MINUTES

Meeting of the Diversity Committee

of the Board of Trustees of the State Universities Retirement System

Friday, March 12, 2021, 9:00 a.m. State Universities Retirement System

Via remote access only due to COVID-19 statewide restrictions

The meeting of the Diversity Committee of the Board of Trustees of the State Universities Retirement System convened on Mar. 12, 2021, at 9:00 a.m. via zoom (video conference) based on the Executive Order that temporarily amended the Open Meetings Act to allow public meetings to be conducted via phone or video conference. The following trustees were present: Trustee Jamie-Clare Flaherty, chair; Trustee Aaron Ammons; Trustee John Atkinson; Trustee Richard Figueroa; Trustee John Lyons; Trustee Fred Giertz; Trustee Scott Hendrie; Trustee Steven Rock; Trustee Collin Van Meter; Trustee Antonio Vasquez; and Trustee Mitchell Vogel. Others present: Suzanne Mayer, Interim Executive Director and Interim Secretary; Ms. Tara Myers, Chief Financial Officer; Ms. Bianca Green, General Counsel; Mr. Doug Wesley, Chief Investment Officer (CIO); Ms. Ellen Hung, Deputy CIO; Mr. Joe Duncan and Mr. Shane Willoughby, Sr. Investment Officers; Mr. Alex Ramos and Mr. Brian DeLoriea, Investment Officers; Ms. Kelly Valle and Mr. Akshay Patel, Investment Analysts; Ms. Tracy Bennett, Compliance Analyst; Ms. Heather Kimmons, Associate General Counsel; Mr. Albert Lee, Associate General Counsel; Ms. Anna Dempsey, Investment Counsel; Mr. Jefferey Saiger, Chief Technology Officer; Ms. Jackie Hohn, Chief Internal Auditor; Ms. Brenda Dunn, Chief Human Resources Officer; Ms. Kristen Houch, Director of Legislative and Stakeholder Relations; Ms. Kelly Carson, Ms. Chelsea McCarty and Ms. Annette Ackerman, Executive Assistants; Mr. Michael Calabrese of Foley; Ms. Linda Brookhart of SUAA, Ms. Rena Henderson Mason and Ms. Emma Tamplin of BoldAgenda. Diversity Committee roll call was taken: Trustee Ammons, present; Trustee Atkinson, present; Trustee Figueroa, absent; Trustee Flaherty, present; Trustee Lyons, present. Trustee Figueroa joined the meeting at 9:09 a.m.

APPROVAL OF MINUTES

Trustee Flaherty presented the minutes from the Diversity Committee meeting of January 28, 2021.

Trustee Ammons made the following motion:

• That the minutes from the January 28, 2021 Diversity Committee meeting be approved as presented.

Trustee Lyons seconded and was followed by a roll call vote.

Trustee Ammons - aye Trustee Atkinson - aye Trustee Figueroa - absent Trustee Flaherty - aye Trustee Lyons - aye

CHAIRPERSON’S REPORT

Trustee Flaherty reported that the search for the Chief Diversity officer has come to a temporary pause due to the current internal administrative transition. Trustee Flaherty stated that diversity training sessions will continue at the board level.

DIVERSITY EDUCATION SESSION

Ms. Henderson presented educational training regarding cultural competency tools. The educational session lasted for one hour and fifty-six minutes and concluded at 11:05 a.m. at the end of the presentation. A copy of the presentation titled “Cultural Competency Tools Workshop” is incorporated as part of these minutes as Exhibit 1 as well as a 2021 Diversity and Inclusion article titled “Investors Want Transparency on Diversity” by Amanda White as Exhibit 2.

PUBLIC COMMENT There were no public comments presented to the Diversity Committee. There was no further business brought before the committee and Trustee Atkinson moved that the meeting be adjourned. The motion was seconded by Trustee Figueroa and carried with all trustees present voting in favor.

Respectfully submitted,

Ms. Suzanne M. Mayer

Interim Secretary, Board of Trustees SMM:cm

Cultural Competency Tools

March 12, 2021

Exhibit 1

Agenda

Finding Your Optimal Service Value₣

Becoming An Effective Leader

• The Case for Equity, Diversity and Inclusion

• Your Story

• Structural Racism

• Unconscious Bias

• Next Steps and Recap

Exhibit 1

Workshop 1 Making the Case

for Equity, Diversity and

Inclusion

Workshop 2Cultural Competency

Tools (Part 1) -Structural Racism and

Unconscious Bias

Assessment Equity, Diversity

and Inclusion

Workshop 3 Cultural

Competency Tools (Part 2) - Privilege

and Power Analysis

Workshop 4 Board Action

Planning

Board Equity, Diversity And Inclusion Project

AwarenessAnalysis

ActionAccountability /Allyship

We are here

January 2021 Winter/Spring 2021 Summer/Fall 2021

Exhibit 1

EDI Work Is A Major Change Initiative

Organizational Commitment

Establish plan and ongoing measurement & improvement

for EDI work

Culture & Readiness

Composition & Diversity

Alignment & Accountability

Establish common language and begin personal reflection

Introduce framework & make case for EDI

Contextualize organization, stakeholder demographics, and

opportunities for impact

Category Objectives

EDI Initiative is publicly shared, properly resourced, and fully

integrated throughout organization.

Clear priorities, expectations, and metrics for the EDI initiative. Goals

are aligned with strategy and budget. Processes are in place to

evaluate progress.

EDI commitment & context define the board’s diversity and inclusion goals,

which reflect and support the diversity needed to appropriately represent the

members, organization, and sector.

The board is prepared to undertake the work needed to undergo

organizational change centered around equity, diversity and inclusion.

Exhibit 1

Group Agreements - Creating a Brave SpaceMove Up/Move Back● Be mindful of your “air time” - allow space for others to contribute● Raise your hand - either on camera or in Zoom participant icon ● Let everyone complete thoughts

Respect for New or Difficult Ideas● No judgment about responses● Listen to understand● Assume positive intent; assume responsibility for impact ● Ask questions any time

Enter the Brave Zone● Speak your truth ● Encourage team members to stretch themselves● Embrace ambiguity● We are all co-learners● Have grace with yourself and others

Exhibit 1

Embrace the Brave Zone

Comfort Zone Danger Zone

Brave Zone

Exhibit 1

7

Results - For better decision-making -to drive performance and impact

Market - For new ideas, thinking, and creativity - to remain competitive

● Results is the central argument - we can’t centralize anything other than returns

● Needs to be viewed within paramount duty to guarantee returns and needs to fit within this criteria

● Data shows diversity and inclusion is fully consistent with this.

● Data shows diversifying is very important ● Investment team could be more diverse ● Staff and leadership champions are ready,

but need to be equipped

Making the Case

How/where can diversity and inclusion improve decision making and increase performance?

How/where can diversity and inclusion improve decision making and increase innovation?

Exhibit 1

8

Moral - For your mission, because of the membership you serve or to expand your

reach

Economic - For spreading wealth more equitably, strengthening the tax base for

funding public higher education

● Data shows economic benefit brought in by retirees. If the pension fund is healthier, the state will be better

● Health and wealth directly tied to diversity and redistribution of the wealth created.

● White gatekeeping: SURS et al are white led and white operated, money has stayed in those circles/groups.

● BIPOC should have access to same pool of money and opportunity

● Need for results is a given, but also need to think about creating opportunity.

Making the Case

Why don’t we and others invest in programs to build with good money (ie housing, hungry, etc)?

What are the ways you can invest that will really help your members in terms of longevity and numbers associated with employment?

Exhibit 1

Quick Assessment Results

❑ Strategic❑ Leadership❑ Culture❑ Structure and Processes❑ Implementation❑ Resources❑ All of the above

Our organization’s challenges with diversity and inclusion are:

Exhibit 1

10

Structural Racism

Exhibit 1

11

Your Story

● When was the first time that you learned and/or experienced the impacts of wealth inequality?

● How have you seen wealth inequality linked to race?

Exhibit 1

12

RacismRacism is as an example of how oppression works to produce and reproduce inequality on a structural level. Here are three definitions:

● Racism is a system in which one race maintains supremacy over another race through a set of attitudes, behaviors, social structures, and institutional power.

● Racism is a marriage of racist policies and racist ideas that produces and normalizes racial inequities.

● A person of any race can have prejudices about people of other races, but only members of the dominant social group can exhibit racism because racism is prejudice plus the institutional power to enforce it.

Structural RacismAn array of dynamics

that systematically disadvantage people of

color and includes history, culture, and

institutions.

Exhibit 1

Structural Racism

INSTITUTIONAL RACISM

ORGANIZATIONALRACISM

INTERPERSONALRACISM

Lack of diversity in investment consulting

The Demand Problem - Only 8 firms [of 16] have written policies

to interview women or ethnic minorities.

Proprietary Databases don’t seem to help find diverse managers.

Many investment consulting firmsDon’t Track incoming inquiries

from asset managers, diverse or otherwise.

[from: DAMI Investment Consultant Survey, 2020]

“Firms owned by women and minorities manage just 1.3 percent of

assets in the $69 trillion asset management industry, though their

performance is not statistically different from the industry as a whole

…

In fact, it found that funds managed by diverse-owned firms were overrepresented in the top-

performing quartile”

[2019 updated report]

Implicit Biases among decision-makers

While the sector is reacting to the disparity and making changes for greater diversity, “there are still many people

and organisations throughout the investment chain who are unconvinced

and believe a focus on diversity compromises financial performance”

[ Executive Summary from: Report: Diversity from an Investor’s Perspective (New Financial)]

An array of dynamics that systematically disadvantage people of color and includes history, culture,

and institutions

Exhibit 1

Structural Racism INSTITUTIONAL

RACISM

ORGANIZATIONALRACISM

INTERPERSONALRACISM

Structural RacismAn array of dynamics

that systematically disadvantage people of

color and includes history, culture, and

institutions.

https://www.youtube.com/watch?v=9zxn2QV1cJw

Exhibit 1

Structural Racism in Asset Management INSTITUTIONAL

RACISM

ORGANIZATIONALRACISM

INTERPERSONALRACISM

Structural RacismFiduciary duty states that the best managers should be selected as a reflection of the best interests of the asset owners they serve... Reasons this is happening:

● failure to hire the best firms despite better performance

● the lack of diversity in investment consulting

● implicit racial bias among decision-makers

Source: Diversifying Investments, 2017 (updated 2019) [slides here]

Exhibit 1

Racism – Four Types TypesINDIVIDUAL – LEVEL RACISM

INTERNALIZED RACISM lies within individuals. These are our private beliefs and biases about race and racism including:• Racial prejudice towards other people of different race• Internalized oppression – negative beliefs about

oneself by people of color• Internalized privilege – beliefs about superiority or

entitlement by white people

INTERPERSONAL RACISM occurs between individual. These are biases that occur when individuals interact with others and their private racial beliefs affect their public interactions such as:• Racial slurs• Bigotry• Hate crimes• Racial violence

SYSTEMIC – LEVEL RACISM

INSTITUTIONAL RACISM occurs within institutions and systems of power. It is the unfair policies and discriminatory practices of particular institutions that routinely produce racially inequitable outcomes for people of color and advantages for white people. An example includes:

• A school system that concentrates people of color in the most overcrowded, low-performing, under-resourced schools, resulting in higher dropout and disciplinary rates compared with that of white students.

STRUCTURAL RACISM is racial bias among institutions and across society. It involves the cumulative and compounding effects of any array of societal factors including the history culture, ideology and interactions of institutions and policies that systematically privilege white people and disadvantage people of color. An example is:• An overwhelming number of depictions of people of

color as criminals in mainstream media, which can influence how various institutions and individuals treat people of color with suspicion when they are going about their daily lives, resulting in discriminatory treatment and unequal outcomes.

Source: Four Types of Racism, Oppression Monitor Daily, January 31, 2014

Exhibit 1

17

Unconscious Bias

Exhibit 1

● Prejudice or unsupported judgments in favor of or against one thing, person, or group as compared to another, in a way that is usually considered unfair

● Occurs automatically based on past experiences and background

● May be reflected in institutional arrangements and reinforced by their outcomes

● Implicit biases are:○ Pervasive – everyone has them○ May not necessarily align with our stated beliefs○ Malleable – they can be unlearned

Unconscious or Implicit Bias

Exhibit 1

19

Unconscious Bias Impact ● Which asset managers/vendors should we use? How

do we we hire them?● How do we recruit, evaluate and retain our staff?● Who is in the room and how do we make decisions?● How do we work together?● How do we relate and serve our members?

Exhibit 1

20

Unconscious Bias - Examples

Affinity Bias

The tendency to warm up to people like ourselves. We favor those who have something in common with us.

An prospective employee shares the same alma mater, work experience and/or interests as those who are making the hiring decision so they prefer this person over someone who has nothing in common with them.

Halo Bias

The tendency to think everything about a person is good because our first impression of them was good.

An asset manager was highlighted on a major financial news show so the investment team invites them to present over other asset managers with less visibility.

Perception BiasThe tendency to form stereotypes and assumptions about certain groups ... difficult to make an objective judgment about individual members of those groups.

Perception that people who are older are less willing to change so the technology team decides not to include an older manager on a major change initiative team.

How to Counter: Instead of “culture fit” look for “culture add”

Use standardized criteria and process to evaluate the talent pool

How to Counter:

Review and rank all the data, especially around investment performance

Eliminate the one glowing attribute

How to Counter: Ask, is my perception based upon fact?Understand what unique skills and experiences people may bring to a team

Exhibit 1

21

Unconscious Bias-Examples

Confirmation Bias

Seeking out evidence that confirms our initial perceptions, ignoring contrary information. It's a little like a debate.

Only asking questions or seeking information about an investment manager that confirms that they are a leader in their asset class.

GroupthinkThe bandwagon effect, or groupthink, occurs when individuals try too hard to fit into a group, by agreeing with the majority, or by stifling opinions that may differ from the group.

Several senior executives prefer a particular benefits vendor so a few of the recently hired staff don’t speak up about their concerns in order to avoid conflict with their boss.

How to Counter: Ask standardized, skills-based questions that provide each prospective firm with a fair chance to stand out.

How to Counter: Have someone provide the counter viewpoint in any evaluation process. Person with most authority shares views last.

Exhibit 1

22

Unconscious Bias Exercise

● List the ten people you trust the most outside of your immediate family

● Who are they?● What would you say about your circle of trust?

More broadly ask yourself:• Who do you trust? • Who do you fear? • Who do you accept without question? • Who do you scrutinize carefully?• How many authentic relationships do you have with people

who are different than you?

Exhibit 1

23

Unconscious Bias & Structural Racism● In addition to advertently and inadvertently

perpetuating stereotypes, unconscious biases play an important role in perpetuating structural oppression. Biases reproduce power structures by

○ Failing to promote/enable equity for those who do not look like people already in power

○ Reaffirming (and hiding behind) Dominant Ideology

○ Justifying inequalities without acknowledging power & privilege

● Consider the impact of unconscious bias in structural racism by asking:

○ Who’s biases are making decisions? What biases have history and influence?

○ For example, consider in light of decision making demographic in asset management.. →

○ Apply to Board specifically: Who is encouraged and supported for Board member candidacy?

Exhibit 1

24

● Biases can be conscious and they can be hateful, but often biases are unconscious and take the form of covert interactions.

● Unconscious biases root themselves in taken-for-granted assumptions that often go uncontested in social settings, especially when they are held and enforced by decision-makers.

● Though they are stubborn because rooted in culture and often people are not aware of them, biases can be unlearned by continuously acknowledging power and privilege.

Unconscious Bias - How it Relates to Structural Oppression and Inequality

Exhibit 1

Next Steps

• Assessment • Cultural Competency Workshop II• Action Planning Workshop• Personal Work

• Reflection • Learning• Observation – Self and Others

25

Exhibit 1

EDI Work...

Organizational Commitment

Establish plan and ongoing measurement & improvement

for EDI work

Workshop 1 Making the Case for Equity, Diversity and

Inclusion

Workshop 2 & 3Cultural Competency

Tools - Structural Inequality, Privilege &

Power

Assessment of Equity, Diversity & Inclusion

Workshop 4 Action Planning

Culture & Readiness

Composition & Diversity

Alignment & Accountability

Establish common language and begin personal reflection

Introduce framework & make case for EDI

Contextualize organization, stakeholder demographics, and

opportunities for impact

Category Objectives

Exhibit 1

What Does It Take?

Transactional• Returns• Ad hoc

Transformational• Mission• Culture• Training• Budget

Accountable• Leadership• Strategy• Outcomes• Evaluation• Investment

Source: “How To Get From Transactional To Accountable On Diversity, Equity, And Inclusion”, Kristina Gawrgy Campbell, Equity In The Center, ProInspire

Exhibit 1

• Mission-Driven, Strategic• Strong Leadership• Major Change Initiative• Impact• Journey

Summary

Exhibit 1

Rena Henderson Masonrhmason@boldagenda.net312-961-6060www.boldagenda.net

Follow me on:www.linkedin/in/renahendersonmasonwww.twitter.com/boldagendawww.facebook.com/boldagenda

29

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