As Industry Regulators Try To Catch Up, Diverse Investors Are Already Making Moves

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It’s been known for a while now that the heads of industries are predominantly white and male. With such a lack of diversity among C-level executives, lots of questions are being asked about how well placed our industries are to cater to the majority of consumers. 

There is also the question of progress as a society, especially with recent events revolving around BLM and other civil rights movements. To that end, the CFA Institute, a global nonprofit organization that provides investment education, released a diversity draft code of conduct to address the most pressing issues. 

In this article, we will cover what the CFA’s new draft code means in regard to overall steps towards diversity, the inroads that have been made in the venture capital community, and the biggest hurdles yet to be overcome.


Steps for progress

The CFA’s draft code of conduct covers six different areas in which it believes improvement can be seen and was built as a collaboration between a variety of institutes and working leaders.

After all, any potential signatories to this voluntary code are driven by the fact that 57 percent of Gen Z invest by the age of 25, compared to only 14 percent of the millennials before them. This is an important statistic, considering how conscious Gen Z is of moral and ethical ramifications when it comes to how they spend their money. 

In fact, given previous experiences with millennials, the corporate world can’t afford to lose out on Gen Z, so it makes sense that this sort of push for progress is happening.

Of course, that doesn’t mean only organizations like the CFA can fight for progress and better representation. Minority-owned businesses can help by closing wage gaps, which itself is going to be great for rebuilding the economy. Certainly, these types of businesses borne out of a larger overall plan for diversity are going to play a big part in the economies of the future.

One of the particularly interesting things about the CFA is that it is led by a female president and CEO, Margaret Franklin, who said in a news release:

“As the first female president and CEO of CFA Institute, I may be evidence of the progress the investment industry is making on gender diversity, but I am also profoundly disappointed by its inability to grapple with the broader issues of diversity, equity, and inclusion.”

With Crunchbase, users can highlight data about U.S. companies with diverse leadership and the investors who fund them.


In fact, she is not the only woman pushing for more diversity in the finance industry. Elizabeth Davis, an investor at Anthemis, is also supporting women in finance, and she has quite a pedigree behind her, starting out at The Coca-Cola Co. Her journey from there to working with venture capital and finally, Anthemis is what drives her to provide better financial skills to other woman investors, especially when it comes to the best investment opportunities.

What’s quite encouraging is that women in the investment and business sphere have created their own world of Femtech or products that are targeted toward women, and it’s quite sizable. For example, women’s health is projected to reach $1.19 trillion by 2027, and the overall femtech landscape is currently worth just over $1 trillion. 


The seeds of change

But women are not the only ones starting to push toward better inclusion and representation. Venture capital is another sector in which inroads have been made toward diversity, with several VC firms opening opportunities for diverse investors. Part of that push is increasing transparency in VC, something the new code of conduct made by the CFA is hoping to address.

What’s interesting is that it’s a very good time for diverse VC investors to get into the market, especially if they are socially conscious. The reason is that many Black-owned businesses still struggle for investment, even after the BLM protests brought better representation to the forefront. For those new investors, it will be enticing to invest in their own communities, such as these businesses that are struggling; ergo it is a perfect time for regulators to push for more diversity and representation in the financial sector.


Hurdles to overcome

By making business leaders directly responsible for diversity and tying it to bonuses and salaries, the hope is these steps will motivate said leaders to take action to increase representation. This can certainly be a difficult pill to swallow though, especially as this is an unprecedented step in the industry and may be quite hard to implement.

Another hurdle is that the BOE, FCA and the PRA, and as part of the CFA’s code of conduct, have stressed the need for data disclosure and transparency so that industry professionals can watch the progress. Of course, any sort of data disclosure may run afoul of international policies and, for example, will have to ensure compliance with the GDPR.

Nonetheless, even with these blocks and issues to overcome, the outlook remains generally good in places like the U.K., at least in terms of gender diversity. That being said, there does seem to be a decline in ethnic minorities at leadership levels. This is compounded by a lack of “Black Pipeline” for senior management in some of the biggest FTSE firms. Incredibly, only 1 out of 10 management roles is held by an ethnic minority, which puts the industry in a poor light.

There is similarly an issue when it comes to socioeconomic backgrounds, with those from higher ones accounting for the overwhelming majority of senior roles. This lack of social mobility is certainly a problem, especially since, due to a lack of systemic support, a lot of ethnic minorities have to contend with lower socioeconomic backgrounds as well. 



Overall, the recent steps by the CFA are targeted toward fixing a very specific problem: The lack of quality in the decision-making process due to a shortfall in diversity and representation. Thankfully, the wide support of the CFA’s code of conduct is a good first step toward realizing a sector leadership that is more representative and is able to make smarter decisions because of it. 

By similarly including industry veterans and leaders, the hope is that influence and pressure can be placed not only on firms but policymakers as well. We’ll just have to wait and see how successful these steps are going to turn out to be.

Nahla Davies, Technical Writer, Enterprise/SaaS Expert headshot

Nahla Davies is from Brooklyn, New York. Since 2015, she has worked with enterprise clients around the world developing RegTech protocols and best practices. She shares her insights at

  • Originally published October 8, 2021, updated April 26, 2023