- I think the more
individuals we get committing
to an oath of integrity
and competing with honor,
speaking up when
things are wrong,
then I think the
strength in the industry
and its spine can
only get stronger,
and hopefully the trust
factor in the industry
will also rise.
(upbeat music)
- Hello, I'm Magalie
Laguerre-Wilkinson.
Welcome to Ethics in
Business: In Their Own Words.
ACCA, the Association of
Chartered Certified Accountants
has teamed up with
Carnegie Council
and CFA Institute to produce
this interview series,
launched in 2018 for
Global Ethics Day.
The series features
global business leaders
exploring how
businesses are preparing
for an ethical future in
the face of challenges
presented by globalization,
technology, and
human psychology.
Today we are talking
to Emilio Gonzalez,
Group CEO and Managing
Director of Pendal Group.
Headquartered in
Sydney, Australia,
Pendal is an independent,
global investment
management business
focused on delivering
superior investment returns
for clients through
active management.
Pendal was originally
established in 1969
under the name BT
Australia Limited
and became one of
the most successful
funds management
businesses in Australia.
It rebranded to Pendal in 2018
and has expanded globally,
through its wholly
owned subsidiary,
J. O. Hambro Capital Management
and offices in London,
Singapore, New York, and Boston.
Tell me what role does your
company play in the community?
- We like to participate
as often as we can.
We play a number of roles.
I'm really pleased
to say that the staff
is very engaged
in raising money,
fundraising around the world.
Whether it be our London
office, our U.S. office,
or our Sydney office,
we have community
committees that run
functions and we raise funds
for cancer, cystic fibrosis.
One charity we're very
proud to be part of,
a charity that's
close to our heart,
which is money for
premature babies.
We had a previous staff
member who unfortunately
passed away, but he had twins
when he was becoming a
dad for the first time,
and he was very lucky
that the hospital
he was at had the
right equipment.
But we discovered that
not every hospital
had that equipment, and
so the business over
the last few years has been
raising money to ensure
that every hospital
has the right equipment
when premature babies are born.
In addition to
that, we help people
who aren't as
privileged as ourselves
in the industry.
In our London office
we invite children
from schools in a less-well
economic area and allow them
to come in, and we
share with them what
we do, what a typical
day in the office is,
and encourage them
in terms of getting
into investment
management as well.
- How does your company
work to create diversity
in the industry it serves?
- A very good question.
Unfortunately, our
industry has a very poor
record of diversity,
particularly at the front line.
Not so much in the back
office or client service
or marketing, but
in the frontline
where there's the
day-to-day management
of our clients' funds,
it's very dominated by male
and not a lot of
female participation.
One of the activities
and initiatives
that we have introduced recently
is an internship program
particularly targeted at females
in their last year
at university.
So we've gone out
and started a program
to bring in females to work
with our investment teams,
to get them to better
understand what we do,
how it's done, and give them
an introduction and a
leg-up into the world
of funds management.
Out of that program
we've actually been able
to hire females into
our investment teams,
and that's one way of doing it.
There's a number
of other activities
and work that we do.
We've been a founding
member of a program run
by Mercer's around future
impact which they put in place
to try and educate the workforce
on the female side
about how to get
into the industry,
what's required,
what's the process to ensuring
that there's a career there
for females and males.
We've been part of that
important initiative.
We're also part of
Women in Finance.
There are a number
of initiatives
and membership that
we participate to try
and increase the diversity of
participation in what we do.
- In the context of Australia,
because this is where we are,
how does your company
work to support
minorities who are already
in the workplace?
You were talking about the
presence in the back office
and in other sectors.
How do you bring
them to the front?
- On the diversity front
between male and female
there's a number of programs;
I mentioned our
internship programs.
But also, in terms of
supporting the staff
generally, we do have a very
flexible working environment.
We do allow staff to work
part-time if it works for them
and it works for us.
We allow them to
adjust their hours.
I think we have very
generous maternity leave
and paternity leave.
All of that we certainly
have policies in place.
One thing we did
introduce some time ago
now is what we call
contribution leave,
and that is additional
leave on top
of your annual leave that
you can use for anything
beyond what you would
normally use for annual leave.
There was a period there
where we were getting
requests from people who
had religious holidays
when it wasn't a public
holiday and other reasons
to take time off or the day
off for personal reasons,
and we felt that that wouldn't
be part of your annual leave.
We'll preserve that and
allow them to take up
to five days in additional
contribution leave
for areas that they choose,
and that may be well
be for religious reasons
or for other reasons.
- That's separate
from everything else,
so that's an additional
perk of being part
of this organization.
- Yes.
What we've found with
contribution leave
is that people will ask
and request for either
religious reasons or
for personal reasons,
and we didn't wanna
differentiate one group
versus another
group, so we said,
in addition to
your annual leave,
you can have contribution leave,
and you can decide
what you use that for.
One other reason we did
that is we had staff
that were volunteering in terms
of state emergency service.
We've got a lot of
volunteers who do work
for a lot of charities,
and who do you choose
whether they have
a day off or not?
Again, contribution leave
is there to assist them
to be able to use it and not eat
into their annual leave.
- It plays a role.
Now I wanna shift a little bit
to technology and advancements.
How does your company
help management,
employees, and providers
adapt to technological change?
- Very good question.
We're in the process at
the moment of thinking
about how technology
impacts what we do,
and I think asset management
is very poor at it,
mainly because what we sow
is investment performance.
People don't come to us because
of our great technology,
although I think
that is changing
in terms of our ability
to service our clients
and deliver information
in a much more effective
way using technology.
One of the things
that we are thinking
about is how do we better
improve our experience
with clients and use technology
in our processes, and that's
also a change in mindset.
There are a couple of
things we've identified
to help people on that journey.
A lot of it has got
to do with education,
and we've brought in
leaders in the industry
in firms that technology
is the core foundation
of what they do, and
they're at the edge of it.
We've had people from Facebook,
we've had people from
Google come in and talk
to us about their
work environment
and how they use technology.
For them, that's not a threat,
it's an opportunity.
Getting people educated
in terms of how to use
it in a way that it's
your friend as opposed
to your foe is an important
part of that journey.
We also tap into external people
in the think tank world
to come in and talk to us
about what's happening
out there in terms
of the way the market's
changing and in terms
of the way businesses
are changing
and how technology is changing.
It's an education
process which we run,
and it's a process that
we know we've got a long
journey ahead of us to adapt
to a world of new technology
and how to use that,
and to a large
extent it is scary
because we don't know
what we're heading into,
but we need to bring our
people on that journey as well.
- The main ingredient
of advanced technology,
these days anyway is AI.
That's what everyone talks
about, and many people
feel threatened by it
and others embrace it.
How is AI embraced or
accepted at Pendal?
- I think it's early days yet,
and one of the areas of AI,
well it's probably two
areas AI can be used
in an efficient way is
better use of looking at data
and analyzing that
data very, very quickly
that the human capability
is unable to do so and
come up with responses
around that, and also how
can AI help you be more
efficient in processes
that you do very
manually on an ongoing basis?
I think there's still a
long way to go in terms
of our understanding of it,
and it's fair to say
that asset managers
and fund managers are
quite cynical or wary
about the latest trend
and the latest thing.
We've been through many cycles.
I remember the internet boom,
where there was a
lot of new technology
that was going to
solve a lot of problems
for a lot of people, and so
I think our adoption of AI
will happen gradually, but
we need to be convinced
that it adds value
to what we do,
but I also see its
application in a lot
of the processes we
do on a manual basis
that are quite repetitive
that we can certainly do
a better job.
- You talked about the cynicism.
How do you manage that?
- I think it's healthy.
I think for those of us who
are in investment management,
cynicism is an
important ingredient
of a good money manager.
You learn that
through experience.
You learn to question
and challenge and have
an open mind and do
away with biases,
and part of that
technique is questioning
the obvious,
questioning the theory,
questioning the statement,
and looking for
different angles.
I think healthy cynicism
is an important ingredient
of ensuring that we're making
the right decisions
for our clients.
- Again, in the same
neighborhood of what
we're talking about, how
is your company helping
with retraining all of
your employees who need
to adjust to an increasingly
automated world?
- It comes back to I
think understanding
the journey we're going on.
It's no different
to the development
of the internet or the
development of any technology
that will change the way
businesses will work.
You need to embrace
it, and you need
to understand, well,
what's my role in that?
One of the things we
need to do is if there
is an opportunity for
people's jobs to change,
how can we train them
up into a new process
or a new world where
technology becomes
an increasing part
of what they do?
Whether it be AI or whether it
be new pieces, it's not new.
This is the way business
has evolved for many,
many years, that new
technology comes.
Remember the days, I
remember the pre-Excel days,
pre-Lotus 1-2-3?
Everything was done manually,
and then this new technology
piece comes through,
and all of a sudden
all these people
who are great at manual
maths are not as valuable
because you can do
it on a spreadsheet.
What you need to do
there is educate them
in terms of rebuilding
their skill set
and using what they do
to a whole new skill set.
So it's important to embrace it,
and educate and train
people up as the world
embraces different
ways of doing things.
- What is the greatest
ethical challenge facing
your company and your
industry in general?
- I think trust.
I don't think that will
come as a surprise.
We're in a business where we
manage other people's money,
and the number one thing
you need to have is trust.
That's being challenged,
particularly coming out
of the financial
crisis 10-12 years ago,
and in the Australian
market even more so now
given the recent
Royal Commission over
banking and finance.
The big challenge we, as
an industry as a whole,
is ensuring that we
can gain the trust
of our clients, the
trust of our customers.
We're entrusted with
managing their wealth
and managing their money.
It's not always
apparent that that trust
is there, so we need to put
programs in place or act
in a way that we put
our clients first
and that will take time.
Over time hopefully
we can be seen
as a profession that
can be trusted not only
as a business that is focused
on making money
for shareholders.
- How do you enforce that trust?
Is it as simple as
taking your clients out
to lunch once a month?
Sorry to sound so simple.
How do you do that?
How do you build the trust?
- It comes down to the culture,
and it comes down
from the leadership.
Trust, you see it every
day in what you do.
It's not a bunch of words
on a piece of paper.
It has to start from
the very, very top.
The meetings that you attend,
the decisions that you make,
the words that you use,
you need to demonstrate
integrity,
transparency, honesty,
be upfront with your clients.
Every piece of communication,
every piece of activity,
every piece of work
that you do comes back
down to are we ensuring
that the decisions we're
making and the direction
the business is taking
is putting our clients
first, and secondly,
is it enforcing
our confidence in the trust
that people have in us
to manage their money?
- You're on the
board of the BFO.
Explain a little bit, the
role, tell us about the BFO.
- The Banking and
Finance Oath was a child
that was developed out of the
2008-2009 financial crisis,
and it was put together
by industry leaders who
felt that trust needed
to be recreated in the industry,
and at the forefront
of that was individuals
making an oath in terms
of their commitment
to behave in an
honorable way, integrity,
compete with honor, and
also support individuals
who maybe see things
that are corrupting
organizations and
speak up about them.
In 2008 I was in
investment management,
and it was a tough period.
I could see that
markets were very much
in freefall, and things were
starting to come out in terms
of companies and
financial institutions
that could have done
a better job in terms of
managing people's money.
The Banking and Finance
Oath I think goes a long way
to creating individual
responsibility.
There's a lot of
codes of conduct,
there's a lot of industry codes,
there's a lot of company codes.
But to a large extent,
they are ones you have
to take to participate
in the industry.
The difference with the
Banking and Finance Oath
is that it's a
commitment to yourself.
You can regulate markets
as much as you want,
you can put in industry
codes as much as you want,
but at the end of the day
it's the individual behavior
and activities that people
take at the front line
that matters the most.
We've had over 3000 signatures,
and more recently we've
started a campaign
that the more who sign,
the greater the spine
and the stronger the spine.
I think if more and
more individuals make
a commitment to
themselves about competing
with honor, as well as
speaking up when things
are wrong, then the
industry as a whole
will be strengthened
by that, and hence,
that strength of spine there.
Even with the Banking
and Finance Oath
with its limited resources
and early stage of its life,
I'm encouraged by the uptake
and the encouragement
that people are willing
to sign in a voluntary
manner to hold up
a certain standard.
- So the more you sign,
the stronger the spine.
- That's correct, yes.
- That's a great saying.
- It's true as well,
and I think the more
individuals we get
committing to an oath
of integrity and
competing with honor,
speaking up when
things are wrong,
then I think the
strength in the industry
and its spine can
only get stronger,
and hopefully the trust
factor in the industry
will also rise.
(upbeat music)
