The Diversity Project is partnering with Professor Alex Edmans to conduct research into link between investment performance and cognitive diversity.
The Diversity Project has selected Professor of Finance, Alex Edmans FBA FAcSS to lead its study into how cognitive diversity impacts team performance in the investment industry. Professor Edmans was selected from a wide global field of academics who submitted research proposals.
Thew study will explore whether diversity of viewpoint and experience improves the investment performance of a team and explore specific situations where cognitive diversity is beneficial or harmful. It will also look at how firms can create inclusive team dynamics to harness benefits of cognitive diversity, forming the basis of practical guidance to help firms develop strong-performing teams.
The Diversity Project has commissioned this work to re-examine the ‘business case’ for diversity, focusing on diversity of thought, saying there is very limited, if any, academic work exploring the linkage between cognitive diversity and investment performance.
The research project will incorporate a literature review of the highest-quality existing academic research, plus structured interviews with both senior and junior fund managers, to identify those aspects of team decision-making processes that lead to either strong or weak performance, and the situations which lend themselves best to cognitive diversity.
Having identified these factors, Professor Edmans and the Diversity Project will publish both a report and practical suggestions to help firms improve their approach to hiring, assembling teams and creating cultures where opinions are heard.
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