Culture, Diversity and Inclusion – “Firms are nervous about the threats they face” FCA

Discussions about Equality, Diversity and Inclusion (EDI) have been taking place in the housing sector for years but despite encouraging positive examples of good practice we’re a long way from seeing it being embedded sector-wide. EDI in many organisations is still regarded as an afterthought or troublesome concept or as ‘yet another’ thing to be added to an ever-growing ‘to-do’ list. Lack of understanding and a misplaced emphasis on inputs and effort required to tackle EDI issues has for some resulted in a compartmentalised, box-ticking approach – and a missed opportunity. This has in the past been compounded by the legacy of short notice inspection, Key lines of enquiry and other sources of audit and inspection that many of you will no doubt remember.

It is with interest therefore that we see that the Financial Conduct Authority (FCA) has strongly reinforced its focus on Diversity and Inclusion and culture and governance as key priorities in their 2019/20 Plan and is publishing findings of a major research exercise undertaken in Spring 2019. In the survey, leaders (Board, HR and risk & compliance) across 100 financial services businesses were asked about attitudes, concerns and challenges relating to misconduct, culture and diversity.

The full research report will be published later in May 2019 however we can report that the findings have indicated that firms are nervous about the threats they face and under half are acting on diversity specifically to foster healthier cultures. Hiring new people is cited as the biggest challenge in creating a diverse workplace (45% of responses).

Looking to the future, one of the key cultural indicators the FCA will be considering is each firm’s approach to diversity and inclusion – as diverse Boards and workforces have been shown to reduce misconduct, risk and improve business performance.  The business case for diversity is stressed as they reiterate that firms with a poor reputation on culture and diversity can also have problems with recruitment and winning and retaining customers.

EDI is about people and housing is a people business

So what can the Social Housing Sector take from this?

Embedding EDI in any organisation requires cultural change. It requires strong leadership and buy-in from the head of the organisation and senior management to take a meaningful step forward. Inspection and regulation cannot bring about culture change on its own. Cultural change needs strong leadership and we need to remind ourselves that Housing is fundamentally a people business and EDI is all about people – it’s about treating people fairly and ensuring that we can improve outcomes for people. These should be priorities for every organisation. We need to deliver a clear message that EDI affects us all as employees, employers, our customers and the communities we serve. The business case for diversity is simple, employing people with different experiences and backgrounds will help organisations to harness different perspectives and innovation. Diversity will support fine tuning services to meet different customer’s needs and aspirations. It’s not only good for business, it is pivotal to ensuring thriving, cutting edge, relevant business and that is why it must be embedded in all that we do.