Holding firms to account for diversity and inclusion at senior levels

Diversity and inclusion are important issues to all businesses and it appears the FCA is considering how it can best use its power as a regulator to address the lack of diversity at senior levels within the financial services sector.

The CEO of the FCA, Nikhil Rathi, recently gave a speech on why diversity and inclusion are regulatory issues, raising the importance of diversity to management teams in providing adequate challenge, in creating an environment where all people feel they can speak up and in ensuring the firms’ ability to understand the different communities they serve. 

With data suggesting that fewer than 1 in 10 management roles in financial services are held by black, Asian or minority ethnic people, the industry clearly has a long way to go. 

With the increasing trend of regulatory scrutiny on senior management and the FCA's remarks on diversity and inclusion, firms should be considering the diversity of their senior management teams and whether changes need to be made to ensure they have the right management team for the firm, its business and the challenges it faces. 

As the FCA will be considering these issues further over the course of the year, this will be a space to watch.