Analyse culture with ACT
Financial crises and scandals have tarnished public perception of the investment industry. Many of these could have been avoided by better governance and transparency on culture but knowing this has not benefitted the firms that are striving for higher standards.
Growing focus on producer, not just product
Culture and diversity have become a standalone pillar of client due diligence, alongside other ESG factors. Professional investors are increasingly under pressure to uncover greenwashing in all forms, but lacking a structured way of having nuanced conversations.
For professional fund investors, ACT improves decision making by quantifying subjective data, improving understanding of a firm and providing comparable data that supports enhanced decision analysis.
By refocusing on good corporate culture we devote attention and energy on the industry’s transformative role in sustainable wealth creation.
ACT provides investors with:
Evidence
Data
The ACT mark shows transparency on culture in a standardised, externally designed way. The framework provides an internal gap analysis and reporting tool to assess management delivery on stated goals and aims.
Regulatory behaviours
Investment companies need to provide more evidence of actions and progress on ‘S’ and ‘G’ issues along the value chain. The requirements of Consumer Duty, SDR, the Corporate Governance Code and FCA proposals on DEI factors need to be addressed.
Enhanced Analysis
Risk Management
By quantifying subjective data, improving understanding of a firm and providing comparable data, ACT supports enhanced decision analysis.
This gives invaluable qualitative insight into investment managers and the environment in which decisions are made.
Understanding and evaluating how an organisations values values are embedded through its policies, processes and social & governance approaches tell us how teams operate and the resources that are supporting those managing investments day-to-day.
Governed by industry practitioners
Strategic inputs, insights and guidance from industry practitioners help to calibrate the framework questions.
Reassurance
Intentionality
The ACT Mark signals a serious commitment to transparency through an external, third-party process. Amid regulatory signals for more coherence on culture, investment firms are increasingly expected to demonstrate how they take culture into account.
It reassures the consumer that the values of the organisation managing their investments are aligned with their behaviours. If a company states they are committed to DEI then this should be reflected in their culture.
Expectations
Asking for ACT status helps demonstrate that there is higher standard sought in the investment process.
Why ask about diversity, equity & inclusion?
Culture is the environment in which teams operate and make decisions. A good culture enables good risk-taking, debate, innovation and trend-setting. Culture encompasses social and governance approaches in a firm, and is also how firms embed those approaches.
Diversity is one element of successful culture and is an outcome of enabling an environment where there is space for everyone and for the business to thrive.
Equity ensures everyone gets what they need to do thrive - which are not necessarily the same things.
Inclusion encompasses how people feel about the culture and how they see their participation.
