EY has sponsored The Hedge Fund Journal’s biennial “50 Leading Women in Hedge Funds” survey since 2011. The latest edition was published in 2017 and honorees included EY’s UK Hedge Funds Sector Co-Leader, Zeynep Meric-Smith. Retaining and promoting women is one dimension of diversity monitored by Diversity Inc, which in 2017 awarded EY the highest ranking in its Top 50 list of US firms. EY has been steadily climbing up this league table for over 15 years. EY has made it into the top 10 for the past 8 years and the top 50 since 2001, in addition to earning a whole host of other accolades from Diversity Inc.
This trophy is among a long list of diversity awards EY has received around the world, in countries including Canada, Mexico, the UK, Germany, Switzerland, Hong Kong, Singapore and Australia. EY also has councils and committees devoted to D&I. EY already appears to be amongst the most progressive companies on diversity metrics but is striving for greater achievements on this front.
EY’s pledge for parity was originally a US-focused one related to remuneration (the White House Equal Pay pledge) but has now gone global with EY’s global Chairman, Mark Weinberger, signing up to Paradigm for Parity (P4P) for the whole firm. P4P aims for 50% of the firm’s senior leadership to be women by 2030; currently, approximately 50% of the trainee intake are women but the percentage at partner level is not yet there.
EY was the first of the Big Four professional services firms to make this commitment, very soon after P4P launched inDecember 2016. “This is in line with our objective of achieving gender parity in the workforce,” says EY Partner and Americas Hedge Funds Market Co-Leader, Natalie Deak Jaros, who was selected for the 2015 edition of the “50 Leading Women in Hedge Funds” survey. EY has chosen to participate in P4P partly to acknowledge the scale of the challenge. “We cannot do this all by ourselves, it is bigger than just EY, and it has to involve the whole business world working together,” says Deak Jaros. Elsewhere around finance, Bloomberg and Willis Towers Watson are early P4P signatories and the target has been taken up by firms in multiple industries.
The business case for diversity
EY’s motives are based on business sense as well as moral conviction. “More diverse boards and companies have a positive impact on performance and innovation,” says Deak Jaros, and numerous studies back up this view. “Diversity creates diverse thinking and helps organisations make better decisions,” she adds. EY Partner and Americas Hedge Fund Market Co-Leader, Dave Racich, underscores “diversity at the leadership level and throughout the firm leads to diverse sets of ideas and innovative ideas focused on different angles. We want to have a great pipeline of talent over genders and backgrounds”.
EY cites a Columbia University report identifying that firms with women in top management roles had greater “innovation intensity”; inter-disciplinary studies where professors from Carnegie Mellon, MIT Sloan School of Management and Union College found teams containing more women demonstrated better logic, coordination, planning and problem solving. Meanwhile, at board level, the Peterson Institute for International Economics found that firms where 30% of directors are female have net profits 6% higher.
For EY, increased female participation is one of many “disruptive” forces that companies must contend with. Others include technology, automation, robotics, customer, shareholder and regulatory expectations. The pace of change gives a new sense of urgency to diversity imperatives. “Women in leadership roles have a positive impact on a company’s ability to innovate, navigate disruption and improve the bottom line,” EY says.
EY may travel towards P4P at different speeds in various divisions and regions. Deak Jaros acknowledges that “we may get there sooner in some parts of the world than others. It is not an overnight shift but more of a cultural shift in how you think about the organisation. We are on a long path of creating a culture where inclusiveness is central”.
The process will be facilitated as EY fosters solidarity towards the common goal with other firms that may hire its staff or vice versa, as this creates a virtuous circle allowing more women to fulfil their career potential as they get promoted within and between companies. EY’s global platform, “Women. Fast Forward”, was launched at the World Economic Forum in 2015, and pursues advocacy, rallying support for gender equality across all industries and worldwide; EY’s People Advisory Services also offers its clients consultancy advice on diversity objectives.
Four key disconnects have been identified, and some of them imply that inconsistencies exist between individuals’ stated beliefs. Survey respondents exhibit cognitive dissonance, which seems analogous to the biases identified by behavioural finance. First, “the reality disconnect” basically means that senior management is “in denial” about insufficient progress towards gender equality within their own companies. This may be partly caused by the second bias – the “data disconnect” – which arises from companies failing to effectively measure their own progress towards gender parity. Many financial firms (eg 41% in banking) are not formally measuring it at all, while others are only monitoring today’s leaders and not considering where the next generation may come from, which reveals they are falling prey to the third bias – the “pipeline disconnect”, whereby firms are not putting in place the right career ladders for senior females to climb. Though the percentage of firms in banking that have such formal programmes is, at 33%, much higher than the cross-industry average of 18%, the obverse of this is that 67% of firms in banking do not have any formal programme in place. Fourth, “the perception and perspective disconnect” reminds us that men and women view problems differently. Specifically, EY’s survey finds that male awareness of under-used, latent, female talent is markedly lower than female awareness of the problem and a surprisingly high proportion of men perceive shortages of female talent. The fifth obstacle, the “progress disconnect”, is neatly summed up by the gaping gulf between words and actions: 71% of business leaders surveyed by EY “acknowledge that diversity in senior leadership is important to navigate disruption,” yet just 13% “expect a significant increase in the number of women in leadership positons in the next five years”. Progress towards D&I targets also varies markedly between industries.
Sponsoring and mentoring
EY recommends detailed responses to each of the disconnects. At a high level, transparent disclosure of diversity, combined with an inclusive corporate culture, address the reality disconnect. Clear targets for diversity milestones and regular progress reports deal with the data disconnect. Formal and structured female leadership training programmes are one aspect of the pipeline disconnect and succession planning should take account of diversity while sponsorship and mentoring should apply to both men and women. “Sponsorship and mentoring programmes are intended to identify young talent early and create a culture where they can succeed and excel and focus on areas they find enjoyable professionally,” says Deak Jaros.
EY has two global formal sponsorship programmes: Career Watch nurtures high potential female senior managers towards partnership while Global Next Gen (GNG) offers networking and development opportunities to men and women. In the US, the Inclusiveness Leadership Program (Americas) provides coaching for high potential staff across all dimensions of diversity, including women. Outside the US, there are three programmes dedicated to women: EMEIA Women’s Leadership Program (EMEIA), Realizing your Potential as a Female Leader (EMEIA), and Navigator (EMEIA). Working groups – and once again an inclusive culture – can tackle the perception and perspective disconnect. “There is an abundance of talent and once we bring it in the door, the challenge is to manage it appropriately to retain them in roles and advance appropriately,” says Racich.
EY has an extensive range of human resources policies designed to be attractive to women. Those for US employees appear below. But crucially, many of these are gender neutral. According to EY’s “Women. Fast Forward” study, organisations need to be culturally aware for diversity, which may include giving men the flexibility to help women go back to work. Therefore, EY offers parental leave to both men and women.
The next generation of female professionals and leaders
EY’s outreach extends well beyond the firm. The lower representation of women in business and finance may be partly because fewer have studied MBAs at business school, but the chain of causation works both ways: real and perceived obstacles to advancement in business may deter women from enrolling in business school in the first place.Which is why EY wants to start its diversity drive as early as possible, and well before young people start looking for their first professional job. “We are doing more and more next generation programmes and recruiting to get in front of the next generation. We talk to teenagers in high school and college studen. It is important for them to have role models in terms of high performing women. Role models also create awareness of how many women are in the roles,” says Deak Jaros. “We want to reach out to our demographic at a stage in their educational career when they may be unsure which way to go. We want to create the right type of culture to attract them,” says Racich.
EY acknowledges that it is naturally harder for smaller firms with very few staff to attain gender parity in terms of ratios of employee numbers. But “diversity is not just about hiring. It is also about creating a foundation of culture for a type of organisation. For instance, an advisory board can help to create a more diverse way of thinking,” says Racich. Indeed, EY has multiple advisory committees that reach outside the firm for broader expertise, insight, and experience.
Specific initiatives that EY is spearheading include the Women Athletes Business Network; Global Women in Business Advisory Council; Worldwide Women Public Sector Leaders Network; Entrepreneurial Winning Women™ Program and NextGen Africa Programme to develop women leaders.
Formal governmental and corporate programmes, policies and processes towards gender parity can be helpful, but civil society is also important. The reality is that not all jobs are advertised anywhere and opportunities for consultancy or entrepreneurial ventures will often arise through spontaneous social interaction. Informal networking with work colleagues is one part of the equation but there should also be opportunities to engage with industry colleagues, outside the office. One respondent to EY’s survey has identified that “The lack of networking opportunities for women can stop them from reaching their potential”.
Many voluntary groups exist to help women advance their careers. EY is involved with organisations including the 30% Club; Committee for Economic Development; The Conference Board Women’s Economic Contribution Subcommittee; International Women’s Forum; SheWorks; WEConnect International; Women’s Business Enterprise National Council; Women President’s Organization; and Women in Parliaments Global Forum.
Focusing on the hedge fund industry, we think it is well served by voluntary groups that some EY staff are also active in. Those where members often work in and around alternative investments include 100 Women in Finance (which was formerly 100 Women in Hedge Funds); High Water Women; Girls Who Invest; Seven Degrees of Women in Finance and Deals and Divas. Professional organisations such as CFA Institute and CAIA Association also hold regular educational and social events. Such gatherings most frequently occur in the major financial centres such as New York, London, San Francisco, and Hong Kong. Though there is less advertised activity in less well-known centres, webinars, and virtual meetings via the internet can reach out to those in remote and isolated geographic locations. EY is clearly demonstrating leadership in D&I, and is excited about the next generation of women rising up in EY and in the wider economy.
EY BENEFITS SPECIFIC TO WOMEN AND FAMILY CARE
EY’s paid parental leave policy in the US increased to 16 weeks for new moms and dads – the US firm now leads professional services in paid time off for new parents (as of July 2016) – new mothers and fathers in the US will now be eligible for up to16 weeks of fully paid parental leave. The new parental leave policy is available to men and women welcoming a child through birth, adoption, surrogacy, foster care or legal guardianship. EY also announced that it will provide generous benefits for fertility, surrogacy and adoption. On average, nearly 1,200 EY people in the US, half of which are men, take paid parental leave each year.
Advanced Reproductive Technologies (ART) and adoption assistance: helps pay expenses for up to a combined $25,000 lifetime maximum benefit per family to cover the cost of ART procedures, adoption fees and surrogacy.
Applied Behavioral Analysis (ABA) treatment for children with autism.
Dependent day care and health care reimbursement accounts: providing tax savings on eligible healthcare and dependent care expenses.
EY Quality of Life: offers US staff through executive director/director levels reimbursement for 75% of the cost up to $500 a year on a list of pre-approved health and wellness categories – gym memberships, exercise equipment, weight management programs, and more.
EY Wellbeing: an internal website that you can use to educate yourself and your family about health and wellbeing topics.
EY Assist: offers you and your loved ones various resources and articles on health and wellbeing including counselors who can provide assistance on a wide range of services ranging from one-on-one consultation for you or your family members, or for diverse services like meal and grocery deliveries, house cleaning and home repair, vacation and event planning, child/elder/self/pet care services and more.
Lactation program: hospital-grade pump, travel kits and accessories available at no cost to all eligible personnel and their dependents.
Up to 10 days (80 hours) time off for personal/family care: provides designated paid time off for personal illness and/or when employees are unable to work to care for family members.
Family medical leave: allows individuals with at least one year of service to take unpaid family medical leave for up to 16 weeks (four more than federally required).
Flexible work arrangements: These include telecommuting, reduced schedules, and compressed work weeks, in addition to supporting and practicing day-to-day flexibility so that people have what they need to succeed in their careers and their personal lives.