients’ wishes and incorporating diverse perspectives into the investment process. This kind of flexible, customized approach to product offerings can help firms remain competitive and attract a broader base of investors.

So, where do we go from here? I believe we have an opportunity to be a leader in diversity initiatives. We could begin by collaborating with schools and other stakeholders to make it easier for underrepresented groups to enter the industry. For example, in the U.K., the Investment Association’s Investment20/20 initiative has broken down barriers for over 2,000 aspiring professionals in the last 10 years.

Our industry is well known for being innovative and adaptable, and that should include embracing diverse perspectives. Let’s take a research-driven approach by following the lead of industries and companies seeing the greatest successes with their diversity, equity and inclusion initiatives.

The possibilities are endless and exciting. Ultimately, these efforts will lead to a more creative and resilient industry that will continue to deliver positive outcomes for investors and for society as a whole.

Andy Mitchell is president and CEO of the Investment Funds Institute of Canada.