Building the Future
Institutional Investor’s Diversity, Equity, and Inclusion Roundtable in Chicago in October 2022 recognized 12 industry leaders for their commitment to, and leadership of, diversity initiatives. Here are excerpts from our recent conversation with Marlene Timberlake D’Adamo, Chief Diversity, Equity, and Inclusion Officer at the California Public Employees’ Retirement System (CalPERS).
At CalPERS, Marlene has developed a framework that aims to create equitable opportunities, improve financial performance, and carve a path for others to follow. She joined the public pension fund in 2016 as Chief Compliance Officer, before assuming the role of the fund’s first Chief Diversity, Equity, and Inclusion Officer in 2021.
After she received her J.D. degree from Temple University's James E. Beasley School of Law, she specialized in compliance at HedgeOp Compliance LLC and The Glenmede Trust Company, and in investment and risk management at PNC Bank. At CalPERS, she has nurtured an internal and external culture of inclusivity, to ensure that the work is closely aligned with the pension fund’s mission, vision, and core values.
The following remarks have been edited for clarity.
Tell us a little bit about you and your institution
We are a $460 billion pension fund, based in Sacramento, California. To put CalPERS in context, we are the largest pension plan in the world behind the country of Japan. We provide pension and health benefits to several million people – 2 million people on the pension side and about 1.5 million on the health care side – and we are the largest provider of health benefits in the country behind the federal government.
I’m responsible for implementing our diversity, equity, and inclusion framework, which we developed, beginning in 2020. Our mission is to pay benefits to our members and their beneficiaries. At the time, in the middle of 2020, we began to reconsider the question, “What can we do to make a difference?”. Marcie Frost, our CEO, and I thought long and hard about “the things that are going to help us make sure that we deliver on our promises for decades to come.”
How do you measure diversity within your investment team?
We are very clear in our definition that diversity includes all the characteristics that make people unique, so it is not only ethnicity, race, gender, sexual orientation, and disability: There are other visible and invisible differences that we talk about, including environment, background, and education. We view this work as a fiduciary duty to make sure that we are going to get the best outcomes, and we believe that DEI is one of those ways.
Through the framework, we identified the five pillars, and created associated business initiatives, and objectives to improve our DEI posture. First, we have culture: I like to say that if you don’t have a good culture, you won’t have a good company. Second, we have talent: Especially in the investment industry, it’s about people treating people right, respecting people, and engaging with them. We have investments as our third pillar, and then, we have health equity, looking at the demographics of health outcomes and understanding how improvements can be made from a member perspective. Supplier diversity is our fifth pillar: Here we want to widen the vendor pool as a means to strengthen the foundation upon which we rely for products and services.
How do you measure success of your DEI initiative?
Outside of my reporting chain, we have five work teams, which are representative of the five pillars, and we have a diversity outreach program. We do engagement surveys internally each year, in an effort to share with CalPERS staff what we’re trying to do and how we’re going to do it and communicate that we need them to provide us with this information: I really want people to be invested in what we do and to understand that they have a role. It’s great to have the data and to be accountable and very transparent. Everything is on our website, which is a great way to help people gain confidence in what can be done. I know it’s scary when you throw a report out there, and maybe it doesn’t look so good, and then you get a lot of questions.
I’m now in the process of recruiting a data specialist, who’ll make sure that we’re all speaking the same language, and help us with building metrics and benchmarks. We’re setting the expectation that we are going to use this data constructively because people want to know whether we are having the impact we expect to have and if not, why not?
What would a diverse, inclusive industry look like?
What keeps me super-engaged with DEI particularly is that there is no single thing – no individual policy or practice – that an organization can do to address diversity, equity, and inclusion. If there were one single thing an organization could do, we’d all do it, and we’d be done. That’s the reason I speak to trial and error.
In our view, DEI is not just representation, it’s also engagement and the development of opportunities. Unless you can engage people, they’re not going to stay. If they’re not happy, if they don’t feel they’ve been respected, or if they don’t feel that they have been included in decision-making, we’re just on a constant wheel of bringing folks in and out of the organization.
What is your proudest accomplishment?
With the context of the creation of the framework, we aggregate everything that’s happening across the organization and shine a light on our efforts to bring an impact to this work – whether it’s within our organization or elsewhere. We have the ability to put something out there and then see how it works, and then try it again or try something different.
At the end of the day, I feel great when team members express their gratitude for our recognition of them as humans: that they have feelings, that they are ambitious, and that they want to feel like they have a role in a larger endeavor. For us, the role is the payment of pension and health benefits to our members and their beneficiaries. This work is about people – how we treat people, how they feel respected, and ultimately how that improves our business.
For the full list of DEI Award winners, visit Allocator Intel here.
To discuss the content of this article or gain access to like content, log in or request membership here.