Finance

City must ‘own the bad numbers’ on ethnic diversity and start talking about action

The City must “own” its bad record on ethnicity and start talking about how to boost representation, according to a leading diversity campaigner.

“As an industry we love numbers. We feel very secure in data, we like to collect it, we like to look at it,” said City Hive chief executive Bev Shah.

The former Aviva and HSBC fund manager said that financial services firms should “own the bad numbers because actually no one’s doing brilliantly,” but then move on to what actions would help address the sector’s ethnicity gap.

“When we’re looking at performance, if the numbers aren’t looking great, what we tend to do is look at the process, the qualitative side of things,” she said. “You’re probably in good company but then talk about the things that you are doing.”

Speaking at the Diversity Project’s ‘Reset4Inclusion’ event on 24 November, Shah’s comments come as firms across the financial services sector face increased scrutiny on their diversity and inclusion initiatives, from both a regulatory perspective and from consumers and employees as environmental, social and governance issues take centre-stage.

Shah, who is co-lead of the Diversity Project’s race and ethnicity workstream, was responding to an audience poll, which showed that the majority felt one of the main barriers to data collection on ethnicity was “reputational risk due to lack of diverse workforce”.

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The Diversity Project counts 86 firms as members, mostly from the investment management industry. In June this year, it announced a new five-year plan, in which it set a target of a 90% ethnicity disclosure rate for the industry within two years.

Ethnicity data disclosure and pay gap reporting are not mandatory, and few organisations have taken steps to reveal these figures despite mounting pressure to do so following the 2020 Black Lives Matter protests.

The gender pay gap, however, has been mandatory since 2017 for companies with more than 250 employees in the UK.

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The Bank of England, the Financial Conduct Authority and the Prudential Regulation Authority published a set of policy recommendations in July, raising the prospect that firms could be required to link pay to metrics on diversity and inclusion in the future.

According to the Diversity Project, 1% of the fund management industry in London identifies as Black, and 10% identifies as Asian.

“[In the last five years] we’ve gone from probably a bit of a lukewarm sense of commitment to this whole idea of diversity and inclusion to genuine across-the-board commitment,” Baroness Helena Morrissey, chair of the Diversity Project, told the event.

“Commitment then goes into action and then action goes into results. And I think we’re sort of somewhere between the commitment and the action points at this stage.”

To contact the author of this story with feedback or news, email Bérengère Sim

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