The art of thinking independently together – why the regulator cares about diversity

Speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA, delivered at the LGBT in the Financial Services Industry Summit.

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Speaker: Christopher Woolard, Executive Director of Strategy and Competition
Location: LGBT in the Financial Services Industry Summit, London
Delivered on: 30 October 2017


  • True diversity is not tokenistic. It’s about a broad group of people bringing their broad range of experiences to the table.
  • This means better and more rounded judgements, which benefit us all, whoever you are.
  • As a regulator, our social contract rests on our ability to represent and reflect the consumers we are charged with protecting.
  • For firms, a diverse workplace leads to better decision-making, the ultimate safeguard against groupthink.


Note: this is the speech as drafted and may differ from delivered version.

It is an honour to be invited to speak here today.

I want to talk about how we think about inclusion at the FCA.

Both our experience as an employer – where I chair our Executive Diversity Committee - but also why this agenda matters to us as a regulator.

And along the way, I’ll say a little about why this issue matters to me personally.

I believe the concept behind inclusion in the workplace is really very simple.

People with different backgrounds, different points of reference and different experiences sharing their perspectives, enabling better – more well-rounded – decision-making that draws on the shared wisdom of a diverse group.

It’s about a culture which is powered by people of all shapes, sizes and backgrounds. Regardless of sexual orientation, age or belief.

What Malcolm Forbes of the eponymous magazine called: ‘the art of thinking independently together.’

And yet, whilst simple to say, the complexity of doing this in practice is huge.

A genuinely inclusive culture allows everyone to bring their whole self to work. But the obstacles hindering this are many. And they can seem daunting.

This is especially true for those who are LGBTQ.

That was brought home to me some around 15 years ago, when I was a new member of the senior civil service. I volunteered to chair my department’s first ever diversity committee. In fairness a lot of colleagues were encouraging but a number of quite traditional colleagues told me I was ‘brave’.

As aficionados of Yes Minister and The Thick of It know ‘brave’ in Whitehall roughly translates as foolhardy. A colleague eventually told me why – he and others thought the only reason why a white man would get seriously involved in diversity was because he was gay or bisexual. Volunteering was me outing myself.

Now, they were wrong but that’s not quite the point. The point is it tells you in a heartbeat about the daily working environment for gay men and women not that long ago in a place I’m pleased to say has changed massively for the better since.

Diversity: it can’t be tokenistic

So what does a genuinely inclusive culture mean in practice?

First, it can never be tokenistic - you can’t use a cookie cutter approach. Consider this scenario.

You have two men working on the same project – same school, same upbringing, same educational experiences. Will that combination produce diversity of thought? Maybe, but there are likely to be things you’re missing. 

What about if two women joined the team? Is that real diversity?

Not necessarily.

If those women went to a similar school, had a similar upbringing and similar education to the men, the fact that they are women may not be enough on its own to shift the thinking in the room. You don’t get diversity by employing the sisters of your existing board members, though in many cases sadly that would still be a start.

there’s a fundamental danger in any conversation about diversity that we don’t look beyond the immediate and simple metrics.

The point is that the independent thinking Malcolm Forbes talked about is not necessarily achieved by tokenism or a so-called ‘Noah’s ark’ approach: thinking the job is done if you have a particular percentage of female or black, Asian, and minority ethnic (BAME) or LGBTQ or disabled employees of certain ages or certain social backgrounds.

Real diversity is about a broad group of people bringing their broad range of experiences to the table; experiences which cause them to ask different questions, consider an issue from a different angle or raise doubts that would otherwise never be considered. Critically for us as a regulator this is about better and more rounded judgements.

Yes, targets can help focus attention. And sometimes diversity and inclusion can only be measured by talking about the numbers of staff we have in terms of gender and BAME.

But there’s a fundamental danger in any conversation about diversity that we don’t look beyond the immediate and simple metrics. That can be hard to do, we like easy labels. And a lack of them can make people uncomfortable or confused. 

We shouldn’t be surprised by that. The central core of our brain that kept our ancestors safe by identifying sabre tooth tigers is still processing our reaction to everything around us in a split second, not engaging in complexity. All of us carry our unconscious bias.

Why am I involved?

If I may, let’s tackle a couple of those biases now. Standing here in front of you today, I’m pretty sure I’m not the first person you would expect to be taking up the issue of diversity in financial services. So why am I here?

I like to say I cared about diversity and inclusion long before it became the focus of attention in our workplaces – and indeed society as a whole. Growing up in the 70s my grandfather, who was a wonderful, talented man, used a wheelchair. If you wanted a masterclass in casual prejudice you just had to stick around him for a while and see how many people saw the chair and not the man.

But if you want to put a label on me, maybe the best one is social mobility. One of the most powerful experiences I had was as a newly minted graduate. Hard as it is to believe, for a while I appeared as a poster child. My graduate action learning set was chosen as the face of my employer – two white people, two BAME people, two men, two women. At events I was the mildly embarrassing non-diverse white male, yet of us four I was the only one to attend state school, grow up on a council estate and not be Oxbridge. The reality was we were all diverse in our own ways. But it was an unusual introduction to the feeling in your gut of standing in a room where there is an ‘in group’ and you aren’t really part of it. The simple truth is none of us should be a bystander. And I believe that if you’ve ever had that feeling of being the one who is excluded, you have a responsibility to do something about it for others.

The other label is I occasionally get a knowing look when talking about gender. ‘Ah, ha, you are a convert to the cause, you have daughters’ someone will say. Well yes, I absolutely want my two daughters to be able to go into a workplace where they are treated with respect and as equals. I think it is profoundly shocking that still today my ExCo colleagues can attend an industry meeting and find themselves as the only senior women in the room. Or frankly when I do and there are no senior women.

But I also want that equality for my son when he goes to work. I want those who manage him and make decisions about his future to have the kind of balanced judgement I talked about a few moments ago. The workplace that is going to be right for his sisters is also going to be right for him.

The price of not bringing yourself to work

But that balanced judgement is a hard thing for us flawed humans to achieve. It takes concentration, deliberate thought, and use of the most cognitively expensive part of the brain.

My colleague Julia Hoggett, who is director of market oversight at the FCA, talks about her experience as a gay woman in investment banking and the sheer exhaustion of speaking about her partner in a gender neutral manner before she came out. She challenged some of us to try doing that for a day. Try it. See how you go. Then imagine doing that for months and months.

I’ve had BAME colleagues say when they come to work they feel they have to ‘act white’. That’s an incredibly powerful statement.

And a huge waste of brain power, a waste of time and a waste of talent.

At the FCA we take the view that if you can’t bring your whole self to work, or feel comfortable that you can, then that is going to be a barrier to being at your best.

The FCA’s approach 

So what do we at the FCA do about this inside our organisation? The short answer is a lot. I’ll start, given today’s conference, with some examples from our work with LGBTQ colleagues.

First, we start from the top. From our creation the FCA has been a signatory to the No Bystanders pledge. On his first day in the job, Andrew Bailey, accompanied by the whole ExCo, walked into the staff canteen at lunchtime and we all re-signed the pledge.

Second, we promote role models. I’ve already mentioned Julia Hoggett, but we have a number of colleagues who provide a clear example to others. Asking our people to believe our policies is one thing. But without a visible role model, you are asking them to believe in something they have never seen – that may not even exist in their eyes. That is quite the leap of faith.

if you want true inclusion you can’t think about one group at the expense of others.

Third, we take the approach there is no silver bullet. Our commitment is made in repeated small actions. So we do as much as we can to imbed things so they become BAU. We support Pride in London and Edinburgh, with more colleagues taking part every year. We have an active staff association for LGBTQ colleagues, Inside Out. And, believing in the importance of straight allies, we have a group called Friends of Inside Out. These people, including myself, show their support by displaying a simple blue tag on their desk.

These efforts are bearing fruit.

For three consecutive years, the FCA has been recognised as one of Stonewall’s top hundred LGBT-friendly places to work.

But there’s always more we could be doing.

We believe that if you want true inclusion you can’t think about one group at the expense of others.

For example, being signatories of the Women in Finance Charter and having a significant number of senior women leaders has inspired commitments to increasing the number of senior staff from a BAME background, where we need to improve representation if we are to better reflect the society we serve.

Signatories to the Charter, including ourselves, commit to taking practical steps to build a more balanced and fair financial services industry. This includes setting ambitious targets, which are embedded in the performance objectives of all senior leaders.

Our targets set the aim that 45% of our senior leadership team identify as female by 2020 and 50% by 2025. We also set a target of 8% of our SLT to identify as BAME by 2020 and 13% by 2025. Those are tough and require commitment. Our early progress towards these are not what we would have wanted, but we remain committed and are beginning to see promising signs.

In our social mobility work we are thinking how we can use our apprentice programme to offer a real alternative to our graduate recruitment track. We are very conscious, for example, of the fact that the group least likely to attend university in the U.K. today are white, working class boys. I spoke to our new intake of apprentices recently who were an amazing, inspiring and diverse group in terms of race, gender and life experience. 

Regulatory views on diversity and inclusion

We believe there’s a good business case for our approach in terms of our people. There is a real payback for recruitment and retention. In fact, our people survey results show that what makes us an Employer of Choice for many is our focus on diversity and inclusion. This is our highest score at 83%.

diversity and inclusion isn’t just an issue of moral conscience – it’s an absolutely vital part of our social contract with the public.

But this isn’t just about the environment we create for our colleagues.

There is another, equally important, motivation.

For the FCA as a regulator, diversity and inclusion isn’t just an issue of moral conscience – it’s an absolutely vital part of our social contract with the public.

We represent the interests of consumers across the UK. These are not one homogenous mass of financial service users – they are utterly diverse, with differing needs, differing priorities and differing levels of financial education and ability.

How can we possibly represent these consumers if the people who make the decisions that affect them – us – don’t understand that breadth of experience?

In order to be truly effective, we have to reflect the society we serve. As insightful and broad minded as we all like to think we are our outlooks and perspectives are limited by our own experiences.

So we have to have diverse voices around the table. It is central to our ability to provide public value.

The same is also true of the firms we regulate.

diversity is the agent of good judgement.

Time and time again studies show that the inclusion of a diverse range of voices improves performance.

If you don’t believe me, take a look at the academic evidence.

A few years ago, Harvard Business Review published research that showed that if a group includes more women, its collective intelligence rises.

A study by investment research firm MSCI found that companies with low gender diversity suffered 24% more governance-related controversies than average.

And analysis by McKinsey showed that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.

But this isn’t just theory – we see it playing out in the real world all the time. Consider the Volkswagen emissions scandal for example. When experts started looking into the company following revelations around the use of ‘defeat devices’ to reduce emissions in lab tests, they found a conspicuous absence of diversity on the supervisory board, with 17 of the 20 members either German or Austrian, and older, male voices predominating.

We can also see the pernicious impact of groupthink in the scandals that have plagued our own industry. Who knows what turn events would have taken if there were more people asking questions and providing challenge when it came to FX trading or the setting of the Libor rate?

As the FCA we are trying to deliver a clear message, including from our supervisors, most recently my colleague Megan Butler. Diversity is about making better decisions for the benefit of the businesses that we work within. Diversity of thought will encourage better decision-making in the interests of a firm.

In other words, critical thinking doesn’t happen in a vacuum. And diversity is the agent of good judgement.


I hope I’ve been able to give a sense of why inclusion matters to us as a regulator:

Because it is not a minority issue.

Because we see it as central to our ability to perform our role effectively.

Because when our colleagues feel they can bring their whole selves to work we are all better for it.

Ultimately I hope that Forbes’ art of ‘art of thinking independently together’ will be the modus operandi across the financial ecosystem.

And that accepting the importance of diversity and inclusion won’t seem like a ‘brave’ move, but a completely conventional one.