EDI strategy alignment: the FCA, risk and connecting strategies with culture

As we build training for clients, we often embed red threads through our sessions – learning objectives that we want to weave into every message. Leaders at the FCA are doing the same with messages on diversity and inclusion.

The FCA’s views on inclusion, duty and risk

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Two recent speeches at the FCA, one by Sheree Howard, Executive Director of Risk and Compliance Oversight on 15 November 2023 and the other by Emily Shepperd, Chief Operating Officer and Executive Director of Authorisations on 23 November 2023 weave the FCA’s consultation paper on diversity and inclusion into their speeches on culture, the new consumer duty and risk.

The deadline to respond to the consultation paper which has been published in conjunction with the PRA is 18 December 2023, details can be found here CP23/20: Diversity and inclusion in the financial sector – working together to drive change | FCA. The proposals are not one size fits all but they do clarify expectations on non-financial misconduct and establish reporting and disclosure requirement for larger firms. There are also proposals about firms putting in place diversity and inclusion strategies.

Emily Shepperd’s speech in particular focuses on the need for cohesive purpose behind diversity and inclusion strategies and the need for specific goals, she refers to the 2022 review where the FCA found that, “While there were thoughtful initiatives underway, many firms’ strategies were generic and did not take a holistic view. They lacked both a clear articulation of purpose and actions oriented to achieving their goals.”

Sheree Howard focuses on the need for challenge,

“Being able to challenge – even the boss – is crucial. Employees should feel free to speak up and even more importantly, bosses should feel compelled to listen up."

Connecting your EDI strategy with culture

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This need for connecting our diversity and inclusion strategies with our culture, our risk appetite and the focus on speaking up and listening up is crucial for making progress. It is as we connect and reflect on each interaction and element of our strategy that we make progress. Strategy is underpinned by every day behaviour that is driven by culture. This connection needs to be reflected in how strategies, culture and implementation are built and reviewed within organisations – this is not something for just the diversity and inclusion team or just HR.

To make the progress the regulators expect and businesses need to thrive in itself requires diversity and inclusion and needs to be considered across compliance, risk, legal, finance, learning and development and HR as well as be made a priority for those in customer and client facing roles. The approach used to build the strategy should reflect the inclusive strategy organisations are trying to build – employee networks need to be listened to and creative ideas implemented, reviewed and then further developed.

Your EDI strategy response

If you would like to discuss your response to the consultation paper, your diversity and inclusion strategy and how to embed it into your culture, please let us know.

At byrne·dean, we offer comprehensive EDI training designed to equip employees with the tools to promote fair treatment, reduce bias and foster a culture of respect in the workplace. We help you build stronger teams, enhance collaboration, and comply with equality legislation, supporting you to improve employee engagement and performance. 

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FAQs

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What are the key EDI principles?

Equality, diversity and inclusion are the key principles of inclusive organisations. Equality ensures everyone has equal opportunities to succeed; diversity values people's differences, and inclusion creates an environment where everyone feels valued.

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What does a good EDI strategy look like?

A strong EDI strategy is dynamic, comprehensive, actionable and measurable. It will help create a workplace where everyone feels valued and has equal opportunities to succeed. Key elements include leadership commitment, measurable goals, inclusive policies and ongoing training to address unconscious bias and non-inclusive behaviours. It also encourages employees to report incidents whilst promoting transparency through regular reporting. A strong EDI strategy must evolve with the organisation's needs and societal changes to ensure a lasting impact. 

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How to implement an EDI strategy?

Implementing an EDI strategy is a continuous, ongoing process and should be treated as a long-term strategic objective. It will take different forms depending on the nature of your business, its setup, size, and other factors. Regular assessments are essential to identify gaps and areas for improvement. Clear goals are most effective when aligned with business planning, with measurable objectives focused on areas of greatest need. These goals and progress should be communicated to all employees using inclusive language and accessible formats. Leadership buy-in is also crucial, and executive training may be required to highlight the importance of EDI. From there, you can develop an action plan to address identified gaps, establish policies, and integrate EDI considerations into all aspects of your organisation.

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Are you ready to embed your EDI strategy into your company culture?

Contact our team of behaviour experts to find out more.

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