Voted among the world’s 100 most influential people by Time magazine last year, Mellody Hobson is flying into Hong Kong this month to address AsianInvestor’s Diversity in Asset Management forum.*
Hobson is president of Chicago-based Ariel Investments and has been at the firm for 25 years. By her own admission she has only had one job.
The company, which was founded in 1983 and has $10 billion under management, offers six no-load mutual funds for individual investors and defined-contribution plans, as well as separately managed accounts for institutions and high-net-worth individuals. It also has offices in New York and Sydney.
Hobson has become a recognised voice in America on financial literacy and investor education, and is a regular contributor and analyst on finance and economic trends for CBS News.
She is also a spokesperson for the Ariel/Hewitt Study: 401(k) Plans in Living Colour and the Ariel Black Investor Survey, both of which examine investing patterns among minorities.
Hobson will offer her perspective on the importance of diversity in company boardrooms when she is interviewed on stage by AsianInvestor editor Leigh Powell. The event (see agenda) has evolved from AsianInvestor’s 25 Most Influential Women in Asset Management and accompanying forum (see May 2014 magazine issue).
According to data on diversity sourced by Ariel Investments, nearly 90% of asset managers in the US are white and about 75% are men (see accompanying data in AsianInvestor’s newsletter today).
“You want diversity of opinion and background when you are trying to solve problems,” Hobson told AsianInvestor in advance of the event, which will take place at the Mandarin Oriental Hotel in Hong Kong from 2pm on March 18.*
“In equity investing, we are trying to solve really difficult problems by finding the right companies. If you have a group of people who broadly think the same, you will end up with a broad outcome.”
Hobson says she starts to worry when everyone is in agreement. She is a fan of dissenting voices, believing they force you to re-evaluate your core opinion. She cites US Republican leadership contender Donald Trump, saying she values his opinions because they are so different from hers that they help to strengthen her own convictions.
In her forthcoming fireside chat with AsianInvestor, Hobson will consider what should determine diversity: company culture or hiring culture. “Culture is not something that should be mandated from the top,” she notes. “It has to be part of the DNA of an organisation.”
She will also discuss the importance of mentorship and training as well as government support for equal opportunities in education.
“The sad truth is, we have not seen enough in the way of true breakthroughs in the asset management industry in America,” notes Hobson. “We have seen examples of success, but not cultural change.”
The US banking industry has seen more progress in diversity, says Hobson, although that partly stems from the Community Reinvestment Act of 1977, initially introduced to reduce discriminatory credit practices against low-income neighbourhoods.
She has been trying to understand the impact of the European Commission’s move to attain a 40% objective of women in non-executive board-member positions in listed companies.
“There is no appetite for this in the US because our society rejects something being imposed like that,” she observes, noting people running a business should automatically have its best interests at heart, rather than have this imposed by a quota system.