Financial World’s A-List Could Take Hollywood’s Cue on Inclusion

By Andrew Ross Sorkin | The New York Times | July 06, 2018
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Frances McDormand, the actress who won an Academy Award this year for her performance in “Three Billboards Outside Ebbing, Missouri,” introduced much of the world to a new idea when she accepted her Oscar.

“I have two words to leave you with tonight: inclusion rider,” she said.

Throughout Hollywood, the concept of an inclusion rider — a special clause in the contract of a lead actor or actress or prominent director that insists on a guarantee of gender and ethnic diversity among the cast and crew — has become increasingly popular since then. The Oscar winners Matt Damon, Ben Affleck and Brie Larson have said they would insist on one, as have the director and producer Ava DuVernay and others.

But what if inclusion riders took the leap from Hollywood to Wall Street?

What would happen if the biggest pension funds and university endowments — the financial industry equivalent of A-list actors — were to insist that they would invest only in private equity, venture capital or hedge funds that have certain hiring practices to address the diversity gap?

Wall Street investment funds have a long of history of being the antithesis of diverse. Only 9 percent of senior executives in private equity are women, according to the industry research firm Preqin. Fewer than 2 percent of private equity firms are run by women. About 2 percent of all funding for venture capital went to companies with all-female founding teams, and just 12 percent to teams with at least one woman.

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