LONDON -Senior managers at financial firms could see their pay linked to progress in making the workforce more diverse and inclusive, Britain’s financial regulators said in a discussion paper on Wednesday.
The Bank of England and Financial Conduct Authority said increased diversity and inclusion improved how companies were run and how decisions were taken, creating a more innovative industry that offers better products to consumers.
Bank of England Deputy Governor Sam Woods said more needed to be done to speed up progress in diversity and inclusion at financial firms he regulated.
“A lack of diversity of thought can lead to a lack of challenge to accepted views and ways of working, which risks compromising firms’ safety and soundness,” Woods said.
Regulators are considering whether companies should have a senior manager with specific responsibility for diversity and inclusion policies, making them accountable to regulators for their actions.
“Linking progress on diversity and inclusion to remuneration could be a key tool for driving accountability in firms and incentivise progress,” the discussion paper said.
The discussion paper is open to public consultation until Sept. 30 and a further consultation on detailed proposals will take place in the first quarter of 2022.