On 22 January 2024 the House of Commons Treasury Committee published the transcript from a meeting on 17 January at which it heard oral evidence to form part of the ‘Sexism in the City’ inquiry. This inquiry is examining the barriers faced by women in financial services and the progress made in removing gender pay gaps.

The witnesses giving evidence included a panel of regulators, comprised of Nikhil Rathi (Chief Executive of the Financial Conduct Authority (FCA)), Sarah Pritchard (Executive Director for Markets and International at the FCA), Vicky Saporta (Executive Director of Prudential Policy at the Prudential Regulation Authority (PRA)) and Sam Woods (Chief Executive of the PRA).

Key discussion points

The evidence given by the regulators related to their respective discussion papers on diversity and inclusion, published in September 2023. Points discussed in the meeting included the regulators’ objectives for the proposals:

Mr Rathi outlined four key objectives of tackling sexism from the FCA’s perspective:

  • To encourage healthier working cultures, which is why there is a specific element of the proposals around tackling ‘non-financial misconduct’.
  • To address the FCA’s new secondary competitiveness objective, given the importance of talent for good business.
  • Improving risk management, as reduced diversity can lead to group-think.
  • Supporting the FCA’s consumer protection mandate and addressing diverse consumer needs through stronger diversity.

Ms Pritchard flagged that the industry has been asking the FCA for some regulatory intervention in this space and particularly in two key elements set out in the consultation – firstly non-financial misconduct, and secondly setting strategies, targets and data reporting targeted at the largest firms only.

Mr Woods noted that the PRA’s overall motivation for its proposed , which is slightly broader than the FCA’s, is trying to improve outcomes in terms of group-think and the risk of financial blow ups resulting from it.  

Some of the particular proposals set out in the papers were also discussed, with the regulators explaining some of the themes from the responses received.

Next steps

The FCA plans to use the information gathered by the inquiry to inform its supervisory programme surrounding non-financial misconduct. A policy statement is expected this year to set out final rules on diversity and inclusion, which would enter into force in 2025.