Diversity & Inclusion (D&I) has been eluding many firms since the FIA mentioned it back in 2016. There have been a number of FCA speeches and papers published relating to D&I since then, the latest being CP23/20, written in conjunction with the PRA and published in September 2023.
Many firms have made a habit of viewing D&I as another ‘nice to do’ aspect of being an authorised firm and typically only larger firms have made any meaningful progress at all. They have still not yet grasped the fact that moving forward with D&I is a regulatory matter.
Taking action in relation to D&I has been ‘unchartered territory’ within the financial services sector, meaning that we’re only just at the beginning of a long journey to provide the evidence-based work on D&I that the FCA wants to see. Most of the focus so far has been on recruiting the right ‘statistics’ and little else.
In reality, we can spot authentic intent a million miles away and unfortunately firms often work on D&I because it looks good (greenwashing at its best) with little understanding of the ‘why’.
Now there may well be a bit of greenwashing here too to look good and garner some free and easy PR. If it ends there, then there’s a danger zone that regulated firms most definitely don’t want to step inside.
However, it it is about being genuinely authentic – that the activity matches the true aspiration of the firm – then that truly is a lively active business culture at work.
The FCA’s latest paper places significance on larger firms of 251 employees or more and there is a leaning towards inclusion as well as diversity. The FCA makes a point that inclusion can be difficult to measure but maybe that’s because it simply takes more time and effort and, if done right, might produce outcomes that the firm won’t be proud of.
If we turn diversity and inclusion on its head and consider inclusion at the front and centre we’ll find that by default we’ve considered diversity in its entirety, rather than only focusing on a particular ‘theme’ of diversity that has been determined by senior management as an easier path for measurement.
If we are to be truly diverse, we need to be considering all aspects of diversity so that we produce a broad range of diverse perspectives, focusing not only on our employees’ personal development, but also customers’ experience of our products and services.
In reality, it’s time for firms to genuinely canvass their employees and customers to understand their perception of the firm’s true focus on D&I, rather than making decisions within the HR or leadership team. When it comes to D&I we have to work collaboratively – that in itself is being inclusive.
It goes back to the FCA’s desire to see firms show evidence of growing a good business culture. Forget regulation for a moment and consider ‘doing the right thing’ not because the FCA expects it, but because it’s the right thing to do.
If you would like to leave a comment, observation, pose a question or request further information about how to embed a good culture into your business feel free to contact me.
OTHER BLOGS IN THIS SERIES
Driving cultural change – the case for culture
Driving cultural change – leadership
Driving cultural change – purpose
Driving cultural change – governance
Driving cultural change – people
Psychological safety – is it for real?
ABOUT THE AUTHOR
Julie Ampadu is the current chair of The Association of Professional Compliance Consultants (APCC), a member of the Reporting & Data Standards Transformation Board for the Bank of England (BoE) and Financial Conduct Authority (FCA) as a representative of the APCC and the founder of Chameleon Compliance Ltd and Business Chameleon Ltd.