On 18 March 2021, the FCA published a speech by Georgina Philippou (Senior Adviser to the FCA on the Public Sector Equality Duty) entitled From regulator to firm to consumer: a virtuous chain of events.
Key points in the speech include:
- There would be an unfortunate irony in failing to recognise the range of financial services firms across and within sectors, and pushing a one size fits all approach to diversity and inclusion.
- The FCA has a role to play and that role starts close to home, in what it does as an employer, where the challenges it faces are similar to the challenges firms face.
- For the FCA as an employer, this means driving action in three priority areas: gender, ethnicity and social mobility – and making sure that it moves from the ‘D’ of diversity, to the ‘I’ of inclusion. That is, making sure that not only does it bring diverse colleagues in at junior levels, but those colleagues thrive and prosper and get good opportunities to show what they are capable of and to progress through the organisation.
- The FCA admits that it has some challenges to overcome. Statistics show that 30% of its associate colleagues are Black, Asian and Minority Ethnic (BAME), however only 10% of its senior leadership team are BAME. While this beats the FCA’s 8% target for 2020, there is still an uncomfortable discrepancy between junior and senior levels.
- The FCA fully recognises that its 60,000 firm population is very broad culturally, but there are some common elements. Healthy cultures are purposeful and safe and they support environments that are diverse and inclusive.
- Leaders within firms must acknowledge their status and actively recognise how their behaviour and actions can influence and support an environment of safety and collaboration.
- When it comes to culture and diversity and inclusion, there is no one size fits all, and it would be inappropriate for the FCA to mandate particular cultures. However, the FCA does expect firms to be able to articulate their purpose, to talk about how their governance structures drive good decision making, to set an appropriate tone from the top, and to be able to show that their people policies are effective in driving diversity and inclusion.
- Diversity and inclusion is relevant to much of what the FCA does – it is relevant not just to culture, people and leadership; it is relevant to integrity, to treating customers fairly, to pricing structures, to marketing and advertising, to environmental, social and governance strategies.
- Getting diversity and inclusion right is a virtuous chain of events. When the FCA sets it right as an employer, it helps it get the regulation of firms right – whether as a supervisor or as a policy maker. That directly impacts the firms it regulates, who – if they are diverse themselves – are more likely to design products and services in an inclusive way and reach a diverse customer base.