Recent world events have shone a light on some of the challenges and issues we have as an organisation in relation to ethnicity and race. For sustainable change to take place, it’s vital that there is a shift to action. We need to commit and be accountable to adopting particular actions and behaviours to make change.
We’re committed to change
We’ve worked hard over recent years to make sure the FCA is more ethnically representative of the society we serve, and that everyone, regardless of their skin colour, has fair opportunities to work here, to develop and to progress. But we know that we haven’t done enough.
Recent events have highlighted the impact of systemic racism and discrimination in society. And the data that we track, through our diversity dashboard and our pay gap data, demonstrates that we still have an ethnicity imbalance right across the organisation and therefore some difficult issues to address. While we continue to make progress, there’s still so much more to do, and things are not changing at the pace we’d like. That’s why we have made a commitment to change.
The work we’re doing is not reactive to recent events – but those events, and the elevation of the voices of our people, have generated the momentum needed to galvanise action – to make sure we take bolder action and make firmer commitments to change. By publishing our ethnicity action plan externally, we seek to be transparent about our challenges, hold ourselves accountable for progress, and set an example to the firms we regulate.
We would all benefit from a more diverse and inclusive financial services industry, and we have a key role to play, both as an employer and a regulator, in making change happen.
We recognise that we have many other diversity and inclusion challenges, both as an employer and a regulator. Gender and social mobility remain priorities for us alongside ethnicity, with work continuing across all other protected characteristics too. But our data, and the lived experiences of our people, show us that we must not shy away from calling out our ethnicity challenges and being specific about how we address them.
Our action plan
We’ve grouped our strategic actions into 5 areas of initial focus, and will build on and develop this plan over the coming months and years.
1. Transparency and data to hold us to account
Pay gap and data breakdown
Having more granular data allows us to better understand our issues, and be more targeted in our action. It demonstrates our commitment to transparency and to owning our challenges, which sets an important example to industry. Last year we published our ethnicity pay gap for the first time. We recognise that the grouping of black, Asian and minority ethnic (BAME) people masks underlying differences between ethnicities. So this year, alongside our gender pay gap, we’ve published a breakdown of our ethnicity pay gap and the intersectional ethnicity-gender pay gap, as well as our disability pay and bonus gap. We’ll also look at where else we can break down the BAME category in our data – for example in our diversity and inclusion dashboard and in recruitment data.
We’ve agreed that we should expand our gender and ethnicity targets beyond our Senior Leadership Team (SLT) – introducing targets at Manager, Technical Specialist and Senior Associate level. Improving our mix in these areas is vital, not least because these are pipeline roles for senior leadership. We’re also looking at whether we should revisit our BAME SLT target – this is currently set at 13% by 2025, which is aligned with UK population data.
2. BAME talent pipeline and progression
We’re not lacking BAME talent in the FCA (or in the external market). But there are several factors that mean we still have structural imbalances in our organisation. We need to invest more in developing and progressing BAME talent if we want to address these imbalances. Examples of actions that we’ll test include more objective, transparent and inclusive talent reviews, sharing recruitment questions in advance, challenging non-diverse shortlists, use of diverse interview panels, more cross-organisation moderation in recruitment, and making better use of acting-up opportunities in development. We also commit to continue our BAME sponsorship programme, which is in its second year.
3. Training and support
Providing the necessary training and support is key for advancement in racial equality. We’ll be providing more support for managers as well as understanding the challenges that our managers face through a series of focus groups. We have introduced a ‘Managers’ Tips for Talking’ toolkit – encouraging managers to have conversations about race, getting comfortable with being uncomfortable and helping create safe spaces for discussions to take place.
We’ll be refreshing our Unconscious Bias mandatory training, exploring more impactful alternatives and rolling out three workshops across the organisation to support the changes we want to see. These workshops will focus on exploring privilege – recognising and dismantling our personal privileges so we can understand their impact and use the power that comes with privilege to level the playing field for BAME colleagues – as well microaggressions and bystander intervention to help colleagues call out bad behaviour.
We’re developing a focused ally strategy and have launched an ‘Acts of Allyship’ toolkit to support that. We also rolled out an action-focused pledge campaign on our commitment to change. Crucially, we all need to support each other and hold each other to account on the pledges we make.
We want to support all our people to feel confident to speak out when they see bias at play, to ask questions and to challenge, in a way that encourages conversation and supports positive change. We want everyone to be active allies and champions for change.
It’s vital that all colleagues are accountable for their part to play in making progress.
Our diversity and inclusion objective at Manager, Technical Specialist and SLT level is an important part of our accountability framework. This means our work on diversity is a core component of our management and leadership roles. With bonus payments based on individual performance against objectives, the link between performance and pay is clear.
Each year our Executive Diversity Committee holds a challenge session with our Executive to make sure they’re taking personal accountability for progress – and our comprehensive diversity and inclusion dashboard allows us to measure progress and hold our SLT to account. The Board also plays an important role in holding the organisation to account – and our Chair and Non-Executive Directors (NEDs) provide robust challenge on diversity and inclusion.
We commit to keeping accountability embedded right across the organisation.
5. As a regulator
As a regulator, we remain committed to prioritising diversity and inclusion, as part of our Public Sector Equality Duty and because it’s so integral to good culture and conduct. Our focus on this will increase over the coming year. We’ll do more to consider how we can better understand disadvantages and disparities faced by BAME financial services users and feed that into our policy work. We’ll do more to embed diversity and inclusion into our culture and supervisory work, and to actively identify where we can support positive change.
By publishing this first phase of our commitment to change, we’re holding ourselves to account on behalf of the consumers we protect and the markets we regulate. We do not underestimate the importance of our role as a regulator in supporting wider societal change.