Context
The FCA, PRA and Bank of England have issued a joint Discussion Paper which sets out their plans to improve diversity and inclusion within regulated firms.
Key points to note
- 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.
- There are policy options set out within the paper which include:
- 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.
- In order to monitor progress the paper has also focused on the importance of data and disclosure.
- 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 30th September 2021. The feedback and data received will be used to develop detailed proposals, with a joint consultation planned for Q1 2022.
Next actions
Firms should keep a check in their junk / spam folders for the communication mentioned above. If you do receive such a request you should endeavour to respond to the regulator at the earliest opportunity.