The Financial Conduct Authority occupies a unique position in financial services by being both a regulator and an employer.
So it is not enough just to focus internally and decide to have a diversity and inclusion policy.
The regulator has to set an example, and show by that example how other companies in the financial services should conduct themselves.
It is the role of Georgina Philippou, chief operating officer at the FCA, to achieve that, and to do so she chairs numerous committees, including the executive diversity committee, which sets internal D&I strategy, as well as leads by her own example.
She says: “We are a regulator. If you look at all the work we do – the Senior Managers and Certification Regime, threshold conditions, and conduct rules – you will see that culture runs through that, and an important part of that is integrity, and an important part of that is diversity and inclusion.
“There’s only one financial services regulator, and the power that we have is not just in terms of formal regulatory powers in taking disciplinary action, but also the power that we have as an employer.
“It’s important to lead by example, particularly as we’re going to go externally and talk to firms about D&I in the context of their cultures.”
Looking internally, the FCA has a number of targets for diversity on their senior leadership team.
Their targets are that 45 per cent of the team identify as women by 2020, and 8 per cent of the team identify as being from a black, Asian or minority ethnic background by 2020; by 2025, they hope those figures will reach 50 per cent and 13 per cent respectively.
As of September 2019, the SLT was 41 per cent female, and 9 per cent BAME, although across the wider organisation, it is about 50 per cent female and 28 per cent BAME.
Why are the targets for BAME at senior level so low?
She says: “We want to set something that’s ambitious; we want to do the job well but we didn’t want to set impossible targets, because it would lead to very bad behaviours.
“We set something that’s ambitious and doing something that’s hard, and more closely represents the population of the UK.”
In fact the FCA, which has just published a paper on the importance of diversity and culture in financial services, has some interesting innovations in terms of bringing people from a diverse background through the organisation.
For example, the regulator is experimenting with diverse recruitment panels when hiring for a new role or a promotion, even if thatmeans bringing in more junior people, who will necessarily receive the right training.
And the FCA has a programme for more junior people, especially those from a BAME background, to “reverse mentor” a senior colleague.
All of the senior leadership team are “encouraged” to have such a sponsor, and many of them do, including Ms Philippou. She says: “My conversations have opened my eyes to his lived experience, and the challenges that he’s had.