The themes of this issue of The Analyst are diversity and inclusion. In recent years, these goals have been universally espoused in the economies and societies of most developed countries. However, as a 2017 Deloitte study notes, actions taken in the name of these principles by many organizations have often delivered more in the way of optics than tangible results.

But in CFA Institute and its societies, including CFA Society Toronto, diversity and inclusion in their broadest senses have been foundations on which growth and success have been built, and not just afterthoughts born of a greater sense of political correctness.

Initiatives to improve diversity and inclusion most often target visible minorities, women, the disabled, and the aged. However, true diversity and inclusion go beyond these categories and encompass nationality, culture, and education. All of these objectives were important parts of the foundation of CFA Institute and its societies in 1990, when the Association for Investment Management and Research (AIMR)— the former name of CFA Institute—was formed from the merger of the Financial Analysts Federation (FAF) and the Institute of Chartered Financial Analysts (ICFA). Most significantly, the work of CFA Institute and its societies to achieve these objectives has shaped them all and been essential to their success ever since.

To understand why diversity and inclusion have been so important and valuable to CFA Institute and CFA Society Toronto, we first need to review, briefly, the history of our organizations.

The ICFA in its original form was founded by the FAF in 1962 as an independent, self-funding body to create and administer a program of education, examination, and certification for investment analysts and managers. Investment luminaries such as Ben Graham and A. Moyer “Abe” Kulp, as well as University of Chicago professor and business school dean Ezra Solomon, were among those who provided the impetus to its creation. The FAF that had established the ICFA was a federation of independent North American societies—some large and successful, others small and struggling. These societies provided services locally or regionally, and were somewhat political in their governance.

“Until 1984, no woman had ever become president of CFA Society of Toronto since its formation half a century earlier. But, since 1984, more than half of the society’s presidents (14 out of 27) have been women…”

The ICFA grew rapidly as an accrediting educational body in its first two decades. But when the FAF, with its diverse membership, struggled in the bear markets of the 1970s to redefine its future, suggestions of merging the two organizations into one streamlined entity began to surface. The very different nature and missions of the two organizations (the ICFA comprising CFA graduates, the FAF encompassing members and associate members drawn from all parts of the investment industry) hampered progress. But, during the recession of the late 1980s—which was particularly hard on the FAF’s finances—the two organizations agreed to merge, retaining their separate identities within an umbrella organization, the AIMR.

The merger—engineered and negotiated with the great foresight, initiative, and personal commitments of Gene Vaughan, Wallace “B.” Milner, Dan Forrestal, and Bernadette Murphy (then one of the prominent few women in the organization)—brought about a review of the role and objectives of the proposed new organization in the investment profession. Some members, mostly from the ICFA, were in favour of keeping the organization narrowly focused on CFA graduates, and practising investment managers and analysts, in the U.S. and Canada. (It was even proposed by some members to exclude sell- side analysts!) However, the respective boards of the ICFA and FAF—under the guidance of the aforementioned individuals and others—decided to merge into the AIMR, and to take on the principles of diversity and inclusion in its mission. Gene Vaughan, chair of the newly formed AIMR board of governors (on which this writer also had the pleasure and honour of serving), argued strongly that a policy of diversity and inclusion was the best way of building a large, professionally trained, and ethical investment industry, and of creating the dominant global association of investment professionals. Diversity and inclusion in every sense of the words were judged to be not only worthy goals in themselves but also in the best interests of the newly formed organization and the investment profession.

The formation of AIMR occurred around the same time as the passage of the 1991 Civil Rights Act in the U.S.—which modified the Civil Rights Act of 1964, outlawing discrimination based on race, colour, sex, religion, or national origin—and the Americans with Disabilities Act of 1990. AIMR took the initiative of appointing a full-time general counsel to ensure compliance with these new laws, as well as all other relevant laws and regulation.

Of course, for an organization to pursue diversity and inclusion without selectivity can be counterproductive. If all prospective members don’t share the same ethical principles, professional standards, and commitments to diversity and inclusion, the foundations of an organization are at risk of being undermined. For CFA Institute and its societies, the rigorous CFA Program, the CFA Code of Ethics and Standards of Practice, and the monitoring of members’ professional conduct have been effective safeguards, ensuring that members experience only the advantages and not the disadvantages of diversity and inclusion.

To implement this policy, leading practitioner-volunteers (traditionally the driving force within the organization, particularly in its early years) were actively sought and recruited from a wide range of job functions associated with investment decision-making process analysts, fund managers, investment bankers, and traders— and from a range of countries, cultures, age groups, and sexes. Every committee within AIMR sought diversity to ensure the views and opinions of the widest range of members were adequately represented. This action had the effect of encouraging overseas associations of investment professionals to seek to join or merge with AIMR, rather than operate in competition with it; in this way, organizations and individuals in Singapore, Switzerland, Hong Kong, the U.K., and other parts of the world became part of the international diversity and growth of AIMR.

As a member of many committees and boards in the 1980s and 1990s (the ICFA Candidate Curriculum Committee, Council of Examiners, Standards of Practice Committee, and the ICFA Research Foundation, as well as the ICFA, FAF, AIMR, and CFA Society Toronto boards), I can attest that both our understanding of global investment and our contribution to the globalization of investment were greatly enhanced by our policy of diversity and inclusion. People from a wide range of countries and cultures had the opportunity to contribute and to learn best practices and the highest standards of ethics from one another, and to form professional relationships across borders. That approach prevails more than ever today and can be seen in the breadth of people who serve in CFA Institute and the societies, including CFA Society Toronto. Had the AIMR board of governors not espoused diversity and inclusion in 1990, I’m sure the investment profession today would be highly fragmented and, as a result, professional standards would be lower generally and less universal.

Since 1990, the number of CFAs and members of CFA Institute have grown more than tenfold, and the CFA designation has become the gold standard among investment professionals world-wide. Today, more than half of CFA Institute’s membership is outside North America and close to 20 per cent of the members are women.

The roles of inclusion and diversity in CFA Society Toronto have been no less significant. Since the early 1990s, the society has grown to more than 10,000 from about 1,500 members. And the program has evolved, from 12 to 15 hosted events a year—mostly geared to equity investors and analysts and often consisting of corporate presentations by CEOs (the era of quarterly conference calls didn’t arrive for another decade)—to almost 80, aimed at investment professionals of all kinds and covering emerging issues and topics, and/or specifically designed to enhance member/practitioner skills.

Among the ranks of investment professionals prior to the early 1980s, the presence of women was more the exception than the norm. Until 1997, no woman had ever been elected chair of AIMR. But, since then, 20 per cent (four out of 20) have been women, and the board of governors—comprised entirely of members from North America in 1990—is now 47 per cent (seven out of 15) from overseas (including Europe, China, India, and Australia), and 33 per cent (five out of 15) are women.

Until 1984, no woman had ever become president of CFA Society Toronto since its formation half a century earlier. But, since 1984, more than half of the society’s presidents (14 out of 27) have been women (including current president, Pamela Steers). And today, 50 per cent of our board members, 40 per cent of our committee chairs, and 21 per cent of our members are women, as is our CEO, Sue Lemon.

Toronto is the third largest CFA Society in the world, ranking after New York and the U.K. (the latter being a nation-wide society), yet it has only the eighth largest stock market in the world. Toronto and the Canadian investment profession have always punched above their weight in CFA Institute representation, a fact that many have observed is likely due to a strong orientation toward regarding the provision of investment advice as a profession, not merely a business.

The economically thriving City of Toronto has recently joined the ranks of multicultural, multinational large cities of the world, with more than half of its population now comprising visible minorities, according to Canada’s 2016 Census. This quality is appropriately reflected in the composition of CFA Society Toronto. Members of our society can take pride in the fact that the diversity and inclusion of both the society and its home city complement each other and give compelling testimony to the merits of policies that adopt these qualities as their objectives.