Contributed by Mina Pacheco Nazemi, Managing Director, Alternative Investments at Barings
I can do more.
I am deeply angered and frustrated by the events of the past week. But is it enough to protest, or hurl insults at incompetent leaders? I can do more.
Who is responsible for the income disparity that has left working-class families with a material decline in aggregate wealth over the last 30 years – from 40% to 20%? This is a product of how we allocate funds, how we manage our businesses, and the value we place on the dignity of work.
As stewards of capital we have an outsized role in determining which businesses to support. And while we might not like to admit it, we have enabled businesses to be run in such a manner that these dispersions have become more amplified. I can do more.
Businesses that disproportionately compensate senior ranks should not be tolerated.
Businesses that don’t have good relations with employees and local communities should not be tolerated.
Businesses run by a homogeneous group of individuals should not be tolerated.
Businesses which lack diversity at the board level should not be tolerated.
As asset allocators, we need to hold ourselves accountable. We need to hold our investment managers accountable and hold their respective portfolio companies accountable. The focus on ESG is a good start in fulfilling our responsibility to ensure both sustainability and societal impact. But justice doesn’t just happen, it requires action, dedication and accountability. Inquire, dig deep into the dynamics, question the status quo, take a stand and don’t be apologetic. Those of us who do we will not only make a difference, but we will make investments in businesses that financially outperform. Investing with this mindset is our fiduciary duty.
In this time of suffering, don’t be fooled by the hollow platitudes of “corporate social responsibility.” Talk is cheap. Be a leader. Engage. Challenge. Act.
I can do more. Will you join me?