As we reported in an earlier blog post, the UK’s financial regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), have published proposals to boost diversity and inclusion (D&I) in the financial services sector (FCA CP23/20 and PRA CP18/23). The proposals are aimed at supporting healthy work cultures, reducing groupthink, unlocking talent and supporting better firm governance and decision-making.
Consultation is open until 18 December 2023 and the regulators have been engaging with interested parties on the proposals, encouraging comments and challenges to the proposals. In a series of blog posts, we will explore some practical steps to be considered at this stage. While we may see some adjustments in the Policy Statement due next year, it is likely that the core concepts will remain the same.
The FCA’s proposals require regulated firms with 251 employees or more to report annually on the diversity of their employees. We highlight below some questions that could be explored in preparation.
- Consider what data is currently available – how well do you understand your employee population just now?
- How many employees do you employ and in what locations?
- What data is available on the diversity profile of the areas in which we operate?
- How does our mix of people compare with that data?
- What gaps are there in the data we gather at the moment? Do we ask employees to tell us their:
- date of birth;
- sex or gender;
- disability or long-term health condition(s);
- ethnicity;
- religion; or
- sexual orientation?
These are the mandatory characteristics to be reported, with employees to be given the option to respond with “prefer not to say”.
- When we record data just now, do we use the categorisations proposed by the FCA? These are:
| Religion | Ethnicity | Sexual orientation |
| No religion | White | Heterosexual or Straight |
| Christian (all denominations) | Mixed or multiple ethnic groups | Gay or Lesbian |
| Buddhist | Asian or Asian British | Bisexual |
| Hindu | Black or Black British | Other sexual orientation |
| Jewish | Other ethnic group | |
| Muslim | ||
| Sikh | ||
| Any other religion |
- Do we currently gather any of the data types that are being encouraged as voluntary disclosures:
- gender identity;
- socio-economic background;
- parental responsibilities for a child/children under 18; or
- carer responsibilities: health conditions/old age?
- How do we assess the level of trust with our people when we ask them to share data of this nature with us? How will we plan to build that trust?
- If we are going to change the data we record, what steps will we need to take to ensure that we comply with data protection requirements?
