SBAI Response to FCA Consultation Paper 23/20 on Diversity and Inclusion
The SBAI supports regulation that fosters healthy work cultures, reducing group think, and unlocking talent. While we are supportive of some elements of the proposal, we caution the FCA against the conflation of diversity of thought with demographic diversity.
Regarding non-financial misconduct, the SBAI agrees that Discrimination and Sexual Harassment (all under standard employment law) should be considered non-financial misconduct as they bring into serious question an individual’s integrity - posing risk to firms and wider industry confidence.
Regarding the collection of Demographic Diversity Data (and public disclosure of such data) and setting diversity targets:
- As stated in our response to FCA Discussion Paper 21/2 on Diversity and Inclusion, we reiterate the distinction between demographic diversity and diversity of thought, and caution against the conflation of the two.
- The proposed public demographic diversity reporting does not provide meaningful metrics to enable consumers to assess whether good consumer outcomes have been achieved.
- It is not clear that the proposed approach meaningfully supports the FCA’s operational objectives.
- It is not clear why the collection, regulatory reporting, and publication of demographic diversity metrics should be mandated by the FCA.
We highlight in our response that organisations should focus on promoting inclusive cultures (an important precondition for diversity of thought to occur), rather than having a narrow focus on demographic diversity.