Blog

Introduction

In today's global business landscape, diversity and inclusion have become essential pillars for organisations striving to create a more equitable and representative workplace.

Today, we bring you exciting news regarding the ongoing journey towards diversity and inclusion in the financial sector. The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have released a noteworthy update on the CP23/20 consultation paper, signalling their unwavering commitment to promoting diversity and inclusion within the industry.

Understanding CP23/20

Before diving into the latest update, let's recap what CP23/20 entails. The original consultation paper introduced a series of proposals aimed at strengthening diversity and inclusion practices within financial firms. Its key highlights included enhanced accountability, improved transparency, assessment of board effectiveness, linking diversity to performance, and advocating for whistleblowing mechanisms to address diversity-related issues.

Key highlights of CP23/20

The PRA and FCA have been diligently gathering feedback and insights from industry stakeholders and today's update reflects a proactive response to the industry's input and reinforces the regulators' dedication to fostering an inclusive and equitable financial sector. 

Here's what's new:

1. Enhanced Reporting Requirements: The updated CP23/20 introduces more detailed reporting requirements. Financial firms will be expected to provide comprehensive data on their diversity and inclusion efforts, making it easier for regulators and stakeholders to evaluate progress.

2. Expanded Definition of Diversity: Recognising that diversity extends beyond gender and ethnicity, the update broadens the definition of diversity to encompass various characteristics, such as age, disability, sexual orientation, and socio-economic background.

3. Inclusive Leadership Assessment: The update emphasises the importance of inclusive leadership within organisations. It calls for assessments of leadership teams' commitment to diversity and inclusion, ensuring that these values are embedded at the highest levels.

4. Promotion of Employee Networks: CP23/20 encourages financial firms to actively support and promote employee networks that foster diversity and inclusion. These networks can play a pivotal role in creating an inclusive workplace culture.

5. Emphasis on Non-Executive Directors (NEDs): The update underscores the significance of NEDs in driving diversity and inclusion efforts. 

Why this update matters

The continued evolution of CP23/20 signifies a growing understanding of the benefits of diversity and inclusion in the financial sector. Beyond compliance, embracing these principles can lead to improved business performance, innovation, and stakeholder trust.

This latest update reaffirms the regulators’ commitment to promoting diversity and inclusion within the financial industry. It reflects an industry-wide recognition that diversity is not merely a compliance requirement but also a strategic imperative for long-term success. Financial firms that embrace and champion diversity and inclusion will not only meet regulatory expectations but will also position themselves as leaders in an increasingly diverse and competitive marketplace. As this journey progresses, staying informed and proactive in implementing diversity and inclusion initiatives will be pivotal for financial institutions aiming to shape a more inclusive and equitable financial world.

How can we help you? 

Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

Are you looking for help with your diversity and inclusion arrangements , or more general regulatory questions? Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.