08 Dec APCC Chair Julie Ampadu shares her Article for the Westminster Business Forum on Diversity & Inclusion In Financial Services
Diversity & Inclusion In Financial Services
Is It Clear how Firms Approach Diversity & Inclusion?
The Financial Conduct Authority (FAC) is continuously relaying communications about its focus on culture within the financial services environment. It makes it’s behavioural expectations of firms very clear. Exactly how a firm approaches Diversity & Inclusion is a key part of evidencing a firm’s culture, however, genuinely engaging with the improvement of Diversity and Inclusion is currently a challenge for many authorised firms.
Going Beyond Compliance
There is a tendency across all regulated sectors to be focused on the ‘FCA Rules’ from a compliance perspective. Firms have typically spent time and energy ensuring that they are staying within the FCA’s requirements based on their own regulated sector, but they’re missing important messages which are far more holistic and to which all firms, whatever the sector, must listen.
Data For Data’s Sake
As Diversity is an easier parameter to measure, firms unfortunately fall into the trap of gathering data for data’s sake, based on strategic ‘targets’, not really understanding why they’re important, or how they will benefit the firm, employees or customers. If we approach this from another angle and ask ourselves how we are inclusive as an organisation, this will provide us with the answers we’re seeking about diversity.
Why Should Firms Be Diverse?
We must then consider our approach as to the ‘why’. “Why should we be a diverse organisation?” The FCA has communicated its concerns over the lack of diversity on boards and this also plays out within the wider population of the firm. Cognitive diversity is what the FCA is seeking as a result of the work that firms undertake in this area. It’s helpful for firms to ask themselves, “how do our diverse employees add to the cognitive diversity of our firm?” What’s in it for us, what’s in it for our customers and what’s in it for them? How committed are we or is this just another compliance tickbox exercise?”
Broadening The Focus
I work extensively with boards of FCA authorised firms and unfortunately, this message about cognitive diversity is a difficult concept for most to consider. Diversity progress generally appears to be concentrated within 2 or 3 key areas of diversity, but all Protected Characteristics are equally important, as well as it being legally required for firms to provide reasonable adjustments for all Protected Characteristics. Understanding and considering neurodiversity hasn’t even hit the shelves for the majority of firms and ‘diversity’ in general stops at the end of the recruitment process.
An Even Wider Scope
If we turn to inclusion, we’re looking at an even wider scope. Firms should look at how their employees are inclusive towards their colleagues, whether a Tier 1 or Tier 2 employee. The new hybrid working model which so many firms have now adopted continues to create challenge. A new range of skills is required from business leaders in order to adapt to their employees’ needs. Firms must ensure a culture of psychological safety, where all employees have a voice that is heard, from
directors to junior employees. They must feel safe to speak up with their concerns and ideas and have the ability to challenge, with their voices being heard.
Within the financial services sector, we’re only just at the beginning of a long journey ahead. Start in the boardroom and make sure discussions are informed by the actual culture of the firm, involving everyone within the firm on this journey.