UK regulators have set out proposals to boost diversity and inclusion in financial services.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have released the consultation papers Diversity and inclusion in the financial sector and Diversity and inclusion in PRA-regulated firms, respectively.
Proposals include issuing rules and guidance to clarify that misconduct such as bullying and sexual harassment poses a risk to work cultures. The aim is to ensure that firms can act against employees for such behaviour.
Firms will have to develop diversity and inclusion strategies for how they will meet objectives and goals. They must also collect, report and disclose data against diversity and inclusion criteria, and set targets to tackle under-representation.
The FCA will expect companies to set at least one target for each of the board, senior leadership and employee representation.
The Treasury Women in Finance Charter found that female representation in senior management among charter signatories averaged 35% last year. Deloitte’s report Advancing more women leaders in financial services notes that women hold just 19% of executive positions in banking, capital markets and payments, and CityWire’s 2023 AlphaFemale Report found that only 12% of fund managers are female.
Additionally, the Parker Review’s 2023 update found that more than 100 of the FTSE250 have no ethnic minority board representation, or are unable or unwilling to provide data.
“For UK financial services to be competitive and for the companies in it to be well run with healthy work environments, it’s vital they attract, retain and promote the best talent,” said FCA chief executive Nikhil Rathi.
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