Diversity and inclusion (D&I) exists to structure firms with the right mix of people to serve the complex and wide-ranging needs of the customer.
Diversity itself is a bit of a buzzword and for that reason, it can be hard to accurately define. It comes in many forms, including background, experience and, arguably most importantly, thinking. To that end the FCA have, in the diversity mandates, provided their definition of diversity and inclusion:
‘Diversity’ refers to diversity of thought and cognitive diversity. It is the bringing together of different styles of thinking among members of a group, brought about by different perspectives, abilities and/or demographic characteristics. ‘Inclusion’ is defined as providing equal access to opportunities and resources for marginalised or otherwise excluded individuals.
The FCA’s commitment to D&I means financial services firms need to adjust their thinking around diversity and inclusion and nurture talent from all backgrounds and experiences. This mindset change may cause a significant shift in structure and culture in more traditional firms, as senior leadership will be held accountable for misconduct resulting from poor D&I.
It is important, therefore, to understand and embrace D&I.
1. The need for effective collaboration will increase
It might seem obvious to suggest teamwork as a way to build inclusion, but good collaboration requires sound structure, oversight and buy-in. Led by senior management, improving D&I is ultimately an organisation-wide endeavour - one worth pursuing. Research has shown the benefits of diversity and inclusion, a McKinsey report published in May 2020 showing that ethnically diverse companies are 35% more likely to outperform those which are least diverse.
2. Better understanding & conscious inclusion
Firms with a pool of talent from different countries and heritages bring innovation and new ways of thinking due to different experiences and cultures. How this looks in reality will differ from firm to firm as D&I needs to be authentically instilled in order to achieve sustainable change. It is important to do this efficiently, pragmatically, and in line with the overall business strategy and vision.
This may be a challenge for some organisations expecting an overnight solution to a deep and layered culture shift. Investing in training to convey the importance of diversity and inclusion in the workplace is worthwhile, and employees must be provided a safe space and person to talk to should they ever experience any discrimination.
3. The benefits are there to be built on
An inclusive workplace values and appreciates different backgrounds, experiences, views and cultures. It provides employees with a dynamic company culture and firms with the opportunity to:
Access a broader pool of talent, by expanding recruitment to include candidates from all backgrounds
Improve engagement and trust between senior management and employees
Increase different ways of thinking and decision making
For more information on D&I, check our guide to Diversity & Inclusion in Financial Services.
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