2020 diversity annual report - mfs

2020 Diversity Annual Report

Responsibly Active For a Century Since launching the first US

open-end mutual fund in 1924,

MFS® has been committed to a

single purpose: to create value

responsibly for clients.

Our sustainable investing

approach aims to uncover

what we believe are the best

investment opportunities in

the market through

■ Collective expertise

■ Long-term discipline

■ Risk management

Diversity and inclusion (D&I) are foundational to the work we do as active managers.

“Through our more diverse workforce, we can see risk and opportunities from many angles, which drives our ability to outperform long term.”Alison O'Neill, Investment Officer and Co-CIO Equity – Americas

1MFS 2020 Diversity Annual Report

Reporting With Purpose MFS has always viewed culture as critical to an organization’s long-term success and sustainability. As investors, we want to see evidence of a strong culture in the companies we own or consider owning. As an investment manager, we want to show evidence of our own strong culture to those we serve because we believe this helps them understand how we invest responsibly and create value on their behalf. This report is our way of honoring that commitment.

Clearly, there is no single way to measure culture and there are many ways to demonstrate a strong culture. We believe that by sharing our diversity and inclusion strategy – what we hope to accomplish and how we’re doing it – along with key metrics that illustrate our progress, we can offer transparency on how we sustain our inclusive culture.

Our Strategy for Diversity and Inclusion: Present and Future FocusDiversity and inclusion (D&I) are foundational to the work we do as active managers, essential to our sustainability and critical to our ability to honor our sole purpose: to create value responsibly for clients. We’ve built our D&I strategy based on these beliefs and our commitment to making our firm, the industry and the world a more inclusive place.

Our strategy focuses on three key aspects of diversity & inclusion

■ Talent – Build a diverse workforce and leadership pipeline

■ Culture – Sustain and enhance an inclusive workplace

■ Community – Drive D&I in our communities and industry

OUR D&I STRATEGY AIMS TO EMPOWER EVERYONE AT MFS TO HELP US BECOME A MORE DIVERSE, INCLUSIVE AND SUSTAINABLE COMPANY.

2 MFS 2020 Diversity Annual Report

Talent – Build a Diverse Workforce and Leadership Pipeline

“We believe that building a diverse workforce and fostering an environment of respectful challenge gets the best from our most powerful resource — our people.”Mike Roberge CEO, MFS Investment Management

We believe the best talent is diverse talent.

Bringing together employees with different

perspectives, experiences and backgrounds

limits individual bias and helps us vet ideas

from many angles so we can make better

decisions – for our clients, the firm and each

other. Building and sustaining a diverse

workforce drives the way we recruit talent,

shape our hiring practices and cultivate our

leadership.

Recruiting and developing diverse talent

At MFS our recruitment efforts are a two-way

street. We gain access to new talent and give

them additional exposure to the field of

investment management. We build that access

in both directions by partnering with

organizations such as Posse, the Partnership,

Inc. and Bottom Line.

Working with these organizations, MFS

participates in a variety of activities and

sponsorships, including but not limited to:

■ Helping to assess diverse students and job

candidates

■ Sponsoring fundraisers, leadership

development programs and events focused

on race and social justice topics

■ Hosting student interns and sourcing diverse

talent

■ Sponsoring job boards to recruit racially

diverse talent

The Posse Foundation operates on a model rooted in the belief that a small, diverse group of talented students—a Posse—carefully selected and trained, can serve as a catalyst for individual and community development. MFS General Counsel Heidi Hardin has served on the Posse Boston Board since 2018.

The Partnership, Inc. works with

organizations in all sectors to build racially and

ethnically diverse leadership pipelines, and

offers professional development programs for

multicultural talent to further enhance and

develop their skills at all stages of their careers.

Bottom Line addresses the low college

graduation rates of first-generation students

from low-income backgrounds. This

organization was founded on the belief that

students need a mentor and a guide during the

college application process and throughout

college to succeed. By providing consistent

one-on-one support, Bottom Line has helped

thousands of students stay in college and

complete their degrees.

In addition, the recruiting we do on our own

can be quite powerful. We have expanded our

recruiting at schools through college career

fairs, which gives students an opportunity to

learn more about our inclusive culture at MFS.

We have also developed on-campus

partnerships with educational staff to build

student awareness of opportunities at MFS and

allow us to engage with them.

■ % Female (Global) ■ % Minority (US only)

MFS Internship Program Diversity

0

10

20

30

40

50

60

202020192018

31.0%

24.1%22.2%

48.1%

37.9%

6.9%

Campus recruitment

The illustration above shows our progress in

diversifying our internship program. Among

the more noteworthy changes is the increase in

minority hires from 6.9% to 24.1% between

2018 and 2020. By expanding our hiring

sources, we were able to broaden our

candidate pool and ultimately hire a more

diverse cohort of interns.

MFS’ diversity efforts are focused on campus

recruiting and most specifically at the MBA

level. MFS partners with several diverse talent

sources to provide exposure, mentoring,

career education and opportunities, as well as

financial support to women and minorities

interested in careers in financial services. We

also partner with universities across the globe,

and with their women and minority student

associations, to provide educational and career

opportunities through campus presentations

and workshops.

Enhance hiring practices and leadership

development to increase diversity – We are

constantly examining and improving upon the

ways we approach hiring diverse talent. We

have implemented competency-based

interview skills training for our hiring managers

to make sure they are giving all candidates

equal consideration. We have also created

entry-level exposure programs to give new

hires broad access to the professional

opportunities available within the firm so they

can find their best fit:

Rotational Development Program (RDP) –

Helps hardworking and highly motivated new

graduates from diverse backgrounds gain

exposure to and become fully immersed in the

investment management industry.

Legal Fellowship – is for candidates who have

recently completed their Juris Doctorate

studies and have demonstrated commitment

to promoting diversity and inclusion or have

overcome obstacles, financial or otherwise,

while pursuing a legal career.

Comprehensive Mentoring Program –

Pairs high-potential employees with leaders

from our global offices who offer them advice

and support to help advance their careers. We

also leverage external leadership development

programs for underrepresented employees to

develop and retain our diverse talent.

3

MFS 2020 Diversity Annual Report

The illustration to the left reflects our

minority and female hires in 2020. We

recognize that we still have work to do,

but we're confident that through our

external partnerships and campus

recruiting we will continue gaining

access to and hiring more diverse

talent in the years ahead. For the total

number of hires we made in 2020,

please see the chart on page 8.

Cultivating diverse leadership

In addition to bringing new diverse

talent into our workforce, we prioritize

developing our employees. Whether

we’re holding internal career fairs to

expose our talent to more

opportunities within the firm, or

developing diverse talent to increase

representation in our leadership ranks,

we’re building our diverse workforce

from within MFS just as much as we're

recruiting outside the firm. For

example, as the illustration shows, 22%

of our female employees are managers,

which is close to the 24% of our male

employees who are managers.

The chart to the left shows that 15% of

our US minority employees are

managers. Among our global offices,

we have lower minority representation

in the US at the mid- and senior

management levels. In fact, 52% of our

US minority employees are at the mid-

and senior level, as compared to 67%

of nonminority employees. Here too,

we are focused not only on recruiting

and hiring diverse talent at all levels of

the organization but also on

developing and promoting our own

diverse talent.

2020 Hires - % Diverse

43PERCENT

Female (Global) Minority (US only)

34PERCENT

Global Manager Diversity - Gender

22PERCENT

Female Male

24PERCENT

US Manager Diversity - Race/Ethnicity

15PERCENT

Minority Nonminority

27PERCENT

4

Female representation across the pipeline

BoardC-SuiteSVPVP

Senior Manager/DirectorManager

Entry Level

*Data are from US and Canada only

N/A

62 PER

CEN

T38 P

ERC

ENT

53PERCENT

54PERCENT

78PERCENT 71

PERCENT

79PERCENT 67

PERCENT

47PERCENT

46PERCENT

22PERCENT 29

PERCENT

21PERCENT 33

PERCENT

MFS 2019 EOY 47% 46% 22% 29% 21% 33% N/A

2019 Asset Management (exc. PE) 42% 42% 32% 26% 20% 20% 31%

2019 All Companies 47% 38% 33% 29% 28% 21% 26%

■ Women ■ Men

Percent of women and men employees within each level

OVERALL

YOUR COMPANY

2019 EOY data prior to COVID-19

A powerful advocate for womenMFS is a leader among our peers in supporting women. They are well represented

across the organization and senior management, and our female employee populations

are above industry averages. As part of our effort to support women and improve their

representation in the workforce, MFS participates in McKinsey’s Women in the

Workplace study, which tracks the progress of women in corporate America. The

illustration below reflects our participation in McKinsey’s 2020 study. Specifically, the

illustration compares MFS' 2019 gender breakdown by level (highlighted in gray) to

other asset managers and to all companies that participated in the study. As the data

show, MFS has better gender representation than the other participating asset

managers at all levels except for the senior manager/director level.

As we continue to focus on increasing diversity at all levels of the organization, we have

identified mid-level and senior level managers as an area of opportunity for the firm and

will direct recruiting and development efforts toward this segment.



Culture – Sustain and Enhance an Inclusive Workplace

We believe the work we do to improve on diversity and inclusion relies heavily on our

culture – a shared appreciation and respect for our differences and a willingness to help

foster an environment where everyone belongs. These efforts are top down – starting

with our senior leaders, who set the example of being inclusive leaders. And they are

embraced bottom up – driven and owned by employees who take responsibility for

creating an inclusive workplace.

Learning – Firm-wide diversity and inclusion training

The opportunity to learn more about diversity and inclusion is always ongoing at MFS.

Firm-wide training includes leadership, management and employee inclusivity and

unconscious bias training.

Educating from within

Internally, we have created our own robust educational programming sponsored by our

diversity and inclusion/corporate citizenship team. This programming includes:

■ Diversity and inclusion speaker series featuring experts from around the globe who

provide engaging sessions open to all employees

■ Listening sessions where managers engage with their teams to raise issues of concern

and explore topics related to racial inequity and social injustice, among others

■ Ad hoc, targeted sessions such as our Juneteenth Day of Learning to promote a deeper

dive into racial disparity and open forum discussion with our CEO and head of diversity

on racial inequity

Making it personal – diversity and inclusion goalWe believe that every employee at MFS has responsibility for and a role in our inclusive

workplace. To ensure that diversity and inclusion remain a firm-wide commitment, we've

embedded it in our performance measurement through the creation of an employee D&I

goal. To achieve this goal, MFS employees must engage in at least three hours of diversity

and inclusion activities per calendar year, including but not limited to our corporate

diversity events, educational panels, recruiting events, participation in ERGs and

inclusivity training.

“A diverse workforce is only as good as the culture that supports it. In ours, shared beliefs and a common purpose create an environment where everyone is free to contribute and every voice is valued.”Carol GeremiaMFS President

Inclusivity at MFS – Employee Resource GroupsOur Employee Resource Groups (ERGs) are a critical part of

creating an inclusive environment at MFS. As the foundation

for our bottom-up support of diversity and inclusion, our ERGs

empower, engage and support diverse populations at MFS.

They not only create their own programming, featuring events

available to the broader MFS employee population, but also

provide ongoing education and support networks within and

outside their communities.

“As a woman of color, I look for companies that allow my work ethic and experience to speak for me and not judge me based on my appearance.

Working with MFS has been one of the best choices I've made. Although, I've only been here just under a year I feel like my voice matters just as much as someone who has been here for 20 years. Most companies only talk about diversity and inclusion and don’t actually do what they say. MFS not only talks about it, but fully embraces and demonstrates it in every department and aspect of the firm. Because of this, I am proud to work for MFS."

Takira Burrell

Client Services Representative

The mission of YPN@MFS is

to enhance the professional

growth, exposure and

development of our young

professionals, build their

individual capacity and

enhance their collective

contributions to MFS and our

community at large.

The mission of Pride@MFS is

to promote LGBTQ+ focused

networking, educational and

social opportunities for

members of the MFS family.

We aim to foster positive,

respectful, professional

relationships that enrich the

overall workplace.

The mission of WE@MFS is to

empower women to achieve

professional fulfillment and

contribute meaningfully to

the long-term success of our

company. WE will use the

power of shared experiences

to support and encourage

women to advance their skills

and leadership potential

through mentorship,

collaboration and advocacy.

The mission of Mosaic@MFS

is to foster an environment of

inclusion, empowerment and

equity for underrepresented

employees of color. We strive

to bring together diverse

voices, perspectives and

experiences to educate

ourselves and our allies about

the power of diversity.

More than 25% (506) of our employees currently participate in an ERG.


Community – Drive Diversity and Inclusion in Our Communities and Industry

The way we approach diversity and inclusion inside of MFS also drives the impact we make outside of the firm. While we continually work to build and sustain our own inclusive workforce, we also engage in many efforts to move the needle in our industry and globally.

Partner with global organizations to improve industry/global diversity – Whether we’re joining industry leaders to drive the conversation or working with global organizations to influence D&I more broadly, we believe that exchanging ideas, sharing insights and collaborating on initiatives will ultimately result in the greatest progress. Some of the organizations we work with include:

■ The Diversity Project (UK and US), a group of industry professionals, is working to accelerate progress toward an inclusive culture within the financial services industry.

■ The CFA Institute, which works with more than 40 participating firms (MFS among them) to incorporate more diverse perspectives into how they run their businesses and into investment decision-making to improve investor outcomes.

■ ShareAction is a UK-based non-profit whose mission is to tap into the positive potential of the investment system by working with investors to engage with companies and change unsustainable corporate practices.

ShareAction has developed a robust questionnaire for operating companies to complete on a range of workforce-related topics. To encourage portfolio companies to participate in ShareAction's survey and to consider disclosing workforce metrics and information more broadly, MFS is taking these steps:

– Assessing itself through the lens of ShareAction's Workforce Disclosure Initiative

– Directly encouraging portfolio companies to complete the ShareAction survey and publish those results

– Providing feedback on the questionnaire to ShareAction with the common goal of increased portfolio company participation

Ask for diversity metrics from our portfolio companies – We have long understood that diversity and inclusion, and an organization’s culture overall, are critical to its long-term success or failure. For this reason, we send a letter to the companies we own or are considering owning asking them to provide us with the following metrics:

■ Employee turnover/attrition

■ Employee composition

■ Diversity

Voluntary Turnover Rate■ Voluntary Turnover Rate

0%1%2%3%4%5%6%7%8%

202020192018

3.8%

6.8%6.6%

138TOTAL HIRES

13INVESTMENT HIRES

2020

174TOTAL HIRES

20INVESTMENT HIRES

2018

160TOTAL HIRES

28INVESTMENT HIRES

2019


We offer the same transparency into our culture by providing our own metrics in the letter (see three-year voluntary turnover rate below and employee composition/diversity charts in our global snapshot starting on page 10). If we are going to ask our portfolio companies to be aware of and work on their diversity and inclusion, we want to show our commitment to doing the same.

We believe our low turnover rate reflects our powerful culture. Employees find their fit here at MFS and are able to grow and develop in ways that make it possible to extend their tenure. While we recognize that low turnover supports our strong culture, we're also making sure that it doesn't impede our ability to grow a more diverse company in the future. Toward that end, while we made fewer hires in 2020 due to the pandemic, unlike many companies, we continued to recruit and attract diverse talent rather than freeze hiring. In fact, we believe the pandemic has created an opportunity to further diversify the candidate pool by creating more opportunities to work virtually.

Support diverse/underserved communities – Whether we’re talking about the investment management industry or the world around us, improving diversity and inclusion is a work in progress. In the past year alone, the uptick in racial conflict and focus on social injustice has reminded us that how we serve communities outside of MFS matters just as much as what we do inside the firm. Here is some of the work we’ve done:

Provide financial education for women – MFS recognizes the unique financial issues women face. As a powerful advocate for their financial literacy we offer women comprehensive financial education:

■ “Your Time Is an Asset” series of video panels and companion education resources covering women’s entire financial lifecycle

■ "Savvy Women" presentation featuring a live discussion where women can learn to own their financial future

Form partnerships to support underserved communities – We extend our culture of inclusivity to our communities outside MFS by partnering with charitable organizations in different regions, including:

■ Youth Without Shelter, a charity that supports youth facing homelessness in the Greater Toronto area

■ City Year, an organization with corps members that help prepare students with needed social, emotional and academic skills

■ Beyond Social Services, a Singapore-based charity that helps less privileged youths break away from the poverty cycle

■ Crisis UK, the national charity that supports the homeless in the UK

■ Exodus Foundation, an Australia-based organization that provides education and employment support as well as poverty relief to individuals and families

■ Teach for Japan, which aims to give children access to a quality education, regardless of region, school type or socioeconomic status

Moving the needle on diversity

We acknowledge that there is still much work to be done to make our industry more diverse and inclusive. MFS remains committed to achieving that goal. We begin by being transparent ourselves and by continuing our work to increase the diversity of our own firm over time. In the illustrations on page 10, we share the current state of our workforce as well as year-on-year progress from 2018 to 2020.

8 YEARS

5.8 PERCENT

0.5 PERCENT

MEDIAN GLOBAL TENURE

US POPULATION WITH DISABILITY

US POPULATION WHO ARE VETERANS


MFS – A Global Snapshot (by Gender and Ethnicity, as of 12/31/2020)

■ % Male ■ % Female ■ % Chose Not to Self-Identify

2020 Global Employee Snapshot – Gender

■ % Asian

■ % Black or African American

■ % Hispanic or Latino

■ % Native American or Alaska Native

■ % Two or More Races

■ % White

■ % Chose Not to Self-Identify

2020 US Employee Snapshot – Race/Ethnicity

Male

39.6% 59.9%

0.5%

Chose Not to Self-Identify

White

Two or More Races

Native American or Alaska Native

Hispanic or Latino

Black or African American

Asian

79.7%

1.8% 10.3%

3.7%

3.7%

0.1%0.8%

WE BELIEVE OUR LOW TURNOVER RATE REFLECTS OUR POWERFUL CULTURE. EMPLOYEES FIND THEIR FIT HERE AT MFS AND ARE ABLE TO GROW AND DEVELOP IN WAYS THAT MAKE IT POSSIBLE TO EXTEND THEIR TENURE.


Total Firm

0

5

10

15

20

25

30

35

40

45

202020192018

■ % Female (Global) ■ % Minority (US Only)

MFS Gender & Racial Diversity

39.4% 39.5% 39.6%

16.8% 17.2%18.5%

Equity Owners

0

5

10

15

20

25

30

202020192018


MFS Equity Owner & Gender & Racial Diversity

22.7%

9.6% 10.0% 10.7%

23.8% 23.9%

Investment Professionals

0

5

10

15

20

25

30

202020192018


MFS Investment Professional Gender and Racial Diversity

23.0%

14.7%

23.6%

16.6%

24.4%

19.0%

Portfolio Managers & Research Analysts

0

5

10

15

20

25

202020192018


MFS Portfolio Manager & Research Analyst Gender & Racial Diversity

20.3%

15.0%

21.3%

15.3%

22.1%

18.3%


Continuous improvementThe way we execute on our diversity and

inclusion strategy may change in the

coming years, but the goal – to make

MFS a more diverse and inclusive

company and help the industry do the

same – won't.

Defining clear diversity and inclusion

accountabilities, executing on them and

measuring our progress is critical to our

ability to continuously improve. As an

affirmative action employer in the United

States, MFS recognizes the importance

of accountability. For 2021, we've

identified the following mandates and

accountabilities across the firm:

■ To enhance our hiring practices to

increase diversity, we are requiring all

of our hiring managers to participate

in advanced interview skills training,

including diverse interviewers on each

hiring team and limiting in-house

referrals to expand the diversity of our

talent pools.

■ To cultivate diverse leadership

within our own employee population,

we are identifying development goals

for early and mid-level career high-

performing talent.

■ To honor our firm-wide commitment

to diversity and inclusion, we have

embedded D&I in our performance

measurement through the creation

of the employee goal described

earlier (culture).

Adapting to change Throughout our nearly 100-year history,

what has kept MFS strong and

sustainable is our ability to adapt to

change around our people. That means

staying relevant and connected to what

employees are living and breathing right

now and most important, empowering

them to drive their own outcomes.

MFS continues to believe diverse talent is

the best talent and an inclusive

workplace will allow that talent to

flourish. That takes a culture that always

values diverse perspectives, allows

employees at any level to contribute and

provides a work environment where

everyone belongs.

12

MEASURING OUR PROGRESS IS CRITICAL TO OUR ABILITY TO CONTINUOUSLY IMPROVE.

MFS 2020 Diversity Annual Report 13

MFS continues to believe diverse talent is the best talent and an inclusive workplace will allow that talent to flourish.

MFSE-BRO-795803-4/21 48161.3

Unless otherwise indicated, logos and product and service names are trademarks of MFS® and its affiliates and may be registered in certain countries.

Distributed by:

U.S. - MFS Investment Management; Latin America - MFS International Ltd.; Canada - MFS Investment Management Canada Limited. No securities commission or similar regulatory authority in Canada has reviewed this communication.

Please note that in Europe and Asia Pacific, this document is intended for distribution to investment professionals and institutional clients only.

U.K./EMEA – MFS International (U.K.) Limited (“MIL UK”), a private limited company registered in England and Wales with the company number 03062718, and authorized and regulated in the conduct of investment business by the U.K. Financial Conduct Authority. MIL UK, an indirect subsidiary of MFS, has its registered office at One Carter Lane, London, EC4V 5ER UK/MFS Investment Management (Lux) S.à r.l. (MFS Lux) – MFS Lux is a company is organized under the laws of the Grand Duchy of Luxembourg and an indirect subsidiary of MFS – both provides products and investment services to institutional investors in EMEA. This material shall not be circulated or distributed to any person other than to professional investors (as permitted by local regulations) and should not be relied upon or distributed to persons where such reliance or distribution would be contrary to local regulation; Singapore – MFS International Singapore Pte. Ltd. (CRN 201228809M); Australia/New Zealand – MFS International Australia Pty Ltd (“MFS Australia”) (ABN 68 607 579 537) holds an Australian financial services licence number 485343. MFS Australia is regulated by the Australian Securities and Investments Commission.; Hong Kong – MFS International (Hong Kong) Limited (“MIL HK”), a private limited company licensed and regulated by the Hong Kong Securities and Futures Commission (the “SFC”). MIL HK is approved to engage in dealing in securities and asset management regulated activities and may provide certain investment services to “professional investors” as defined in the Securities and Futures Ordinance (“SFO”).; For Professional Investors in China – MFS Financial Management Consulting (Shanghai) Co., Ltd. 2801-12, 28th Floor, 100 Century Avenue, Shanghai World Financial Center, Shanghai Pilot Free Trade Zone, 200120, China, a Chinese limited liability company regulated to provide financial management consulting services.; Japan – MFS Investment Management K.K., is registered as a Financial Instruments Business Operator, Kanto Local Finance Bureau (FIBO) No.312, a member of the Investment Trust Association, Japan and the Japan Investment Advisers Association. As fees to be borne by investors vary depending upon circumstances such as products, services, investment period and market conditions, the total amount nor the calculation methods cannot be disclosed in advance. All investments involve risks, including market fluctuation and investors may lose the principal amount invested. Investors should obtain and read the prospectus and/or document set forth in Article 37-3 of Financial Instruments and Exchange Act carefully before making the investments.

2020 diversity annual report - mfs

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