Banks in UK warned over failure to take diversity seriously
Senior managers in financial services could lose their jobs, watchdog warns
London: Senior managers in financial services could lose their jobs if they fail to tackle bullying, homophobia and other unacceptable conduct in the workplace, Britain’ Financial Conduct Authority said on Wednesday.
Under FCA rules, people must be deemed “fit and proper” to work in the finance industry in Britain, but this requirement also encompasses a broader view of workplace conduct, the watchdog warned.
Christopher Woolard, the FCA executive director for strategy and competition, said the watchdog and financial firms had already identified individuals as not “fit and proper” because they had not taken this broader definition seriously.
“The result being that they were unable to take up or continue in their role,” Woolard said in a speech.
“In our judgement, the way a senior manager approaches issues around diversity may be relevant to our assessment of their competence and character.” The FCA received its highest number of disclosures from whistle-blowers after its director for supervision, Megan Butler, warned financial firms in May about failing to tackle sexual harassment.
The disclosures related to racism, physical bullying and homophobia, as well as issues around gender, Woolard said.
Currently only 15 per cent of directors and 6.5 per cent of chief executives at firms regulated by the FCA are women.
Woolard said that cultivating a diverse and vocal workforce was not just a question of mitigating the risk of groupthink, it was also potentially a competitive advantage to organisations and core to having the right company culture.
“That’s why we plan to explore the relationship between diversity and firm behaviour, including misconduct, to understand if there is a link between the two.” Lorraine Johnston, regulatory counsel at law firm Ashurst, said the FCA was putting this so-called “non-financial” misconduct on the same footing as traditional financial misconduct such as market abuse or insider dealing.
“Bad behaviour, in whatever form, is exactly what the FCA is looking to stamp out in its conduct risk agenda,” Johnston said.