How to ACT Guidance Transparency

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01. Pillar goals

The way the firm invests in and values people is central to success of the business and a good culture. Increasingly, stakeholders want more visibility on how this is enacted. Firms should anticipate potential and existing employees, clients and other stakeholders having questions about their approach and how they ensure that policies are equitably applied and doing the intended job.

02. Question set

Does the Firm have a formal policy on Diversity, Equity & Inclusion (DEI) and equality in the workplace?
a. Policy on Diversity, Equity & Inclusion (DEI) and equality in the workplace.
What are the ways in which the Firm demonstrates and measures the impact of its DEI commitment?
How does the Firm publicly talk about its progress on diversity and culture, referencing any public commitments and organisations the Firm may be part of, e.g. Women in Finance Charter, Race at Work Charter, Disability Confident?
a. How has the Firm’s public profile changed in the previous 12 months (or specify time frame)?

02. Purpose, vision and values

Being able to demonstrate the real-world impact articulated in the vision and that this is connected to investment practice as well as internal business practice.

How the ﬁrm demonstrates the impact of collaboration with peers and stakeholders in the industry towards change objectives.

Contributions to rebuilding public trust in institutions through demonstrations of good culture.

05. How to get there

Making any policy public is the culmination of a series of internal pieces of work, so it can be helpful to think of it as a goal. The idea of complete transparency on culture topics, including those with a DEI component, may feel challenging to some firms, however it is good practice and will ensure that the policy is robust. Consider the alternative; a policy that a firm feels is not fit to be shared with stakeholders probably needs some work.

The polic(ies) that relate to DEI are where expectations are set for both the firm and for employees, along with channels for redress and access to solutions. As with any policy creation, the more transparency in how the policy has been written, the more the norms within are established and clear. The policy is not where company values should be set out, they deserve their own document. Use those values as the reference and context for how the policy has been drafted.

Making policies available to prospective staff is helpful to create a level playing field for applicants, too. Talent is increasingly discerning in choosing where to work, and the working culture is very important to their decision. Prospective staff will review publicly available information, including platforms such as Glassdoor, to form their opinion on a company. Candidates appreciate having curated information on relevant topics, and will notice if there is a lack.

And there are many stakeholder groups including prospective staff that have interest in company reporting on commitments and targets, such as Women in Finance, ethnicity pay gap reporting or other measures that are not necessarily protected characteristics - notably social mobility. It may take time for firms to deliver meaningful data on some of the commitment areas. Rather than avoid the prospect of reporting, firms can create narrative on processes, internal targets and other movement towards achieving their commitments.

Some form of annual reporting or disclosure requirement is in fact helpful for firms to establish internal channels for data collection and to elevate the issue and create awareness. Because it is likely that initial disclosures will point to a desire for progress, the reporting should also be treated as an opportunity to provide context and next steps alongside the snapshot of data.

A company’s action plan can include areas such as:

Specific milestones or progress towards targets
The establishment of groundwork in specific or multiple areas
The allocation of additional resources
Efforts to champion particular causes as advocates (internally or externally)
Specific areas of work that have emerged from employee engagement; and/or
Issues raised by external stakeholders.

04. What we expect to see, and why

Disclosure and transparency of a firm’s approach, milestones and progress is a powerful a way to normalise conversations around corporate culture and inclusion that allows for discussion and improvement.

In addition to high-level commitments that are supportive of inclusive practices, being able to summarise specific actions and outcomes to demonstrate that progress is being made can be highly motivating for employees. This is especially the case if it is tailored to respond to employees.

Examples include changes to policies that reflect changes in employee expectation or external conditions (such as flexibility in working practices), to recognising developments in areas such as more equitable recruitment practice (such as removing bias from process and setting clear guidelines for hiring panels). Full transparency on policies can be a powerful signal to current and potential staff.

Transparency on collaborations that the business is undertaking, as well as the expected outcomes and measures that will support increased public trust in institutions and industry are valuable indicators to the broader range of stakeholders. They can be deployed as accountability tools.

The initiatives that are publicly supported by the firm are an entry point for discussions on progress on topics that relate to culture. For these to be meaningful and lead to progress, the firm should be clear to employees and wider stakeholder on why it supports each initiative and how it intends to achieve targets and commitments. This should cover both the activities and the process, so the accountability mechanisms are clear.

It is important for firms to consider their public profile to understand if and how it has changed, to be able to reflect on why. Ideally, employees and other stakeholders will be able to see maturity in how the firm is covering or talking about topics, moving from simple awareness to demonstrating deeper engagement and less performative actions.