Mellody Hobson, in her mid-twenties and a newcomer to the world of investment, walked into a vast office in Texas with two senior male colleagues for a meeting. At one end of the room was their host's desk, with two extra chairs. At the other, fully 30 feet away, was a separate area with a sofa.
"Fellas, why don't you sit here at my desk?" she recalls the host saying. "And miss, you can take the couch. 'None of us is sitting down,' I said." And they all moved to the couch and held the meeting there, the 48-year-old president of Ariel Investments recounted on a recent visit to Hong Kong.
The story sums up the attitudes that prevailed in the industry and Hobson's response reveals the grit that propelled her from intern to president at 31 of Ariel, the Chicago-based mutual fund company that manages assets worth about $12 billion. Hobson was named one of Money Management Executive's Top Women in Asset Management in 2015.
Her early experiences led her to become an advocate for increasing the number of women and minorities in boardrooms. Hobson, who sits on the boards of Estee Lauder Companies and Starbucks and served as chair of DreamWorks Animation, is discouraged at recent trends in the U.S., where white supremacists have gained publicity, pay inequality remains trenchant and a Google engineer circulated the view that women are biologically less suited to his field.
"On my worst day I always tell myself I'm not in a field picking cotton," she said. "Progress isn't always a straight line," Hobson added, referring to a quote from Barack Obama, who has close ties to Ariel founder and Hobson mentor John Rogers. "Some of the rhetoric that has surfaced in the U.S. is dangerous and bad, it's a setback for our society." Hobson says she finds such trends "incredibly troubling."
COMMITMENT TO DIVERSITY
A report by Credit Suisse released at the end of last year found that companies with more females in decision-making positions generate stronger returns and better profits.
Despite the evidence, women remain grossly under-represented in the executive ranks. Females make up about 25% of U.S. and European boards on average, and that's even lower at C-suite levels, according to Bloomberg Intelligence. A study by LeanIn.org and McKinsey found females lag behind men on the career ladder from the very start.
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"Diverse perspectives lead to a better outcome," Hobson said in an interview at Bloomberg's office on Sept. 1. "There's so much data, when you look at the math, in terms of the investor returns and the shareholder value that gets created from more diverse boards. You'd say, well, why wouldn't you do that?"
For its part, Ariel Investments shares Hobson's commitment to diversity: 51% of its staff are women, while 27% are African-American, 13% are Asian and more than 7% are Hispanic. Two-thirds of the leadership team is female. In contrast, a 2015 report on the Chicago financial services industry compiled by Mercer found that African-Americans made up only 12% of employees.
Ariel's approach gives it a competitive advantage when recruiting new talent, said Hobson, the first African-American woman to head the prestigious Economic Club of Chicago. The fact that the fund-management firm has a minority woman as its president encourages young women and members of minorities to apply for jobs.
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"I can't tell you how many resumes we get from business schools across the country from black women and black men and Hispanic women, men, etcetera, who say I'm interested in working for your company because they can see someone at the top who looks like them," said Hobson, a strong advocate of financial literacy and a member of the board of an educational foundation set up by her husband, Star Wars creator George Lucas.
SPREADING THE MESSAGE
In 2015, Hobson was named as one of the world's 100 most influential people by Time magazine. Vanity Fair quoted Sheryl Sandberg, chief operating officer of Facebook, as crediting Hobson with inspiring her to write her bestselling book about women in the workplace, "Lean In."
Ariel takes its message to the companies it invests in. "We say we want to see diversity," said Hobson. "We say we want to make sure you reflect the society we all live in because we think that increases your chances of success."
Specialist indexes provide some support for this view. Both an index of U.S. companies with at least 25% female directors and a Japan gender-diversity index have outperformed equity benchmarks.
Ariel doesn't go in "with our fists in the air talking about race," but instead agitates and looks for improvement and progress, and would invest in a company with no record of diversity and press for change, Hobson said. "If you exclude a group of people from the boardroom or the leadership ranks of a company, the company is not as good as it could be.
