Interesting to read today that the Bank of England (BoE), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) will be consulting until 30 September 2021 on bringing diversity and inclusion (D&I) targets within financial regulation (see more details here).
The regulators note that diversity can "reduce groupthink, encourage debate and innovation" and are keen to accelerate the pace of change within financial sector workforces. As such, they are looking to introduce regulatory codes including, amongst other things, the use of targets for representation, making City executives accountable for D&I in their firms and linking the remuneration of businesses' D&I metrics.
This consultation will be welcomed by those who work in or are involved in the D&I sphere as it reflects current commentary that D&I adds value to the bottom line and real change requires management accountability rather than bolt-on programmes such as unconscious bias training (see for example this Fortune article in April). Business executives may, however, consider this an unwelcome distraction in difficult times when businesses have been hit by the dual challenges of Brexit and COVID.
That the regulators have stepped into the debate suggests that despite feelings in some quarters of D&I fatigue, demands for diversity will not be going away and businesses would do well to heed that message as it is fast coming a regulatory issue.
More inclusive work cultures encourage better judgement through a greater debate of ideas, it can help cultivate more effective decision-making.