Working together to improve diversity and inclusion in the financial sector
08 July 2021
FCA, PRA and Bank of England have set out their plans to improve diversity and inclusion in the financial services sector in a new discussion paper, DP21/2: Diversity and inclusion in the financial sector - working together to drive change (fca.org.uk). They are asking for all types of firms and other stakeholders in the sector to join in on the discussion as to how they can jointly speed up the pace of change, provide meaningful support to the sector, and develop robust future policy.
The pace of improvement in diversity and inclusion in the sector to date is discouraging:
- The rate of representation for ethnic minorities in senior management is declining, with fewer than 1 in 10 senior roles being held by members of this group.
- The rate of female representation in senior management amongst participants to the Women in Finance Charter has increased by less than 1% each year since the charter was launched by the UK government in March 2016.
- Social mobility shows weak progress with very few roles being filled by people from lower socio-economic backgrounds.
Greater diversity amongst senior management should mean better run firms that meet the diverse needs of customers whilst supporting a resilient financial services sector. This would be achieved through an improved culture embracing a wide range of different views and perspectives, in which decisions are challenged effectively.
Assessing progress against objectives will be key for the regulator, with a proposal to collect specific data from firms regularly, along with a one-off pilot study later in 2021 to help develop the data collection process.
The discussion paper is open until 30 September 2021 with comments to be emailed to firstname.lastname@example.org. The feedback and data received will be used by the regulators to develop their detailed proposals, and a joint consultation is planned for early 2022.
Frances Smythe, Head of Culture and Organisational Development at OAC, comments: “We recognise the benefit of being an organisation that is truly diverse, and a company that embraces diversity in all its forms. We work with several organisations to create common understanding of good practice, supporting levels of diversity across all protected characteristics within our workforce: socio-economic background, thinking styles and intersectionalities. It is vital that our own Board supports a diverse culture by its leadership of the business and its own composition. We welcome this renewed focus on diversity and inclusion from the regulatory bodies and believe this will lead to a sector wide improvement.”
For more information
Head of Culture and Organisational Development
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