Welcome to Northern Trust · 2019. 9. 27. · Source: “Market Trends/CFO Implications”, Spencer Stuart; “2019 Top 50 CEO Demographics,” Atlantic Business Magazine. 7% OF FORTUNE

northerntrust.com | © 2019 Northern Trust Corporation

Welcome to Northern Trust September 10, 2019

PRESENTED BY:

Jason Tyler Chief Financial Officer Northern Trust – Wealth Management


You are meeting in a historic building, known for foundational strength

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…but, exciting things happen here frequently

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However, diversity is still an issue…

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…in Corporate America…

Source: “Market Trends/CFO Implications”, Spencer Stuart; “2019 Top 50 CEO Demographics,” Atlantic Business Magazine.

7% OF FORTUNE 500 CEO’S ARE WOMEN

1% OF FORTUNE 500 CEO’S ARE BLACK

13% OF FORTUNE 500 CFO’S ARE WOMEN

6% OF FORTUNE 500 CFO’S ARE PEOPLE OF COLOR

26% OF FORTUNE 500 BOARD SEATS ARE HELD BY WOMEN

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…in Non-Profits…

* For US Nonprofits with an annual budget of more than $50 million

75% OF THE NONPROFIT WORKFORCE IS FEMALE, BUT…

18% OF US NONPROFITS* CEO’S ARE WOMEN

20% OF US NONPROFITS EXECUTIVES ARE PEOPLE OF COLOR

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…and in Asset Management.

Note: Portfolio Management Demographics includes both Private and Mutual Funds.

Source: Diversifying Investments, A Study of Ownership Diversity in the Asset Management Industry, Executive Report, May 2017; Knight Foundation/Bella Research Group Whiteout: The Staggering Sameness of Asset Managers, Chief Investment Officer Management, September 2014.

$47 Trillion

$564 Billion

Total AUM for women & minority-owned firms Total AUM

AUM IN MUTUAL FUNDS

Men: 81.7%

Women: 18.3%

White: 89.7% Asian: 6.3%

Hispanic: 2.3% Black: 1.1%

PORTFOLIO MANAGEMENT DEMOGRAPHICS

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The situation is not improving.

Source: Diversifying Investments, A Study of Ownership Diversity in the Asset Management Industry, Executive Report, January 2019; Knight Foundation/Bella Research Group

Diverse, smaller firms struggle to scale, while fewer new firms are forming.

0.0

10.0

20.0

30.0

40.0

50.0

2011 2012 2013 2014 2015 2016 2017

% O

F A

LL F

UN

DS

Women-Owned (>25%) Minority-Owned (>25%)

5.2% 3.9%

5.3% 4.0%

DIVERSE-OWNED FIRMS: MUTUAL FUNDS

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This is a difficult journey, but there are examples of success, even when winning is the only thing that matters

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The English Premier League had the courage to abandon historical images of success to find talent

1992/93 Season 2018/19 Season

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Northern has taken a similar view on diversity.

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Engage 360 Framework

CORPORATE SPENDING

COMMUNITY ENGAGEMENT

EMPLOYEE COMPOSITION

OWNERSHIP

DIVERSITY IMPACT ASSESMENT SCORECARD

SummaryCategory Weight Weighted Score Score

40% 24.2 0OWNERSHIP 30% 12.0 4

15% 15.0 7SUPPLIER DIVERSITY 15% 6.0 10

57.2

Category

Total Raw

ScoreWeighted

Score Category WeightWeighted

Score

Minority Classification Firm Engagement Criteria Met (Y/N) 12%% Score % Score % Score

Employee Base 5% Corporate Community Outreach Y0 0%-19% 0%-9% 0%-4% 04 20%-29% 4 10%-19% 5%-9% 4 Time Y7 30%-44% 20%-29% 7 10%-19% 7 Paid Days Y10 45%-69% 30%-69% 20%-69% Company Organized Volunteering Y7 ≥70% ≥70% ≥70%

Employee Base Total 4 7 0 11 2.2 Money YLeadership Team 15% Yearly Corporate Donations Y

0 0%-14% 0%-4% 0%-4% 04 15%-24% 5%-14% 4 5%-9% 47 25%-39% 15%-24% 10%-14% Match Y10 40%-69% 10 25%-69% 15%-69% 107 ≥70% ≥70% ≥70%

Leadership Team Total 10 4 0 14 8.4 Employee Engagement Total 10 12.0Investment Team 20% Leadership Engagement 3%

0 0%-14% 0%-4% 0%-4% 0 % of Leadersship Team with Board Positions4 15%-24% 5%-14% 5%-9% 0 0%-4%7 25%-39% 7 15%-24% 10%-14% 7 4 5%-24%10 40%-69% 25%-69% 10 15%-69% 10 7 25%-49%7 ≥70% ≥70% ≥70% 10 ≥50% 10

Investment Team Total 7 10 0 17 13.6 Leadership Engagement Total 10 3.0Analyst Adjustment (-1,+1) Analyst Adjustment (-1,+1)

24.2 Community Engagement Total 15.0

% Score% Score % Score % Score 3%

Ownership 30% 10 Yes/No 0.00 0%-19% 0 0%-9% 0%-4% 0 6%4 20%-29% 10%-19% 5%-9% 0 <1% 0 0.07 30%-44% 20%-29% 10%-19% 4 1%-4%10 ≥45% ≥30% 10 ≥20% 10 7 5%-9%Ownership Total 0 10 0 12.0 10 ≥10%

Professional Services Diversity Total 0 0.0Brokerage Diversity Program 6%

0 <1% 0 0.04 1%-4%7 5%-9%10 ≥10% 10 6.0

Brokerage Diversity Total 10 6.0Analyst Adjustment (-1,+1) Analyst Adjustment (-1,+1)Ownership Total 12.0 Supplier Diversity Total 6.0Ethnic Minority includes Black, Latino, Asian, and Native American. Other includes Veterans, Disabled persons.

Is there a supplier diversity program in place?

Scor

e Professional Services Supplier Diversity Program

Employee Diversity TotalOWNERSHIP (30% Weight) SUPPLIER DIVERSITY (15% Weight)

Female Ethnic Minority Other

Scor

e

Model RepresentationTOTAL WEIGHTED SCORE

Raw Score Raw ScoreEMPLOYEE DIVERSITY (40% Weight) COMMUNITY ENGAGEMENT (15% Weight)

Female Ethnic Minority Other

Scor

eSc

ore

Scoring KeyEMPLOYEE DIVERSITY Marginal Representation

Minimal RepresentationCOMMUNITY ENGAGEMENT Good Representation

Example: Diversity Impact Assessment Scorecard

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We have taken significant steps to ensure increased diversity, but we are not done

Gender Equality Index (Bloomberg 2019)

America’s BEST Employers for Diversity (Forbes 2017)

100 Best Adoption-Friendly Workplaces (Dave Thomas

Foundation, 2017)

Top 50 Companies for Latinas to Work

(Latina Style Magazine, 2017)

Allocation to Women and Minority Owned Brokerage

Firms

Top 50 Company for Executive Women

(7th Consecutive Year, NAFE)

Signatory, UK Women in Finance Charter

Best Places to Work for LGBT Equality

(Corporate Equality Index, 8th Consecutive Year)

Diversity Champion (Investment News 2019)

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Organizations here have foundational strength Like Batman, we must heed the call to do more

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The Northern Trust Company – Member FDIC – Equal Housing Lender

Documents

Welcome to Northern Trust · 2019. 9. 27. · Source: “Market Trends/CFO Implications”, Spencer Stuart; “2019 Top 50 CEO Demographics,” Atlantic Business Magazine. 7% OF FORTUNE