More and more professional investment allocators are directly asking about sexual harassment during the fund manager due diligence process, while a rising number of allocators – nearly 1-in-10 – upon identifying sexual harassment issues would still invest with a given manager.
Those are two key findings of the just-released, second annual sexual harassment survey conducted by the Investment Management Due Diligence Association (IMDDA), the exclusive investor-based organisation dedicated to the professionals who perform investment and operational due diligence programs.
“Progress Achieved – Challenges Remain” reveals institutional fund allocators doing a better job of identifying sexual harassment issues at investment management firms they allocate to on behalf of their beneficiaries – but still needing to do more to respond when such problems are uncovered.
“IMDDA’s second annual survey of sexual harassment demonstrates that the global institutional investor community is continuing its efforts to uncover and react to instances of sexual harassment uncovered during the due diligence process,” says Andrew Borowiec, Executive Director of the IMDDA. “The full impact of sexual harassment is, first and foremost, on the victim or victims and that must be addressed,” he says.
“Investors need to maintain their moral and ethical responsibilities while making sure not to ignore fiscal responsibilities. This survey shows we are moving in the right direction,” Borowiec says.
“Progress Achieved – Challenges Remain” seeks to define the risks of complacency regarding sexual harassment and recommends ways that professional allocators can improve Operational Due Diligence to discover, respond to, and seek to prevent workplace harassment in its various forms whenever and wherever it occurs.
The risks of ignoring sexual harassment at investment management firms can be devastating for allocators. These risks include negative media coverage, reputational damage, tough questions and actions from investment committees, protests from beneficiaries, and allegations that professionals simply did not do their job.
In response to some of the findings from the survey, the IMDDA provides recommendations on how investors can improve their ODD processes, including examining HR processes, asking why departures have happened, and interviewing former employees.
In response to the rise of the #MeToo movement in 2017, the IMDDA commissioned anonymous surveys of due diligence professionals at institutional allocator firms. In this new 2019 survey, 78 investors participated representing endowments, pensions, insurance companies, private banks and fund-of-funds. The geographic breakdown of respondents was: 55 per cent North America, 24 per cent Europe, 9 per cent Asia/Australia, and the balance in Africa/Middle East/South America.