What is The ACT Standard and how does it work?
The ACT Framework
What is The ACT Standard and how does it work?
The ACT Standard of corporate culture for investment companies captures the essence of an investment management company’s ‘heart and soul’ and provides professional investors with a framework to assess, measure and be a catalyst for change.
The ACT Framework is a disclosure that enables a firm to articulate, assess and demonstrate how its external and internal cultural values on diversity, equity and inclusion align.
The changing regulatory landscape brings increasing demands on firms to disclose their vision, culture and approach to inclusion.
Companies need to be doing more, and clients have increasing expectations for better evidence about the whole firm, not just the product.
The ACT Framework provides a Standardised, Structured, Strategic and Stakeholder-driven approach that focuses on the business and on client delivery.
Our understanding of culture and its importance within firms has evolved. Culture is both the firm and the people. This includes the environment that enables employees to flourish and understand the philosophy of the business.
The regulatory view that good culture helps prevent misconduct and supports consumer protection and well-functioning markets still holds. But it’s no longer individually focused and rooted in compliance, and has expanded to the whole firm - in the wake of a few well-placed scandals.
Good work
Building strong, open and flexible cultures allows diversity of thought and representation that will enable better investment analysis, better investment decisions and improve client outcomes. Good investment practice needs the right environment to make good decisions, from initial horizon scanning, innovation, analysis, risk assessment, confidence and judgement.
Good leadership
Environments that are closed to new ideas, perspectives and contributions are not best placed to meet emerging challenges and opportunities; environments that lack the best leadership and the best support risk failing to deliver their best work for clients.
Good people
People that understand the company values and how the company values them can focus on doing a good job, are more likely to be loyal, work better in teams and be advocates for the company externally and internally. This helps to create a positive reinforcement cycle that strengthens the business.
So why ask about diversity, equity & inclusion?
Diversity is one element of successful culture and is an outcome of enabling an environment where there is space for everyone and for the business to thrive.
Equity ensures everyone gets what they need to do thrive - which are not necessarily the same things.
Inclusion encompasses how people feel about the culture and how they see their participation.
