FCA, PRA and Bank of England set out plan to improve diversity and inclusion in regulated firms
On 7 July 2021, the FCA, the PRA and the Bank of England published a discussion paper on regulatory plans to improve diversity and inclusion in financial services.
In the discussion paper, the regulators have set out policy options including, among others, the use of targets for representation, measures to make senior leaders directly accountable for diversity and inclusion in their firms, linking remuneration to diversity and inclusion metrics and the regulators’ approach to considering diversity and inclusion in non-financial misconduct. The discussion paper also focuses on the importance of data and disclosure in order to enable firms, regulators and other stakeholders to monitor progress.
The regulators believe that increased diversity and inclusion will advance their statutory objectives by resulting in improved governance, decision-making and risk management within firms, a more innovative industry, and products and services better suited to the diverse needs of consumers.
To assess progress the authorities are proposing collecting data from firms about their workforce. Prior to this there will be a one-off, pilot survey later this year which will help to develop the proposals set out in the discussion paper and test how firms’ can provide data with a view to considering regular reporting in the future.
The regulators are also asking for views on how any changes could be tailored to specific categories of firms to ensure it is proportionate.
The discussion paper is open until 30 September 2021. The feedback and data received will be used to develop detailed proposals, with a joint consultation planned for Q1 2022.