Following the launch of a discussion paper by the UK financial services regulators, Kevin Poulter joined Michelle Dewberry of GB News to discuss the slow progress of diversity in the sector and steps being considered to promote change.
The paper, Diversity and inclusion in the financial sector – working together to drive change, is produced by the Bank of England, Financial Conduct Authority and the Prudential Regulation Authority.
One of the more controversial talking points is linking senior manager and CEO pay to meeting diversity targets. Although non-financial targets are often used when assessing bonuses, it is not mandated and left to the broad discretion of employers to determine the appropriate metrics for calculating bonus pots and how they are shared amongst employees.
Despite legislation being in place for many years to protect underrepresented employees (and decades in respect of sex and race), change has been slow across many professional sectors. At a senior management level, fewer than 1 in 10 are from a black, Asian and minority ethnic background and fewer than a third are female. 89% of senior manager roles are held by those from a higher socio-economic background.
Businesses have looked to drive cultural change for many years and mounting pressure from clients, customers and the workforce is forcing bosses and shareholders to pay attention. Scrutiny of Environmental, Social and Governance (ESG) objectives and real change is increasing. Diversity, inclusion and representation is a key driver of social change and one which will continue to be key to employee engagement and commercial success.
To see the interview on YouTube, click here.
The Bank of England and the Financial Conduct Authority (FCA) said they wanted to speed up progress in making the City of London more diverse, in a step they said could help to boost the safety and soundness of UK banks and investment firms. Setting out a package of reforms in a discussion paper, the regulators said they were considering mandatory rules to make senior leaders directly accountable for diversity and inclusion in their firms, as well as linking progress to their pay.