“You might dismiss a business case but you cannot dismiss a moral imperative to do the right thing.” – Georgina Philippou
On 21st Jan 2021 the Senior Advisor to the FCA, Georgina Philippou, gave a speech at the Ethnic Diversity in the City and Corporate UK Summit.
Philippou addressed the FCA’s Diversity and Inclusion responsibilities as an employer, as a public body and most notably as a regulator.
Here's the key takeaways from her speech:
The FCA wants to see a healthy financial services industry – It is the responsibility of every firm to form and foster cultures that incorporate diversity and inclusion.
It is also in the interest of companies to do this, with the most diverse companies far more likely to outperform the least diverse competitors. A study by Forbes Harvard Business Review found “diverse talent within your teams increases profits by a minimum of 17%, productivity by 23% and increases happiness within your business by 85%”.
A breakdown of ‘culture’
It is easy to become hindered and lost by the vernacular associated with D&I. The FCA has broken down what they believe to be the 4 drivers for embedding a healthy culture:
- A meaningful purpose
- An effective governance structure to facilitate good decision making
- Effective leadership including the tone from the top
- People policies that incentivise behaviours that create an inclusive environment
Enablement and acceptance of challenge
It is crucial that companies cultivate and actively promote a culture that is inclusive and safe, as diversity without inclusion will not lead to the desired change.
For example, The Banking Standards Board found, as part of their survey, that minority respondents were less likely to challenge their managers than their majority counterparts.
In the FCA’s words: “Diversity is one thing and inclusion is another, without an inclusive culture the value of diversity, when achieved, will not be realised”.
The Financial services sector is missing the mark
Earlier this week we saw a report from Green Park that the number of black leaders at FTSE 100 firms had dropped to zero. They also found in 2019 that only 1.6% of the Top 100 roles in the Finance and Banking FTSE 100 were held by Black colleagues.
Philippou commented “Remember that census figure – 40% of the London population is BAME"
"Moreover, the number of female FTSE 100 CEOs now sits at 5 (an increase of only 1 from 2012). The financial services sector may be one of the least diverse in the UK, but only with acceptance and actualisation of recommendations can change begin to happen."
The link to the full transcript of the speech can be found here
Click here to download our free Insight Deck on Diversity and Inclusion
Although diversity and inclusion is high on the agenda for regulators and firms alike, it’s difficult to get right.
We have designed a selection of new courses in collaboration with Sonya Barlow to empower businesses to achieve an essential base level knowledge of D&I topics, understand the key challenges and enable them to enhance their current initiatives.
You can browse these courses here>
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