The Private Equity Wire article, "Diversity pays to make the world go around," quoted Russell Reynolds Associates Consultant
Georgia Rankin on why diversity and inclusion should be top of the priority list for private equity firms. The article is excerpted below.
Diversity and inclusion, a topic that has been at the top of HR agendas for some time should, according to investors, be moving to the top of all GP’s to-do list.
Georgia Rankin, head of the European private equity practice at recruiter Russell Reynolds Associates, has seen the demands from investors impacting how private equity firms are building their teams.
“LPs such as pension funds are increasingly scrutinising their GPs’ diversity,” she says. “They are asking these questions in fundraising rounds, and looking at the diversity in portfolio companies, too.”
For privately held companies, the same holds true, with investors pushing to increase the span of directors’ skills. With a typically closer relationship between investor and board, the issue can be pressed even more urgently – but can only be represented authentically if the team doing the pressing practices what it preaches.
“It is important to have a team or company that is representative of society,” says Rankin. “Looking at consumer products, customers are 50% female. Investors need to understand their needs and desires and that is best achieved through representation, especially when they take a seat on the board to try and transform the company.”
Rankin is part of the Level 20 initiative, which promotes women within private equity. It has received buy in from some of the world’s largest firms and there is a clear trajectory for those undertaking and getting on board with the programme, according to Rankin.
Already, at a junior level, one in four investment professionals are women, she says. The hope is to retain these women to senior level, but that is also the challenge.
Rankin has seen the industry waking up and embracing the potential of D&I.
“They do still want the best people on their teams, but their thinking is evolving around what ‘best’ means and what someone brings to the party,” she says. “The complexity of acquiring and understanding target companies’ needs may require a new toolkit.”