DE&I View - March 2023
We are pleased to present the fourth DE&I View, keeping you updated with some key diversity and inclusion developments from the past three months.
1. Diversity in Financial Services
The FCA and PRA have announced that the eagerly awaited Consultation Paper on improving diversity and inclusion across the financial sector will be published between April and June this year. The Consultation Paper follows the Joint Discussion Paper published in July 2021 and will set out policy proposals. The announcement was made in the FCA’s latest Regulatory Initiatives Grid.
Separately, the PRA has published a letter dated 10 January 2023 setting out the priorities for the year for international banks active in the UK. Amongst other topics, D&I is highlighted as ‘an important focus’ that the PRA ‘expect(s) firms to continue to embed in their cultures’.
2. Gender recognition and identity
On 17 January 2023 the UK government blocked the the Gender Recognition Reform (Scotland) Bill from receiving Royal Assent, marking the first time this power has ever been used. Among other things, the Bill aimed to simplify the process for obtaining a gender recognition certificate by removing the requirement for a psychiatric diagnosis of gender dysphoria.
3. Women and financial boardrooms
Research published by EY in January 2023 shows that Europe’s largest financial services firms are taking proactive steps to increase female representation at boardroom level. According to reported figures, women made up 42% of seats in boardrooms among financial services firms as of January 2023, up from 37% in June 2022. The increase comes after 50% of board appointments over the last year were female. Within the financial services sector, banking and insurance firms showed the most improvement whilst wealth and asset managers made marginally negative progress.
4. The FTSE Women Leaders Review
In February 2023, the FTSE Women Leaders Review, an independent, business-led framework supported by the Government, which sets recommendations for Britain’s largest companies to improve the representation of women on boards and in leadership positions, released its annual report. According to reported figures FTSE 350 companies have met the 40% target for women on boards and leadership teams, three years ahead of the December 2025 deadline.
The FTSE Women Leaders Review, which replaced the former Hampton-Alexander review, also set a voluntary goal for companies to have a woman in at least one of four key positions: board chair, senior independent director (“SID”), chief executive and / or finance director. There has been growth in the number of women SiDs now at 38% this year and more progress in the Chair role, where almost one in five FTSE 350 Boards have a woman chair.
5. Gender pay gap
The TUC has published updated information on Women’s Pay Day – the day when it says the average woman stops working for free compared to the average man – and announced it was 23 February 2023. This means that the average woman effectively works for free for nearly two months of the year, and the gender pay gap stands at 14.9%.
6. Disability employment gap
Resolution Foundation has published a new report on living standards for working-age people with disabilities. Among other things, the report considers the gap in median household income between adults with disabilities and adults without and the fact that only 54% of adults with disabilities are in work, compared to 82% of adults without disabilities.
The report frames the significance of these figures in light of the ongoing cost of living crisis. People with disabilities are increasingly vulnerable to the impact of economic hardship, with 41 per cent of people with disabilities reporting that they could not afford to keep their home warm in November 2022, compared to 23 per cent of the non-disabled population.
7. Autonomy publishes results of the UK 4-day week pilot
UK think-tank, Autonomy, has published the results of their 4 day week pilot programme, conducted together with the UK’s non-profit organisation 4 Day Week Global and the 4 Day Week Campaign. Overall results have shown that an overwhelming 92% of participants will maintain their 4-day week arrangements, with 18 companies confirming this policy to be a permanent change.
8. Menopause and the workplace
On 24 January 2023, the government published its response to the Women and Equalities Committee’s (WEC) report ‘Menopause and the workplace’, as reported in our September 2022 edition of D&I View. This report followed a 2021 inquiry launched by the WEC and, amongst several other recommendations, called on government to urgently consult on making menopause a protected characteristic under the Equality Act 2010.
The government’s response rejects five of the Committee’s recommendations outright, including in relation to amending the Equality Act, warning of ‘unintended consequences which may inadvertently create new forms of discrimination, for example, discrimination risks towards men suffering from long-term medical conditions’. The WEC has criticised this response, noting that menopause is an inevitable part of life for many and not a form of long-term ill health.
Regarding the recommendations that have been accepted, such as appointing a Menopause Ambassador, government has come under criticism from the WEC for not actually committing to any new work or providing any timeframes in response to the report.
9. The Diversity Equity and Inclusion Report
eFinacialCareers partnered with The Cee-Suite to produce the Diversity, Equity and Inclusion Report 2023. According to reported figures, in the UK, 89% of senior roles are held by people from higher socio-economic backgrounds. The report summarises that efforts to improve representation has had little impact, as 57% of respondents to an eFinancialCareers poll said that their firm has made little to no recent progress in hiring candidates from underrepresented backgrounds.
The Report sets out ways to improve each stage of the recruitment journey, from employer branding to job offers. Amongst other things, the Report focuses on employer branding as a critical part of the recruitment process, as many candidates now review a company’s DEI efforts before deciding where to apply.
We loved hearing your feedback on our previous newsletters, so please do continue to let us know any additional areas you would like us to cover. For more information on any of the points covered please contact Fiona Bolton, Lauren Dickinson, or Emily Guthrie.
