When we attended the Association for Financial Markets in Europe (AFME) Compliance & Legal Conference in September (“AFME C&L”), diversity and inclusion (D&I) was a theme that pervaded many of the keynote speeches and panel sessions. The FCA and PRA had just issued their consultation on D&I – and for many a diverse and inclusive environment was already seen as a business imperative. We outline here some of the messages we found interesting and insightful.
Regulators believe that increased D&I will advance statutory objectives through more robust governance and decision-making. Derville Rowland from the Central Bank of Ireland shared her insights on the topic: “One indicator of an effective culture is demonstrated by a commitment to diversity and inclusion throughout a firm’s organisation, including at board level – and by “diversity” here I mean not just gender diversity but also other factors like ethnicity, socio-economic status and also diversity of thought. Why? To prevent group-think. To guard against overconfidence. And to promote internal challenge.”
Diverse representation across a business in terms of sex or gender, sexual orientation, ethnicity, age, disability or other health conditions, religion, faith, socio-economic background and carer responsibility are all relevant to challenge the status quo and to support good outcomes for consumers and positive contributions to wider society.
A role for D&I in upskilling and managing the ever-changing environment?
At AFME C&L, industry leaders discussed the need to upskill all departments of financial services firms. For example, the compliance and legal functions now need to be comfortable with some level of data analysis and knowledgeable about technological advancements such as digitalisation and AI. In a world where most firms are struggling with skills gaps, the panel on Creating a Culture of Diversity & Inclusion in Financial Services talked about how valuing people’s strengths, and not their conformity, can unlock the talent of each individual in a team. Key to this is treating people as individuals – and understanding people’s needs in order to work effectively when they may be neuro-different, for example.
For us, a fascinating part of that discussion was around the challenge of obtaining good diversity data, with participants commenting that data sharing by individuals is indicative of the firm’s culture, showing whether people have trust in the leadership to use the data to drive a culture that supports the growth of diversity and a continuing supportive environment.
Some further reading on D&I
- The FCA and PRA propose measures to address non-financial misconduct and to boost diversity and inclusion in financial services
- Diversity and Inclusion: from pay gap reporting to linking executive pay to diversity metrics
- Ethnicity Pay Reporting: guidance for employers
- New EU pay transparency directive: key impacts
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