Willis Towers Watson warns fund managers to reform their culture


Willis Towers Watson has warned asset managers to improve their internal culture and said it will demote companies whose workplaces are not inclusive or pay extravagant amounts to executives.

The group, which advises about $ 2.3 trillion of assets, is one of the top guardians of the pension fund sector of 3 trillion pounds in the UK.

Luba Nikulina, chief research officer at Willis Towers Watson, said the company would treat the culture of asset managers with the same importance as fund performance or other financial metrics.

The asset managers have tried to improve the culture in the invested companies by voting against the management at the annual meetings, but they have struggled with their own situation, as shown by large pay gaps that reflect the lack of diversity.

Willis Towers Watson's managerial selection initiative could drive change by creating a trade incentive.

Nikulina said that last year his company downgraded a manager and rejected two more because "he could not feel comfortable" with his culture, despite being confident with his strategy and investment skills.

She highlighted concern about managers' commitment to the inclusion of women and ethnic minorities. "The culture of inclusion seems to be a weakness [in asset management]"Nikulina said, adding that some groups were symbolic.

Certain managers assume that they can "simply bring in a woman or a non-Caucasian person and then solve the problem."

"Of course [does] no, "she said. "You need to ensure that the person feels that their sight is heard, rather than just being there to mark the box."

She said the "star-man culture" lived in some fund groups and that meant that minority voices could be muffled.

As part of its assessment, Willis Towers Watson is gathering data on the workforce of asset managers and the gender pay gap.

The Investment Association, which represents the British industry, said its members had an average gender pay gap of 31% in the first year of mandatory reporting in the UK, higher than the 28% wage gap for general financial services .

Managers, including Newton Investment Management, Columbia Threadneedle and State Street Global Advisors, reported a growing difference in the second year of data.

The generous parental leave policies offered to men and women are seen as a way to combat the imbalance. Willis Towers Watson began analyzing the policies of the fund groups.

Nikulina's team is also talking to leaders to assess their commitment to inclusion. "Leadership and how this sets the tone essentially shapes the culture," she said.

A study by the Citywire media group last year found that mixed-fund management teams delivered a 0.5% return in three years. The study was based on data from 16,000 fund managers. Nikulina said that while evidence of a link between diversity and performance was still emerging, she believed that a wider range of perspectives were beneficial in making investment decisions.

She added that a strong corporate culture was critical to the long-term success of an asset manager. "Given the conflicting winds currently facing the asset management industry, if the culture is not properly defined and managed, these organizations are less likely to succeed."

Willis Towers Watson is also looking for extravagant executive pay packages and wants to see evidence that asset managers are not just prioritizing financial rewards.

Ms Nikulina said: "What is the purpose of the industry? Is it to make those who work on it rich – or, in fact, to improve the final beneficiaries and improve their well-being? "

She added, "Focusing on more subtle aspects such as why leaders have created the business and the message they articulate about why they come to the office every morning is becoming extremely important."


Source link