UK ups its game towards DEI, plots upgrade to insurer rulebooks
The UK’s top regulatory bodies are joining forces to craft new DEI rules to accelerate attempts to “support healthy work cultures, reduce groupthink and unlock talent”.
“Increased diversity and inclusion in regulated financial services firms can deliver better internal governance, decision making and risk management,” the FCA wrote in launching consultation papers on DEI together with the PRA.
Non-financial misconduct will work its way deeper into conduct rules, fit and proper assessments and even the threshold conditions which firms must satisfy to be authorized, the FCA document notes.
Larger firms would be required to develop an evidence-based D&I strategy, a step up from more meandering policies published to date, with publicly disclosed targets, an action plan, a study of the lay of the land towards enactment and board-level oversight.
Firms would be expected to set targets for women and ethnicity at a minimum, according to the PRA version. The PRA may oppose board room build-outs designed just to meet DEI goals.
Data reporting requirements would be upped and standardised, covering major metrics at the level of the executive board, senior management and full staff. Results of inclusion surveys would also be required, proposals show. The first reporting deadline would come one year after new rules are approved.
The FCA held back from proscriptive rules on oversight structures, remuneration rules and the like in its proposal set. The PRA opts for senior-level supervision with individual accountability.
The consultation is open until 18 December 2023. The regulators welcome comments on the proposed approach taken and the feedback will be used to develop final rules planned for publication in 2024.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
