The City watchdog is set to probe renumeration policies and diversity at the largest firms it regulates in the wake of the coronavirus pandemic.
In a letter published on its website yesterday (July 22) the Financial Conduct Authority confirmed its supervisors would soon assess how the pay policies at some firms "drove good outcomes" and influenced diversity and inclusion within a business.
The regulator warned it was worried firms may "de-prioritise their focus on culture" as they redirected resources in response to immediate risks presented by the coronavirus crisis.
The FCA said: "But a continued focus on maintaining healthy cultures and driving the right behaviours during times of uncertainty can reduce the potential for harm, as well as make firms more resilient and contribute to long-term success.
"As important drivers of culture, firms’ remuneration and recognition practices remain areas of key importance to us as we continue to assess the extent to which firms’ approaches to rewarding and incentivising all staff promote healthy cultures and minimise harm."
Supervisors at the watchdog are also expected to assess what impact the coronavirus crisis may have had on bonus pool policies at the largest companies in the industry.
The regulator said it would continue to probe firms on whether their remuneration policies reinforced "healthy cultures...and promoted the right behaviours" in the current environment.
It added: "We expect you also to consider how your firm’s remuneration policies promote equality of opportunity and to ensure that diversity and inclusion is embedded within your firm’s approach to rewarding individuals, avoiding unconscious bias."
Last month the industry warned diversity and inclusion efforts must not take a back seat as companies grappled with different working practices brought about by the coronavirus crisis.
It followed a move earlier in the year by the Government Equalities Office, confirming employers would not be expected to report their gender pay gap data for the 2019-20 year as a result of the coronavirus pandemic.
Speaking at his first Treasury committee session yesterday incoming FCA boss Nikhil Rathi revealed plans to shake up diversity and culture within both the industry and at the regulator.
Mr Rathi warned there were "deep" diversity issues in the financial services industry and admitted there would likely be "challenges" at the FCA too.
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