As the Treasury Select Committee’s report sets out, there has been welcome progress on representation within financial services but this has not been fast enough, and there are pockets where no progress is discernible and significant cultural issues remain.
In this context, we share the Committee’s view that there is an important role for regulators to play, given the link to our statutory objectives and the relevance for financial services’ competitiveness. The Committee itself noted that there is clear evidence that diverse firms achieve better results. And we continue to believe that greater diversity and inclusion within the firms we regulate can deliver improved internal governance, decision making and risk management. The Committee therefore shares our view that change is needed, and has called on boards and senior leadership of firms to take greater responsibility for delivering it.
It was for those reasons that we consulted on proposals to boost diversity and inclusion in financial services. After extensive discussion, including with the industry, our starting point was that what gets measured gets done and transparent, comparable data would benefit firms, employees and the wider economy. We welcome the Committee’s feedback on our consultation.
This year, we will prioritise proposals that tighten expectations on firms to tackle misconduct such as bullying and sexual harassment. We will also consider the Committee’s recommendations on whistleblowing and the use of non-disclosure agreements, building on our existing work.
We will reflect on the range of views received, particularly those of the Committee, on our proposals that firms should set their own diversity and inclusion strategy and collect, report and disclose data against certain characteristics.
The Committee has asked us to consider how we engage with boards and other senior leaders on their firms’ culture and encourage those we regulate to adopt family friendly policies with equality impact assessments. We will consider these, and other, recommendations carefully.
