The Financial Conduct Authority has recently released a paper that aims to improve diversity and inclusion in the workplace. The papers propose new rules that safeguard employees from bullying, sexual harassment, and discrimination. It can also improve outcomes for consumers and markets.
Having a diverse and inclusive culture in the workplace offers the opportunity for driving productivity and innovation, allowing for greater sharing of ideas and experiences across all levels of the business. In turn, these efforts can benefit both consumers and the wider market.
Along with the regulatory side of things, let’s take a closer look at why diversity and inclusion are important in the workplace:
- Healthy work cultures - In their 2021/2022 annual report, the FCA recognised that diversity and inclusion can improve engagement, job satisfaction and retention with employees. A diverse and healthy work culture helps to discourage inappropriate or discriminatory behaviour and provides the right environment for employees of all backgrounds to feel safe. It can also help break down unconscious biases and prejudiced views that some staff may have.
- Reduces groupthink - Groupthink can be a serious issue, especially if the decision-makers (such as the Board of Directors) consistently share the same opinions, are unprepared to challenge, or are unduly influenced by a dominant personality among their number. Groupthink can let deep-rooted views and behaviours carry on without intervention and as a result, reflects in the outcomes for consumers.
- Different perspectives - Diversity allows for wider perspectives to be considered. A team that has a range of characteristics and experiences is more advantageous than a team that shares similar backgrounds. For example, if a Board has input from people with different experiences, it is more likely to benefit when making decisions. There will likely be more encouragement for internal debates, with a willingness to speak out and challenge unethical behaviour.
- Unlocking talent - A workplace that promotes diversity and inclusion has access to a wider talent pool. Individuals from minority and underrepresented groups will be encouraged to work with a progressive business, and their diverse talents can be unlocked. This also equips firms with a better understanding of diverse consumer needs.
Creating changes that are meaningful and long-lasting so that everyone involved can feel the benefits is a sign of an inclusive work culture.
As a reminder, the FCA’s consultation closes on 18th December 2023 with a policy statement expected in 2024, and implementation 12 months after that.
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