CFA Institute releases final diversity code for Canada, U.S.

The CFA Institute has released its final diversity, equity and inclusion code for the investment profession in Canada and the U.S. following a consultation last year that attracted more than 100 comment letters.

The code requires signatories to commit to:

• expanding the diverse talent pipeline;
• designing, implementing, and maintaining inclusive and equitable hiring and onboarding practices;
• designing, implementing and maintaining inclusive and equitable promotion and retention practices to reduce barriers to progress;
• using their position and voice to promote diversity, equity and inclusion (DEI) and to improve DEI outcomes in the investment industry;
• using their role, position and voice to promote and increase measurable DEI results in the investment industry; and
• measuring and reporting on our progress in driving better DEI results within their firm.

In Canada, the code requires committing to implementing the Truth and Reconciliation Commission of Canada’s Call to Action 92.

“Over successive generations, the investment industry has lacked the knowledge, experience, and, frankly, motivation to build DEI into the framework and culture of organizations. That is now changing,” said Sarah Maynard, global head of external diversity, equity & inclusion, CFA Institute, in a statement. “Increasingly, responsibility for DEI is moving to business owners with DEI goals embedded in long-term business strategy.”

Compared to the draft code from 2021, the final code expands the list of diverse groups to include religion, mental well-being and intersectionality (when a person falls into two or more diverse groups).

The final version also explicitly notes that equity is not defined the same way as equality. “Equity offers those who need it targeted support to reach their full potential,” the code states.

Signatories must report their progress annually to the CFA Institute, and the institute will report on industry-level statistics.

Within two years of signing the code, organizations must adopt a DEI policy and statement, establish an oversight governance process and create an implementation plan to integrate DEI.

DEI is an increasing area of focus among regulators in North America. The Canadian Securities Administrators consulted on diversity issues last year. In September 2021, securities regulators in Nova Scotia and New Brunswick published a joint paper seeking feedback on diversity and corporate governance issues. Later that month, the North American Securities Administrators Association (NASAA) adopted a new policy on diversity, equity and inclusion at its annual meeting.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.