Launch Prof Alex Edmans study – how to give investment teams the edge

We’re excited to share our new research launched in The Sunday Times yesterday, and with an event at the House of Lords on Wednesday.

In 2024, the Diversity Project invited academics from around the world to submit research proposals to explore any linkage between cognitive diversity and investment team performance. We stressed that we wanted to know what the evidence showed, not work backwards from any conclusion we might hope to see.

After reviewing submissions from a wide range of academics we commissioned Alex Edmans, Professor of Finance, from London Business School and author of several books including May Contain Lies and Grow the Pie, to conduct this important research.

“We defined cognitive diversity as the range of expertise, experience, perspectives, preferences, traits and ways of thinking within a team. It can arise from differences in educational background, professional background, life background, cognitive style or personality and demographics.”

The research reaches three main findings:
-Cognitive diversity can create clear competitive advantages for investment teams.
-Cognitive Diversity also comes with challenges.
-Sophisticated leadership is essential to harness the benefits and minimise the costs from diverse thinking.

This study resets and moves the discussion on over the ‘business case’ and the benefits of creating diverse and inclusive meritocracies in investment firms. Cognitive diversity is not something that leads to better results by itself: it needs to be carefully managed to realise the benefits. The present ‘anti-DEI’ threat is an opportunity to reset and reinforce shared values and goals and ensure that inclusive leadership and management of talent is embedded in businesses as a strategic issue.

Although we have a robust marketing and press strategy in place, we would still greatly appreciate if you could help us amplify this research within your own organisation and across the industry. If you have any questions, get in touch via info@diversityproject.com