Want To Invest In Asset Managers Owned And Led By Women And Minorities? #MeToo Part 1: DEI Governance – Forbes – DC Initiative on Racial Equity
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Black American civil rights leader Martin Luther King (1929 – 1968) addresses crowds during the … [+] March On Washington at the Lincoln Memorial, Washington DC, where he gave his ‘I Have A Dream’ speech. (Photo by Central Press/Getty Images)

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Nearly sixty years later, the first two of the steps toward racial justice that Dr. Martin Luther King Junior outlines in Letter from Birmingham Jail—examination of diversity data and multi-stakeholder discussion—are still relevant to investing. 

This article—the first in a series on diversity, equity, and inclusion in investing—probes how to incorporate diversity into investment portfolios against the backdrop of women- and minority-owned firms controlling only 1.4% of the over $82 trillion managed by the US asset management industry. It also examines how investment committees and boards can oversee incorporating diversity, equity, and inclusion into investment teams and investment portfolios. This series of articles is a product of multi-stakeholder discussion among the leadership of numerous nonprofits focused on diversity, equity, and inclusion in investing facilitated by Institutional Allocators for Diversity, Equity, & Inclusion(IADEI). 

Speaking with investment committees about DEI

Diversity, equity, and inclusion (DEI) governance starts with committing to discuss DEI at investment committee meetings. According to a large Midwestern State Investment Board, meeting the legal standard for prudence—that is, making financial decisions using the principles of reasonable risk and common sense—necessitates considering DEI. 

According to New York University Center for Business & Human Rights Senior Associate Director Kerin McCauley, ensuring investment committees include talented women and people of color – and that their voices are heard – strengthens decision making and ability to identify high performance across more diverse networks. Generally having two or more diverse investment committee members is critical to amplify their voices and offset broader resistance to DEI. It is also crucial for non-diverse committee members to raise diversity issues because doing so benefits the investment committee’s work broadly.   

Defining and measuring d


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