Fund managers frequently employ several strategies to increase diversity in the workplace, including training, performance ratings and formal grievance procedures. Simply adopting ostensibly fair procedures can lead to unintended consequences, however, such as backlash, greater hostility toward underrepresented groups and less diversity. Thus, managers must ensure that they properly implement these programs, starting with transparency, accountability and a firm-wide assessment. It is important for decision makers to be aware that diversity structures may create an illusion of fairness, resulting in the underestimation of discrimination; to understand whether, and how best, to implement specific diversity programs; and to use the relevant and necessary data to assess the real-world efficacy of those programs. This article, the second in a four-part series, analyzes diversity training; performance ratings and hiring tests; grievance procedures; and specific actions managers can take to promote diversity and inclusion. The first article
discussed the lack of diversity within the financial services and alternative investment management industries and why fund managers should focus on equitable representation. The third article
will explore implicit biases, their harms and whether they can be reduced in both the short and long term. The fourth article will evaluate methods for constraining decision making and the role that legal and compliance leaders can take to promote diversity and reduce implicit biases. See “What Fund Managers Need to Know About the Legislative Response to #MeToo
” (May 3, 2018); and “How Investment Managers Can Prevent and Manage Claims of Harassment in the Age of #MeToo
” (Dec. 14, 2017).