FCA CP23/20

Our response to the FCA’s consultation on Diversity and Inclusion, CP23/20

About us

‘SEEN in the City’ (SITC) is a network of people who work in the financial services sector and advocate for rights and protections that relate to sex. SEEN is an acronym for Sex Equality & Equity Network. Our aims include promoting and supporting sex equality and equity between women and men in our workplaces. Although much of our work is focused on addressing inequalities for women including lesbians, we are not a women-only network and include both women and men.

Our members span a range of larger and smaller firms including retail banks, investment banks, insurance companies, brokerages, law firms and regulators covering a range of roles, specialisms and differing levels of seniority. We are a national network covering all of the UK and have members in a range of locations.

Executive Summary

The focus of SITC is predominantly on sex equality however, we also support the principles of inclusion more broadly and the benefits of diversity. We also agree that Diversity and Inclusion (D&I) initiatives need to be evidence-based and we therefore support in principle, the collection and reporting of data on key demographic metrics.

However, whilst we welcome the FCA’s focus on this topic, we have a number of serious concerns with the proposals. Not surprisingly, our key concern is that there is no requirement for firms to collect sex data. Whilst some barriers to entering the sector remain (including the sector’s reputation), the real issue is that the sector has not done enough to tackle the culture that women encounter once they enter the sector, which results in a lack of equal opportunity for progression, coupled with high levels of female attrition.

One barrier to female progression is that women are still more likely to take time out of their careers for children, and to bear an unequal share of the burden of managing family and caring responsibilities alongside working. This is often cited as a reason that women are underrepresented in leadership positions. We believe that women are often unfairly held back as a result of pregnancy, maternity leave and caring responsibilities. However, we also believe that this is not the only issue or even the primary issue. There are other fundamental structural challenges faced by women which have not been fully recognised and addressed. It is therefore vital that accurate data on sex in particular is collected by firms and that other metrics can be disaggregated by sex to understand inequalities between women and men.
​
Other aspects of the proposals we strongly disagree with are summarised below with further explanation provided in our responses to selected questions. Our key concerns:

• No requirement for firms to collect sex data (can choose sex or ‘gender’ as per PS 22/3 Listing Rules).
• Despite a range of voluntary reporting metrics, no proposal to include a suitable metric on pregnancy and maternity (replaced by sex-neutral metric on parenting responsibilities).
• Inadequate drafting proposed to enact the proposals in the FCA Handbook. The drafting is unclear, open to misinterpretation and risks resulting in unfair outcomes.
• Further, the FCA is arguably overstepping its role and going beyond its expertise in seeking to impose rules that are more onerous and/or different than existing equality law.

Responses

We have answered questions 4, 5, 7, 8 and 10 to 17 of the CP below.

4. To what extent do you agree with our definitions of the terms specified?

STRONGLY DISAGREE

It is vital that key definitions within regulation are clearly defined for fairness of application, transparency and buy-in. In that regard, we strongly disagree with the proposed definition of the terms “Discriminatory Practices” which introduces ambiguity and materially departs from the approach in the Equality Act 2010. The CP proposes that “Discriminatory Practices” are defined as follows:

Discriminatory Practices include discrimination against, the harassment or victimisation of, a person or group due to their demographic characteristics, where these behaviours would be a breach of the Equality Act 2010 if they related to protected characteristics.

• The term “demographic characteristics” within the definition of discriminatory practices is not defined. The purpose of definitions is to ensure clarity. Accordingly, and bearing in mind that discrimination and harassment can be unintentional and that under the proposals there are the potential career consequences of an individual being found responsible for discriminatory practices, this ambiguity is a cause for concern. We note that the Equality Act 2010, the key legislation in respect of discrimination, is a complex and finely balanced piece of legislation that protects people from unfair discrimination at work and in wider society on the basis of nine protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. Each protected characteristic is clearly defined in the statute[1] and is well understood. By contrast “demographic characteristics” is not a term of art and will introduce considerable ambiguity.
• For example, it is unclear what demographic characteristics would be included or excluded in assessing discrimination or how these characteristics are defined. While the FCA appears to believe that “demographic characteristics” has an ordinary dictionary definition, we do not agree that this is the case or that there is a generally accepted term. The definition will therefore make it very difficult for firms to fairly assess whether conduct amounts to a breach.
• It may be that the FCA intends demographic characteristics to include socioeconomic status. If that is the case, then it should be tightly defined.
• The definition can also be interpreted as excluding some of the protected characteristics within the Equality Act 2010 that do not relate to demographic characteristics such as marriage and civil partnership, and religion or belief. We note that beliefs are an important aspect of diversity of thought (a key aim of the proposals). Accordingly, these must not be disregarded or downgraded.
• We consider it is not appropriate to go beyond the clear set of protected characteristics enshrined by Parliament in the Equality Act. Putting this definition into the FCA handbook and the impact this will have on firms and employees is likely to lead to uncertainty, and accordingly runs counter to the proposed CP outcomes and the objectives of the FCA:

CP Outcome/Objective	Issue
​A healthy culture	A healthy culture will not be created in an environment where the rules are not clear, well-understood and fairly applied.
Reduced groupthink	Focus on demographic characteristics will not in and of itself reduce groupthink particularly where other characteristics are ​suppressed or overlooked.
New talent unlocked	There is an issue with retention of talented women who leave the workplace in 30s and 40s and are the largest underrepresented group. This is not addressed by the proposed definition.  Sex is already protected in law but undermined by ​the proposals in general (see our response to question 10).
Greater understanding of & provision for diverse consumer needs	This objective is better met by monitoring customer outcomes and products. The FCA proposals do not represent all groups and ​therefore cannot support needs of all consumers in any case.

FCA Objective	Issue
Protecting consumers ​	The proposals will not result in reduced groupthink (leading to better protection for consumers) commensurate to the additional burden of the proposals and the risks and ​unintended consequences they introduce. ​
Enhancing market integrity ​	Unclear/poorly drafted regulation will not support integrity ​of markets.
Promoting competition / ​Secondary international competitiveness & growth objective	​It is difficult for firms to operate in a regime where the rules are​ unclear or ripe for exploitation.

5. To what extent do you agree with our proposals to expand the coverage of non-financial misconduct in FIT, COCON and COND

STRONGLY DISAGREE

We agree that non-financial misconduct should be addressed in FIT, COCON and COND and recognise the need for the FCA to effectively reverse the Frensham outcome. However, we have very material concerns about the FCA’s proposals and consider that the draft handbook text in Appendix 1 is not fit for purpose and will not achieve the consultation aims. We provide comments on sections COCON, COND and FIT below and a table setting out our issues versus the objectives of the CP/FCA.

Code of Conduct (COCON)

• We agree with the sentiments of 4.1.1BG and 4.1.1CG and the reference to a good working environment. However, we have material concerns as to how this will be determined in practice. 4.1.1DG lists factors the FCA would “take into account” in determining the misconduct. Conduct rules need to be clear, transparent and unambiguous. This is particularly important in relation to areas of non-financial misconduct where feelings and subjectivity more readily come into play. The FCA’s proposed list of factors provides some assistance, but we consider that even with these factors, there will be considerable ambiguity and uncertainty for firms and individuals. It is our view that conduct toward colleagues should not be regarded as misconduct unless it amounts to:
  • harassment or victimisation within the meaning of the Equality Act and in respect of the characteristics protected by the Equality Act;    
  • harassment within the meaning of the Protection from Harassment Act;
  • bullying within the definition provided by ACAS; or      
  • the commission of a criminal offence.
• However, the proposals effectively introduce into the Conduct Rules at 1.1.7FR a definition of harassment that goes beyond that in the Equality Act. The Equality Act defines harassment as conduct that relates to a protected characteristic and which “has the purpose or effect of violating another person’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for them”. The proposed COCON amendment starts with the same definition but also includes conduct that “is unreasonable and oppressive” or “humiliates, degrades or injures” the other person. It is unclear why the FCA has added these additional words, and particularly the reference to “unreasonable” conduct creates unnecessary ambiguity.  The Equality Act definition is longstanding, well understood, and has an established body of case law.  We strongly believe that it is not appropriate for the FCA to effectively introduce a new definition which is different to the Equality Act definition and which will create uncertainty and ambiguity for firms seeking to apply the definition, particularly in circumstances where a finding of harassment could have career ending consequences.
• The drafting also omits an important safeguard to interpretation in the Equality Act. The Equality Act provides that harassment will be unlawful if it has the prohibited effect even if that was unintentional, but states that when considering if the actions have that effect, account should be taken of the other person’s perception, the circumstances, and whether it is reasonable for the conduct to have that effect. This is designed to ensure a level of objectivity in the assessment. Again, it is unclear why this was omitted from the draft Conduct Rules.  As mentioned above, the draft COCON 4.1.1DG, does include a series of general factors for assessing misconduct in relation to colleagues, including whether the conduct is repeated, its duration, degree of impact and likelihood of damage to culture. It also considers relative seniority of those involved and whether the conduct would justify dismissal. These are also important safeguards but given there is a well-trodden path of existing case law addressing the Equality Act definition of harassment, it would seem more appropriate to limit the definition of harassment to that in the Equality Act and to include the guidance on determining whether it is reasonable for conduct to have had the effect complained of in addition to the proposed general factors. We do not think the wording regarding the conduct needing to be serious in order to be a breach mitigates these concerns.

Threshold Conditions (COND)

• As noted in response to question 4, we have concerns about the definition of discriminatory practices. Otherwise, we have no comments on the proposed amendments to COND.    

Fit and Proper test for Employees and Senior Personnel (FIT)

• The proposed amendments to FIT include a detailed explanation of why conduct outside of work may be relevant to suitability for a regulated role. We agree that dishonesty outside of work is always likely to be relevant to the fit and proper assessment. However, the amendments go on to say that conduct outside of work which does not involve “a breach of standards that are equivalent to those required under the regulatory system” may also be relevant to whether a person lacks “moral soundness, rectitude and steady adherence to an ethical code”. The amendments suggest this could be the case if conduct is “disgraceful or morally reprehensible or otherwise sufficiently serious.” While it is easy to see that violent, sexual or racially motivated conduct, or the commission of a criminal offence is relevant to fitness and propriety, terms such as “disgraceful” and “morally reprehensible” introduce a significant degree of ambiguity which will make it very difficult for firms to determine whether an individual remains fit and proper or to provide a regulatory reference.  That is particularly the case in the multi-cultural environment in which the financial services industry operates, where there may be cultural and other differences of view as to what is morally wrong. For example, some people oppose the use of legal pornography. Some Muslim people consider that drinking is morally reprehensible; some Christians consider that homosexuality or sex outside marriage are morally reprehensible. Given there is no generally accepted definition of what is immoral, our view is that the FCA should not be seeking to impose requirements in respect of this. We consider that the FCA’s objectives can be fully met by limiting non-financial misconduct committed outside of work to situations where the conduct is judged by the employer to amount to a criminal offence.   

​CP Outcome/objective	​Issue
​A healthy culture	A healthy culture will not be created in an environment where  ​the rules are not clear, well-understood and fairly applied.
Reduced groupthink	These proposals may increase groupthink, as employees may be  ​afraid of voicing dissenting views, concerned that any such view can be seen as misconduct.
New talent unlocked	The draft Handbook text may discourage new talent from  entering the profession particularly as the rules may limit lawful  behaviour in private life and/or be seen to be morally subjective.
​Greater understanding of & provision for diverse consumer needs	N/A

​FCA Objective	Issue
Protecting consumers ​	The proposals will not result in reduced groupthink (leading to better protection for consumers) commensurate to the additional burden of the proposals and the risks and ​unintended consequences they introduce. ​
Enhancing market integrity ​	Unclear/poorly drafted regulation will not support integrity  ​of markets.
Promoting competition / ​Secondary international competitiveness & growth objective	​It is difficult for firms to operate in a regime where the rules are ​ unclear or ripe for exploitation.

7. To what extent do you agree with our proposals on D&I strategies?

DISAGREE

Whilst we support the FCA’s focus on this area, we are concerned that mandating D&I strategies via regulation including what should be included therein is not appropriate at the current time. We believe the FCA should revisit this proposal in future when firmer data and evidence is available to link D&I initiatives with the desired outcomes. Otherwise, this may drive activity that has a cost burden but does not achieve the desired outcomes and therefore leads to a lack of public confidence in regulation in this area.

Our experience is that some firms have tried to address underrepresentation of certain groups including women and ethnic minorities through a range of initiatives such as training, policies and mentoring programmes. While these programmes can have positive benefits, the real test is whether they drive an inclusive culture in which women and other underrepresented groups thrive and progress. Regrettably, this is not the case. All too often programmes are well-intentioned, but fragmented, and do not tackle the fundamental structural issues that exist within the sector and do not achieve long-term culture change.  As such, they are perceived by many as window dressing and/or box ticking.  For example, while initiatives relating to menopause are well meaning, they do not address the underlying problems, or the fact that many women have left the sector by then. In addition, while we are not opposed to policies in this area these initiatives can increase stigma against older women so need to be introduced carefully. 

The view of our members is that the real barriers are cultural and structural and include inequality in allocation of work and opportunities, bias in the assessment of women and ethnic minorities, lack of transparency in promotion processes, lack of pay transparency, presenteeism and lack of recognition for the differing levels of contribution made by women and men to positive workplace behaviours.

Our experience is also that D&I resource and funding is under pressure, and as a result, there is less space or resource devoted to looking at the issues facing women or why existing initiatives have not worked.

Our starting point is that rather than devote resource to fragmented and eye-catching initiatives, league tables etc, firms need to apply an evidence-based approach to D&I. This should start with a better understanding of what is not working in their own organisations, at every point in the employee life cycle, in order to identify where the true challenges are, and develop a strategy to address them. Many firms measure simple metrics, such as diversity of senior management and the workforce as a whole but do not look in granular detail at where the problems lie in the employee life cycle.  Firms need to systematically collect and leverage the data to understand what is going on, not just on recruitment, but at every stage of decision making from intake to annual evaluation, pay and bonus, promotion, allocation of work and opportunities and through to leaver data. For example:

• Do women tend to score lower than men on certain evaluation criteria in the performance appraisal system or the promotion process? 
• Does the allocation of projects or client relationships opportunities tend to result in men having better, more high profile opportunities?
• If anomalies are identified, firms should then undertake a deeper dive to understand why – for example whether this relates to manager perceptions or another structural problem.

8. To what extent do you agree with our proposals on targets?

DISAGREE

The drive in listed companies to increase the representation of women and ethnic minorities at board level demonstrates the contribution that targets can make. However, we have concerns about the scope of the proposals. In particular:

• We think firms should limit themselves to aspirational targets in respect of the main protected characteristics which are measurably underrepresented compared to the general population. These are likely in most organisations to be sex, ethnicity and disability. 
• Targets should be set by reference to context including the population that the firm recruits from.
• We do not consider it sensible for firms to focus on targets in respect of characteristics where the population as a whole is small as this will dilute focus on key areas.

10. To what extent do you agree with the list of demographic characteristics we propose to include in our regulatory return?

STRONGLY DISAGREE

No requirement to collect sex data

• We are deeply concerned by the proposal that firms choose whether to collect and report on sex or gender. 
• In addition to being perhaps the most fundamental demographic variable, sex is also protected in the Equality Act 2010 and it is surprising that despite referencing the Equality Act 2010 in a number of places, this key protected characteristic, that underpins the assessment of how women are progressing in the workplace is not proposed as a mandatory field. One of the main reasons for lack of advancement of women is structural sexism. If data on sex is not collected, structural sexism cannot be measured and addressed.
• We therefore consider it vital that firms and regulators use the correct terminology and collect data on sex which is the relevant protected characteristic in the Equality Act 2010, and not on gender which is not a protected characteristic. The relevant protected characteristics for these purposes are sex and gender reassignment. The conflation of these two protected characteristics not only diminishes the value of the data, but also has the effect of introducing self-identification of gender.  SITC notes that the UK 2021 Census collected data on sex and gender identity separately. Indeed, the distinction between the two categories was considered sufficiently important by the UK Courts to justify granting permission for a judicial review of the Office for National Statistics’ (ONS) guidance on how to complete the Census, which appeared to permit participants to answer the sex question based on gender self ID.  The Court also made an interim order that the relevant part of the guidance be amended, following which the ONS agreed to change the guidance on a permanent basis.[2] We also suggest that it is unwise to cement new rules in this area whilst a government review into data collected by public bodies is underway.[3] We note that this review has been launched in response to the dereliction of duty by many institutions to properly collect data on sex.
• SITC also notes that many of those with “gender critical”[4] beliefs (which is itself a protected characteristic under the Equality Act) reject the concept of gender, believing that it is based on the imposition of stereotypes on each sex. Any requirement on or by firms to require those individuals to identify their gender is therefore potentially discriminatory.
• As part of diversity strategies, firms may wish to use the positive action provisions of the Equality Act. The ability to do so in respect of female recruitment and progression is dependent on having good quality data in respect of th
  e protected characteristic of sex.
• SITC further recommends that any FCA or other regulatory requirement to collect and provide data should not aggregate data on sex and gender.  First, under GDPR there is a clear basis for collecting data on sex, whereas that is not the case for gender which is arguably special category data.  Second, collecting data on a disaggregated basis in relation to each protected characteristic would ensure that firms and regulators have better quality data for the purposes of their policy and decision making. It would also ensure that regulators are able to comply with their public sector equality duty under the Equality Act 2010, which requires them to “advance equality of opportunity between people who share a protected characteristic and those who do not share it”. 
• A lack of sex-disaggregated data often leads to the needs of women being ignored. Women who variably experience periods, menopause, suffer endometriosis, suffer miscarriages, give birth, take time out on maternity leave, take on a larger share of caring responsibilities and domestic labour and are on average physically weaker and more vulnerable to predation and sexual assault than men. Even if none of these factors are relevant to a particular woman at work, the perception that they might be can cause discrimination and to monitor and tackle this we need accurate data on sex. As Caroline Criado Perez wrote in her book Invisible Women: Data bias in a world designed for men “when your big data is corrupted by big silences, the truths you get are half-truths, at best. And often, for women, they aren’t true at all.”
• We note that 5.52 of the CP says that most firms are already collecting sex data and as such requiring sex data would not create an additional burden.

Corruption of data on sexual orientation

• Without a clear sex field, data on sexual orientation will be corrupted. Sexual orientation is defined in law in relation to sex. However, if gender is asked for instead of sex which is permissible under the proposals, it may lead, for example, to a straight woman who identifies as male, being misclassified as a gay man and so on. Sexual orientation is a vital data variable that needs to be recorded accurately to ensure the needs of lesbian, gay and bisexual people are properly understood alongside any barriers to their successful participation and progression in the workplace.

Gender data erases women

• We note that in the excel template for the draft regulatory return, the gender field has options man/woman/non-binary/prefer to use another term. This implies ‘woman’ and ‘man’ are gender identity or self ID terms. This is a controversial stance and we do not support this given the implications for women’s rights. A woman is an adult human female, it is a sex-based term. This definition is important for the protection of the rights of women and girls, in particular for privacy, safety, dignity and fairness.

Gender identity data field inadequate

• The voluntary gender identity question in the excel template for the draft regulatory return is aligned to that asked in the 2021 Census. However, we note that this question has yielded unstable results[5]. The gender identity question posed by the FCA may be even less useful than that adopted in the census given that in the census it was asked alongside a mandatory sex question.  Here, a company may not ask sex in favour of gender (effectively gender identity) thus, data on how many males have a trans identity versus how many females will not be collected. We would support collecting data on gender identity as a voluntary field in addition to mandatory sex data but the question design set out in the template is inadequate and we note firms are likely to see the template as best practice.

No requirement to collect pregnancy and maternity data

• We do not agree to the proposed exclusion of a data field for pregnancy and maternity. This is fundamental to the structural reasons why women exit from “junior to mid roles” (5.21) and is distinct to parental or caring responsibilities. It is vital to recognise the additional burden placed on women in relation to reproduction of the species and how this impacts work and the needs of female consumers.
• We note comments by the PRA in CP18/23 as part of the joint consultation that pregnancy and maternity is a short-term state (circa 9 months) that does not allow statistical analysis. We do not accept this. Firms could for example track and report longer term outcomes such as time remaining in employment since return from maternity leave, whether the exit was voluntary, grade at exit and pay.  This data would yield potentially valuable information on the progression of women who have given birth versus other groups.
• We note further the suggestion to collect data on parental responsibilities as a more suitable long-term metric than pregnancy and maternity data. This does not capture the importance of maternal care and nurturing of babies e.g. breastfeeding and the toll this takes on a pregnant/post-partum women. This is important to capture and is a source of discrimination. We are also unconvinced that reporting on parental responsibility is helpful unless this is subdivided by sex, reflecting that typically the impact of parental responsibility on careers differs between men and women.
• It would also be helpful to understand the level or grade at which women become pregnant noting the pressure to put this off in certain careers where absence is seen as a detriment is a mental health burden on women.

Philosophical beliefs and politics excluded

• The excel template for the draft regulatory return excludes political views and philosophical beliefs which are an extremely important aspect of diversity in particular to meet the aim of avoiding groupthink. We note that philosophical beliefs are also included under the protected characteristic of religion and belief in the Equality Act so this template will encourage a further deviation from the law. Whilst there may be challenges to collecting data on beliefs, this has not been considered at all in the CP and some employees may wish to voluntarily provide this data.
• Furthermore, beliefs are an area where there is discrimination in society and preventing a discriminatory environment is important for healthy work cultures. Many of our members hold gender critical beliefs and there are a number of instances of members being discriminated against due to this as there is in wider society with a number of cases of discrimination proven at the employment tribunal[6] with others still to be heard/judged[7].  The fear experienced by women in relation to the hostility directed at them at work due to their ordinary views on sex and gender is a scourge that must be addressed.

​CP Outcome/objective	​Issue
​A healthy culture	Tackling structural sexism will be important for healthy workplace cultures. This is not supported by the proposals with no  ​requirement to collect sex data.
Reduced groupthink	Philosophical beliefs are an important aspect of diversity of  thought and avoiding groupthink. These are not included or  considered in the proposals. Data on pregnancy and maternity is  ​also important in this regard.
New talent unlocked	Without accurate sex data to enable understanding the barriers  ​faced by women, talent across both sexes will not be unlocked.
​Greater understanding of & provision for diverse consumer needs	Not requiring data on sex and pregnancy and maternity will not  enable understanding and meeting the needs of female  ​consumers.

​FCA Objective	Issue
Protecting consumers ​	The data fields proposed are flawed and will introduce potential  blind-spots which could lead to decisions or workplace  ​behaviours that put consumers at risk.     ​
Enhancing market integrity ​	Sound decision-making  (important for well-functioning markets)  relies on a range of skills and experiences which will not be fully  ​captured by the proposed data fields.
Promoting competition / ​Secondary international competitiveness & growth objective	The proposals are a missed opportunity to capture adequate data  on women in particular, and thus enhance competitiveness of the  ​sector with this improved knowledge..

11. To what extent do you agree that reporting should be mandatory for some demographic characteristics and voluntary for others?

AGREE

We agree that in principle some characteristics should be mandatory and others voluntary. In line with our response to question 8 on targets, our view is that the mandatory requirements should be limited to key demographic characteristics in particular sex, ethnicity and disability. 

12. Do you think reporting should instead be mandatory for all demographic characteristics?

No, see our response to question 11.

13. To what extent do you agree with the list of inclusion questions we propose to include in our regulatory return?

DISAGREE

We would support the proposed questions if they did not include the following:

• they are subject to treatment (for example actions or remarks) that had made them feel insulted or badly treated because of their personal characteristics

FCA state at 5.64 of the CP that the metrics have been devised through research on industry practice and material such as the FSSC Inclusion Measurement Guide.  However, we note that this metric in particular does not appear in the FSSC Inclusion Measurement Guide and we do not agree with the drafting.  It may be the intention that personal characteristics is intended to mean protected characteristics as set out in the Equality Act but this is not clear. Any question must be understandable to employees so there would either need to be direct reference to e.g. racial or sexual harassment or a simpler metric related to employees feeling included and accepted.

14. To what extent do you agree with our proposals on disclosure?

DISAGREE

In line with our response to Q11 on reporting, any requirements on disclosure should relate to key demographics only, in particular sex and ethnicity.

15. To what extent do you agree that disclosure should be mandatory for some demographic characteristics and voluntary for others?

AGREE

Please see our response to question 14.

16. Do you think disclosure should instead be mandatory for all demographic characteristics?

No, please see our response to question 14.

17. To what extent do you agree that a lack of D&I should be treated as a non-financial risk and addressed accordingly through a firm’s governance structures?

STRONGLY DISAGREE

We do not agree with adding drafting on this into the FCA Handbook as proposed at 29.6 of SYSC Senior Management Arrangements, Systems and Controls sourcebook:

• matters relating to diversity and inclusion are to be considered as a non-financial risk and treated accordingly by a firm’s relevant functions, including applicable operational and internal audit functions

Whilst we agree that lack of D&I is a non-financial risk, so is badly applied D&I, especially if this is embedded throughout a firm’s functions. We believe it should be up to the Board to decide the approach to managing this risk and any updates to the handbook should not be made at this time whilst there is limited evidence of the effectiveness of varying approaches.

[1] https://www.legislation.gov.uk/ukpga/2010/15/part/2/chapter/1
[2] UK gov’t concedes defeat to Fair Play For Women in census sex row | Reuters
[3] Gender data collected by public bodies set for review | UCL News – UCL – University College London
[4] Explanation of gender critical beliefs – Sex Matters
[5] Census records trans population in England and Wales – but accuracy is doubted | Transgender | The Guardian
[6] Denise Fahmy: Gender-critical woman wins harassment claim against Arts Council England | Arts Council England | The Guardian, Allison Bailey: Allison Bailey: Barrister awarded £22,000 after employer discriminated against her over gender critical views | The Independent and Maya Forstater: Maya Forstater: Woman gets payout for discrimination over trans tweets – BBC News
[7] Jo Phoenix: Harassed, silenced & compared to a racist for my gender critical views (crowdjustice.com), Rachel Meade: Social Work News (archive.ph) and James Esses: Expelled from my university course for holding gender critical views (crowdjustice.com)