The UK financial services regulators are increasingly interested in the role diversity and inclusion plays in supporting better decision-making, better outcomes for firms and customers, and enhanced risk management. One question they are asking is whether an effective way to drive progress could be to link remuneration to diversity and inclusion metrics as part of non-financial performance assessments.
D&I is a hot topic in the tech sector generally, particularly given its role in bringing about profound changes in our society as we move towards an increasingly digital economy. Unfortunately, tech companies do not always perform as well as they should on the S (societal) and, indeed, the E (environmental) and the G (governance) measures of ESG. Fintechs are also operating within a highly-regulated industry with the potential for major societal and consumer impacts, which attracts more scrutiny on ESG issues generally.
Representing both tech companies and key players in the financial services space, fintechs should take note of regulators' plans to monitor, track and improve diversity and inclusion in regulated firms.
Read more in our recent EmploymentLinks blogpost.
Regulators have made it clear that linking progress on diversity and inclusion to remuneration could be “a key tool for driving accountability in firms and incentivise progress".