Three financial regulators have called for feedback on how to improve diversity and inclusion in the financial services sector, amid concerns that existing initiatives are not working.
The Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and Bank of England have jointly published a discussion paper setting out policy options. These include the use of targets for representation, and the introduction of new measures to make senior leaders directly accountable for diversity and inclusion in their firms.
It comes after a report from the Green Park Business Leaders Index showed a decline in the number of black leaders and the ‘black pipeline’ to senior management in FTSE 100 companies.
The report also found that fewer than one in 10 management roles in financial services are held by black, Asian or other minority ethnic people.
“We are concerned that lack of diversity and inclusion within firms can weaken the quality of decision-making,” said Nikhil Rathi, chief executive of the FCA.
“We look forward to an open discussion on how we should use our powers to further diversity and inclusion within financial services, to the mutual benefit of firms and their customers.”
The discussion paper will be open until 30 September 2021, and a joint consultation on the feedback has been scheduled to take place in the first quarter of 2022.
The regulators have suggested collecting data from firms about their workforce, and conducting a survey later this year to help develop the proposals set out in the discussion paper. They are also asking for views on how any changes could be tailored to specific categories of firms such as fintech firms.
“Diversity and inclusion is beneficial for financial stability,” said Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England.
“Groupthink and overconfidence are often at the root of financial crises. Enabling a diversity of thought and allowing for an array of perspectives to coexist supports a resilient, safe and effective financial system.”