How D&I Can Drive ROI: A Q&A With Amundi’s Allen Xiao

At today's top financial firms, diversity and inclusion (D&I) is far from just an exercise in reputational risk management. Indeed, firms that have adopted the most progressive approaches are seeing bottom-line improvements, including better profits and enhanced return on investment (ROI).

According to a new McKinsey & Company study on diversity, equity and inclusion (DEI), companies in the top quartile for being ethnically and culturally diverse are 36% more profitable than those in the bottom quartile, while companies with executive levels comprised of over 30% women are 48% more likely to outperform companies with less gender diversity.

In other words, in addition to being a hallmark of strong company culture, D&I is a driving force for growth, revenue, long-term agility and risk-adjusted return.

At a recent GARP New York chapter meeting that explored the benefits of a diverse risk team, Allen Xiao, deputy chief risk officer at Amundi U.S., said D&I has “come a long way” in financial services. “It’s not just about race and gender. It’s also about disability, age and differing perspectives,” he said.

Debbie Ng, the chief risk officer for Citigroup Global Markets and a fellow panel member, said firms that encourage D&I gain greater access to different points of view, making them better equipped to navigate bias. “Until you’re faced with a situation, you never know when your unconscious bias will come out,” she explained. “Luckily, risk managers have a unique perspective because they can’t look at things in silos. It’s important to be curious, ask a ton of questions and speak up.”

Allen Xiao, deputy CRO, Amundi U.S.

Risk Intelligence recently spoke with Xiao about the benefits of having a diverse risk management team, the cultural advantages of D&I development and the skills that can enable D&I professionals to climb the corporate risk ladder.

Risk Intelligence (RI): How important is D&I to an effective risk team?

Allen Xiao (AX): D&I improves both a team’s mindset and skill set. Risk management requires comprehensive knowledge and skills in order to capture emerging risks. Managing risk is like portfolio management in that producing sustainable outcomes requires effective diversification across the universe of investment instruments and people. 

The diversified thoughts created by D&I minimize intellectual blind spots. In terms of culture, the openness fostered by D&I creates transparency and respect, which is also essential for an effective risk management framework.

RI: Are there any D&I challenges specific to the risk profession?

I don’t feel there are challenges specific to risk regarding D&I. There needs to be constant reminders and awareness training to prevent unconscious bias in any field — risk management included.

RI: What are the tangible differences between diversity and inclusion, and how are both areas integral to a modern workplace?

AX: Inclusion is focused more on actions. We can only fully utilize the diverse talent pool if everyone feels equally included.

At Amundi, we have recognized D&I at all levels and integrated it into our hiring and management process; its integration is a delicate balancing act between the tone at the top, the mood in the middle and activities at the bottom.

Everyone needs to be motivated to contribute and hold each other accountable.

RI: What's the first step a company should take if they're looking to improve their D&I practices?

AX: The first step is for the company to review its corporate culture. There needs to be an open culture to acknowledge issues and embrace changes if needed. But it doesn’t just start at the top. Everyone in the company has a role to play to improve D&I. 

We encourage all employees to share their perspectives and embrace their uniqueness in the workplace, regardless of if they are diverse professionals. Everyone can learn from each other.

RI: What's your advice for diverse risk professionals looking to advance their careers?

AX: Embrace your diversity but also listen to others, especially those who are non-diverse professionals. Hearing their unique perspectives may prove invaluable as you look to build your career.