We’ve responded to two separate ‘diversity and inclusion’ consultations, one run by the Financial Conduct Authority (FCA), which is responsible for the conduct of around 45,000 businesses in the UK, the other run by the Prudential Regulatory Authority (PRA), which regulates around 1,500 banks, building societies, credit unions and insurers.
Our response to the FCA consultation has been submitted via its online portal, but you can read the letter we sent to the PRA by clicking here.
The FCA is proposing that large firms should treat a “lack of diversity and inclusion” as a “non-financial risk” which must be “treated appropriately within the firm’s governance structures”.
We’re concerned that one of the most obvious ways for regulated firms to comply with this new requirement – should it come into force – would be to embed politically contentious diversity and inclusion policies deeper into their businesses, which will have a chilling effect on the free speech of those who disagree with the ideology underpinning those policies.
Approximately one-in-20 of the 2,250+ cases the FSU has taken on since it was set up in 2020 relate to inclusion and diversity training schemes in the workplace. What we’ve found is that these schemes are often delivered by unregulated external providers that tell staff the only reason minorities are under-represented in senior staff positions and don’t earn as much as their heterosexual white male colleagues is because of ‘racism’, ‘sexism’, ‘homophobia’, ‘transphobia’, ‘unconscious bias’, etc., as if this was an uncontested fact rather than a controversial analysis rooted in critical social justice ideology.
Of the 100+ such cases we’ve been involved with that have reached a conclusion, we’ve prevailed 73% of the time, which underlines just how problematic these policies are, often based on a misunderstanding of what the firm’s legal duties are under equalities law.
We’ve made this point in our response to the PRA’s consultation.
While we agree with the regulator that “a combination of demographic diversity and diversity of experience are likely to foster greater diversity of thought in firms and help reduce groupthink”, we don’t share its confidence that ‘anti-racism training’ and ‘unconscious bias training’ are likely to tackle the problem of groupthink. As our own research reveals (here, here and here), rather than promoting and celebrating diversity of thought, these schemes appear to form part of a disturbing trend towards forcing employees (and, increasingly, customers) into silence if they dare to go against what has become a progressive monoculture in the financial services sector.
We conclude both submissions by pointing out that there are less divisive approaches to diversity and inclusion available in the wider marketplace, and indicate our willingness to work with the FCA and the PRA in any future audit of the diversity and inclusion industry.
The FCA and PRA have both now indicated that they will review the feedback and develop final regulatory requirements for publication later this year.
