How Constrained Decision Making, Along With Legal and Compliance Leadership, Can Help Reduce Fund Manager Bias (Part Four of Four)

Despite questions about the efficacy of implicit bias interventions, fund managers and individuals have autonomy to address these unconscious stereotypes. Notably, managers should create processes that constrain decision making – such as establishing staff performance criteria prior to conducting employee evaluations – thereby preventing individuals from acting on biases in the first place. Legal and compliance leaders can also play important roles in shaping the cultures of their organizations by educating employees, conducting organizational audits and promoting buy-in for practical policies. This final article in a four-part series evaluates methods for constraining decision making and reviews the role that legal and compliance leaders can take to promote diversity and reduce implicit biases. The first article discussed the lack of diversity within the financial services and alternative investment management industries and why fund managers should focus on diversity. The second article analyzed diversity training; performance ratings and hiring tests; grievance procedures; and specific actions managers can take to promote diversity and inclusion. The third article explored implicit biases, their harms and whether they can be reduced in both the short and long term. See “Four Steps NYC-Based Fund Managers Should Take in Light of Newly Enacted Law Prohibiting Compensation History Queries When Interviewing Prospective Employees” (May 11, 2017).

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