Our progress towards our ethnicity and gender targets to improve senior representation, including our updated targets for 2025.
We recognise the important role we play, as a regulator, in improving diversity and inclusion across financial services. That’s why in June 2016 the FCA was in the first group to sign the Government’s Women in Finance Charter, which seeks to increase the representation of women in the financial services sector, particularly at senior levels.
The Charter requires us to set and report on gender targets for our Senior Leadership Team (SLT). At the same time, we set targets to improve senior representation of those who identify as Black, Asian and minority ethnic (BAME) people, as part of our continued commitment to ethnic diversity and progression.
We are aware that the term 'BAME' is being considered throughout society. As an organisation, we are actively considering the future use of this term and possible alternatives.
Our targets for female representation were for 45% of our Senior Leadership Team (SLT) to identify as female by 2020 (our interim target), and 50% by 2025 (our ultimate target). At 12 March 2021, 43% of our SLT identifies as female, which is up from 40% in 2020. The figure without including the Payment Systems Regulator (PSR) is also 43%, in 2020 it was 40%.
Our BAME targets were for 8% of our SLT to identify as BAME by 2020 (our interim target), and 13% by 2025 (our ultimate target). At 12 March 2021, 13% of our SLT identifies as BAME. This has increased from 10% in 2020. The figure without including the Payments Systems Regulator (PSR) is 13%, in 2020 it was 11%. We were pleased to have exceeded our interim 2020 ethnicity target. But we must keep a continued focus as we still have much work to do in this space, as set out in our ethnicity action plan.
Reaching our interim 2020 gender target was always going to be challenging. While we are taking positive action, we do not have a high turnover or large number of new positions at SLT level. As a result, we were unable to achieve enough positive changes to reach the 45% interim gender target.
Additionally, our SLT is a relatively small group so slight changes can make a big impact. However, our recently announced Executive Director appointments have improved our representation; we have female leaders in our frontline authorisation and supervision roles, and in operations, data and technology. We focused on having diverse shortlists when identifying the best candidates for these roles. It is important to lead by example, and our new appointments will mean 9 of our 18 Board or Executive Committee members will be women.
Our updated targets
We committed to expanding our gender and ethnicity targets beyond our SLT level – introducing targets at Manager, Technical Specialist and Senior Associate level. Improving our mix in these levels is key, not least because these roles are the pipeline for our future senior leadership, and setting these targets ensures we drive positive change and are held accountable for our progress. We also committed to reviewing our ethnicity target at SLT level.
Using detailed data analysis, we took a robust approach to setting these targets. In considering our gender target, it’s clear that we should be aiming for a 50:50 mix, given societal representation. However, there is a less explicit benchmark of what a ‘good’ target looks like in relation to ethnicity. A number of factors had to be considered, including our current representation and trend in progress, and balancing the fact we are a UK regulator representing consumers across the UK with the fact our hiring is predominantly centred around London and the South East due to the location of our head office, as well as considering the impact of our future approach of hybrid working.
The tables below indicate our newly agreed ethnicity and gender targets, and our position against these targets at 12 March 2021:
|Representation of women|
|Progress at March 2021||Target for 2025|
|Senior Leadership Team (SLT)||43%||50%|
|Progress at March 2021||Target for 2025|
|Senior Leadership Team (SLT)||13%||20%|
We have increased our 2025 SLT ethnicity target from 13 to 20% and introduced stretching gender and ethnicity targets across our senior associate, technical specialist and manager grades.
Within our ethnicity action plan, we have highlighted the need for more granular data to allow us to better understand our issues and be more targeted in our action – we are aware that the lived experiences of those of different ethnicities varies widely. The murder of George Floyd, in May 2020, marked a step change in discussions on race across the financial services industry. In particular, there is a lack of black people across senior roles in financial services, and there is a strong business case for improving diversity and inclusion at senior levels, with black inclusion being an important part of that.
We have seen better progress within our BAME SLT representation data than we have for those who identify as Black. Therefore, in complementing our latest aspirations to increase ethnic diversity at our SLT level to 20%, we also commit to increasing Black representation at SLT level, targeting 4% SLT Black representation, within that target, by 2025. We will continue to seek opportunities to use more granular data for targeted action, moving forwards.