Equity Due Diligence

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We believe that the best performing investment firms will be those that are approaching diversity as they would any other business priority.

In an effort to fully use the levers we, as investors, have at our disposal, Stardust Equity compiled the Equity Due Diligence Questionnaire: a diligence tool assessing firms’ commitments to combating the unconscious biases that prevent women and BIPOC from achieving their full potential and creating an organizational culture that equally values and promotes diverse talent. 

The core of our investment thesis has always been to use our capital to create a more equitable world, and we recognize that inherently intertwined in that pursuit are both gender and racial equity. We have recently updated our questionnaire to reflect our fundamental belief that in cultivating investments which represent all facets of diversity, we are better able to bring about the large-scale social and environmental changes we seek.

We subscribe to the view that an equity-focused investment approach will positively impact investment performance. A culture that celebrates diversity and inclusion fosters creativity and innovation, brings different skills and perspectives, and ultimately leads to better business decisions. As such, this assessment is an integral part of our diligence process and we request that all our investment managers and advisors complete this questionnaire.

This process is not solely motivated by profit: we also recognize that capital is a catalytic lever for social change. Fundamental to Stardust Equity is our mission to put capital to work for both competitive returns and positive social and environmental impact. We have found that this equity-focused diligence process creates essential change in the field, sparking conversation and igniting important self-assessment and internal policy changes. Many investment firms do not know that they have diversity and inclusion problems because they are not actively assessing or measuring where they stand, or the practices, policies and culture that got them there. Through our equity-focused engagement, investment firms are able to identify, measure, and address their representation issues whilst becoming more transparent in the process.

Our Equity Due Diligence Questionnaire collects information in the areas of interest where we believe equity analysis is most impactful:

Internal Policies & Practices

Internal policies and practices play an important role in combating the unconscious biases that prevent women and BIPOC from achieving their full potential and creating an organizational culture that equally values and promotes all talent. The questions in this section aim to understand the efficacy of the actions that firms are taking in order to achieve gender and racial parity within their own ranks through assessing metrics including their gender and racial wage gap, or the robustness of their equal opportunity policy.

Investment Approach

We believe that integrating diversity analysis into financial analysis leads to better ability to detect risks and opportunities that may otherwise be overlooked, resulting in better investment outcomes. Further, by simply incorporating an equity analysis in investment decision-making and portfolio management activities, investors have tremendous leverage to influence how systems of power value women and BIPOC. The questions in this section aim to understand the actions that firms are taking as investors, owners and operators to promote gender and racial equity by incorporating key diversity metrics into their investment theses and diligence processes.

Below, and available for download on the right-hand side, are the Equity Due Diligence questions.

Internal Policies & Practices

Decision Making

Who makes decisions within the firm and how is diversity brought into that process?

  • How many women are on the company’s board?
  • What percentage of the company’s board is composed of women?
  • How many BIPOC are on the company’s board? 
  • What percentage of the company’s board is composed of BIPOC
  • Is the Board/IC Chairperson or equivalent position held by a woman or BIPOC?
  • Does the Firm consider itself a minority-owned or woman-owned business?

Team Composition

Diversity by level

  • What percentage of the firm’s total employee base are women?
  • What percentage of the firm’s employee base are women of color?
  • What percentage of investment professionals are women? 
  • What percentage of investment professionals are BIPOC?


What is total compensation by level by gender and race? (Total compensation includes salary, bonus, carry and equity compensation, if applicable)

  • Does your firm have a fair remuneration policy in place?
  • What percentage of the firm’s top 10% compensated employees are women? 
  • What percentage of the firm’s top 10% compensated employees are BIPOC?
  • What is the firm’s mean gender pay gap?
  • What is the firm’s racial pay gap?
  • Did the firm ever perform an internal or external compensation audit to identify gender and/or race-based variations in pay? Please discuss the results.


How does the firm view diversity in the context of hiring?

  • Does your firm have an equal opportunity policy in place? If so, please provide a copy.
  • Please describe the approach to gender and racial diversity and inclusion at the firm. Where does the firm want to be in this area in five years and how is it getting there?
  • What are the hiring practices used to ensure increased diversity? (e.g., removing gender-specific language from job descriptions, requiring a diverse slate of candidates to be presented to hiring manager, removing gender-specific names/words from CVs, using standard set of questions to avoid unconscious bias...)
  • What percentage of new hires in the last year were women? What percentage of new hires in the last year were BIPOC?

Retaining Talent

How well does the firm retain diverse talent?

  • What is the median tenure (in years) of the firm’s female employees?
  • What is the median tenure (in years) of the firm’s male employees?
  • What is the median tenure (in years) of the firm’s BIPOC employees?
  • What is the median tenure (in years) of the firm’s white employees?

Developing and Promoting Talent

How does the firm develop and promote diverse talent?

  • What is your record of promotions by gender and race over the past three years?
  • Do you have formal or informal mentoring programs?

Workplace Policies

What workplace policies and practices are in place to promote gender and racial equality?

  • Does the firm offer fully paid parental leave? 
  • How many weeks of fully paid primary/maternity and secondary/paternity leave does your firm offer? 
  • For those employees that returned from parental leave, what was the average number of weeks taken? 
  • Does your firm provide family care benefits/services? (e.g., back-up care, care subsidy/family care, on-site child care, etc.) 
  • If the firm provides on-site childcare, are all facility employees provided training/ education related to Child Sexual Abuse prevention? 
  • Does your firm offer an option to control and/or vary the start/end times of the workday or workweek (e.g., flextime), or the location (e.g., telecommuting)? 
  • Does your firm offer insurance coverage for fertility services? 
  • Does your firm have a sexual harassment policy in place and offer sexual harassment training? If not, please explain. 


How are workplace policies effectively implemented in your firm?

  • Does the firm require a gender and/or racially diverse slate of candidates for management roles? 
  • Do senior managers have clear gender and racial diversity and inclusion goals included as part of their annual performance reviews? How does this affect their compensation?
  • Does the firm train managers on eliminating unconscious bias? Is this training mandatory? 
  • Does the firm utilize an impartial third-party investigator to evaluate all sexual harassment allegations? 
  • Does the firm prohibit inclusion of a confidentiality provision (or silencing agreement) in sexual harassment or discrimination settlement agreements? 
  • Please complete the following chart regarding the Firm’s workforce composition by gender and race/ethnicity, using definitions provided by the Equal Employment Opportunity Commission (EEO) for the Firm’s US workforce.

Corporate Behavior

How does your firm support gender and racial equality externally?

  • Is the firm a signatory to, or is the CEO/Chair a member of any organization(s) in which the primary mission is to advocate for gender equality? (e.g., 30% Club, Signatory to the UN Empowerment Principles, Signatory to the Women in Finance Charter)

Investment Approach

Deal Structuring/Term Sheets

  • How is the firm valuing gender and racial representation on investees’ teams and boards?
  • Is the firm negotiating term sheets/investment agreements to pursue gender and/or racial balance, policies and reporting? (e.g., tranching capital injections tied to ensuring diversity in senior teams, demanding fair pay/policies, flexible working, etc.)

Post Investment Management

  • How is the firm reinforcing a diversity agenda as a board member and investor/owner of companies?

Impact Reporting

  • Does the firm receive race and sex-disaggregated data from investees about their employees, customers, beneficiaries, and/or partners?

This question list was created in alignment with the Criterion Institute, Catalyst at Large, Bloomberg Finance, and Equileap.

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