Q&A with Rita Bajaj, SH Consulting’s newest Special Advisor

Discussing the key drivers of change in financial services, the regulatory agenda, and the commercial benefits of boosting diversity in front-office roles.

By Tom Forrest, Managing Director, Sheffield Haworth

 

Rita Bajaj recently joined Sheffield Haworth as a Special Advisor, following a 30-year financial service industry career as a US/Global fund manager, controls executive, and former FCA regulator. She has recently moved into non-executive directorship and consultancy.

Rita became a hedge fund manager in New York in her early 30s. Now she is focusing on delivering improved investment outcomes on non-executive boards and is bringing her stellar experience to bear here at Sheffield Haworth, advising boards on fund governance, strategy, operational risks and resilience, ESG and regulation.

As you’ll see from this interview, Rita has a passion for the investment industry. She believes it’s one of the more meritocratic sectors, and so an ideal place for ambitious women and people of colour to succeed.

Read on to find out why she’s such a great fit for us and our clients, the current priorities for boards and executives in the financial services industry, and how firms can promote diversity and inclusion in ways that are likely to boost the bottom line.

 

Q: Can you give us a summary of your career to date?

A: To use a football analogy, I would describe my career as a game of two halves. Although now I’m actually into the third phase of my career, so I suppose cricket innings would be a better comparison.

My first “innings” was as a fund manager. I managed money, first US and global equities for blue chip UK investment houses like Royal London and Invesco Perpetual, moving on to manage global equity hedge funds in New York, which was an exciting time for a thirty-something.  

 

“When I re-joined the industry, I wanted to increase my expertise, and what better way to do that than to join the FCA?”

 

My second innings came after a career break to focus on family. When I re-joined the industry, it was after the 2008 crisis and the world had definitely changed, with regulation being a major focus for firms. I’m the kind of person who needs ‘to do’ to truly increase my expertise, and what better way to do that than to join the FCA?

During my time at the FCA, I oversaw the supervision of UK custody banks and the large asset managers – anything over £100 billion assets under management. I also managed a team that oversaw emerging horizontal thematic risks across the industry such as hard to value assets, algorithmic compliance and big data/machine learning.

In essence, I was a ‘poacher turned gamekeeper’, bringing my industry knowledge to regulatory discussions.

I re-joined industry and worked for custodian bank State Street as EMEA CAO, where I oversaw operational resilience, first line business controls, key strategic and regulatory transversal programmes and co-chaired the EMEA diversity council.

 

“If there is a common theme through my career, it has been a deep desire to support clients and investors with improved business and investment outcomes.”

 

My current innings is my portfolio career as a non-exec and advisory consultant. If there is a common theme through my career, it has been a deep desire to support clients and investors with improved business and investment outcomes.

That’s what drove me as a fund manager – managing money and delivering positive outcomes for clients. And this was magnified by my stint at the FCA, focusing on value for money and strong systems and controls environments enabling firms to not only function but deliver products that are needed and priced well.

Currently, I am an independent member on Hargreaves Lansdown’s workplace SIPP Independent Governance Committee. I’m also a non-exec with the London Pension Fund Authority. They provide  pensions for 20,000 employees, many of whom work for Greater London Council and Inner London Education Authority.

 

Q: What are the biggest priorities in UK financial services for boards right now?

There are three major focus areas for boards which have been driven by the pandemic.  The first is around strategic planning and future proofing business resilience, i.e. the viability of the firm’s operating model.

Whichever way you cut it, this involves putting the client at the centre of your business from client proposition, to making sure your products are fit for purpose, competitive, are value for money and that you have an optimal delivery mechanism, i.e. via digitalisation.

The second has been driven by the regulator. Both UK regulators’ key priority is ensuring operational resilience. New rules are due to come into force for the financial services sector by March 2022.

Minimising harm that could affect UK market’s financial stability and consumer detriment are high regulatory agenda priorities for both the PRA and FCA. Planning for, and assuming, failure are key for firms and their boards to understanding and mitigate vulnerabilities and any concentration risks in their business models.

 

“The regulatory focus on climate change and sustainability has increased significantly, not only as a financial risk perspective but also because it is what customers want.”

 

 

Third is the growing demand for ESG investment products and need to consider sustainability and investment impact. That’s client-led demand, be it understanding the impact of climate change or considering ESG. Oversight of new products, understanding a firm’s carbon footprint as well as mitigating risks in this area are at the centre of board discussions currently.

 

Q: What difficulties are boards facing when overseeing these issues?

A: One of the main challenges for boards in this area is how to effectively measure key initiative progress and evidence any improvement. Questions such as “How do we demonstrate and evidence to our stakeholders we’re meeting our targets on ESG or net Zero or supply chain resilience?” These are complex issues for boards and executive managements to unravel.

From my own experience, it is an issue that all boards are grappling with. Will we get there? I believe we will. Clarity on ESG/climate change taxonomies, comparative data, improved MI, clearer KPIs/KRIs from outsourced or third- party suppliers will all help, but it’s a long road.

This is where Sheffield Haworth, through the advisors that we have, can help clients with reporting requirements, comparative analysis, third party vendor management, resilience, and strategic due diligence.

Given the depth of Sheffield Haworth’s network, we have the ability to tap into senior experts who’ve executed and delivered frameworks, assessments, and programmes before. In the post- pandemic world, firms need to be agile, adaptable, and future proof their business and operational resilience now.

 

Q: What attracted you to becoming a special advisor at Sheffield Haworth?

A: Sheffield Haworth has an excellent reputation with its clients, from its search capabilities, leadership advisory, interim, and its consulting business.  As an advisor, specialising in board and C-suite advisory, I am here to help clients with strategic, operational, and regulatory expectations issues including support and guidance relating to their own individual accountability as SMFs.

 

“With Sheffield Haworth you have deep independent expertise. Executives like that.”

 

Sometimes you need a truly independent opinion on a strategic decision you are considering or understanding regulatory expectations in a particular area of your business. I can help with both.

 

Q: You’re an ambassador with the Diversity Project. Can you tell us why this is so important to you?

A: As a former fund manager, diversity of thought keeps an investor’s mind ‘open’ to various views when assessing investment opportunities. It keeps you honest. Constructive challenge leads to better investment outcomes.

Only 16% of FCA-approved individuals in investment management are female and that figure drops to 13% for trading firms.[1] Unfortunately, if you look behind those numbers, most senior female managers are in corporate roles, not necessarily in client facing, revenue generating front office roles. It’s 2021, that needs to change.  

Ironically, academic research has shown that women fund managers outperform their male counterparts on average by 1.1% with lower risk and volatility. It makes commercial sense to be diverse.

 

“Managing money levels the playing field; if you have talent you can excel.”

 

I am passionate about promoting fund management as a career option for all women, particularly women of colour. From my own experience, managing money levels the playing field. You are judged on your ability and talent to manage money and perform, regardless of gender or ethnicity.

It is also an incredible industry to develop your own interpersonal skills. Joining a New York hedge fund as a global equities fund manager in my early 30s was the single best learning experience of my career.

Working there – in a strong performance-based culture at the height of the first tech boom – really helped me hone my skills. I didn’t just learn how to invest better, but how to have the courage of my convictions, to articulate, debate my views, challenge constructively and not be intimidated.

A career in investing can be very exciting. It certainly was for me. We need to highlight this more.

 

Q: Any advice for executives looking to become a non-executive director?

A: Make sure you have a clear understanding of the role of a non-executive, i.e. the differences from being an executive. Focus on your lateral skills. With all your life experience and executive experience, what can you bring to board discussions?

And if you have a different perspective, share it. Boards, regulators, and good corporate governance is based on diversity of thought, healthy debate, and constructive challenge.

 

Thank you for joining me Rita. It’s been a pleasure.

If you’d like to discuss your regulatory or resilience challenges, why not get in touch? We’re happy to help

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