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IMDDA Releases Inaugural Sexual Harrasment Survey Results

Nearly 90 percent of investors do not inquire about sexual harassment during fund manager due diligence, and three quarters would still consider an investment with a fund manager who has had issues with sexual harassment in the past, according to a survey released today by the Investment Management Due Diligence Association (IMDDA).

Titled Us Too: A Due Diligence Survey and Analysis on the Current State of Sexual Harassment in the Investment Management Industry, the report spotlights how institutional fund investors need to do a better job of identifying and handling sexual harassment concerns at the investment management firms that they allocate to on behalf of their beneficiaries.

“Investors should never be blinded by great returns, which the survey shows is an ongoing industry problem,” said Andrew Borowiec, Executive Director of the IMDDA. “The failure to investigate potential sexual harassment at investment management firms indicates that an Operational Due Diligence (ODD) is incomplete, and leaves investors exposed to unchecked reputational and financial risk. We hope that this is a catalyst for change.”

Us Too defines the risks of complacency on the issue and recommends ways that professional allocators can improve ODD to discover, respond to and seek to prevent workplace harassment in its various forms – whenever and wherever it occurs.

Global Institutional Investor Respondents 

In response to the rise of the #MeToo movement, the IMDDA commissioned the anonymous survey with institutional investors in the winter of 2018. In all, 78 investors completed the survey, representing endowments, pensions, insurance companies, private banks and funds of funds. The geographic breakdown of respondents was: 68% US/Canada, 25% Europe, 7% Asia/Australia.

Survey Highlights

  • 89% of investors do not inquire about sexual harassment in the workplace.
  • 76% of investors would still consider investing with a fund manager who has had issues with sexual harassment.
  • 67% of investors limit background checks to only principals and senior staff.
  • 36% of investors are not checking social media for red flags (e.g., inappropriate pictures and comments disparaging women), indicating harassment is likely not on their radar.

The risks of ignoring sexual harassment at investment management firms can be devastating for allocators. These risks include negative media coverage, reputational damage, tough questions and actions from investment committees, protests from beneficiaries, and allegations that professionals simply did not do their job.

In response to some of the concerning findings from the survey, the IMDDA provides recommendations on how investors can improve their ODD processes, including examining HR processes, asking why departures have happened and interviewing former employees.

Click here to download the survey.