On Tuesday 29 March, financial services partner Sona Ganatra and Saima Hanif QC from 3 Verulam Buildings hosted a panel discussion on diversity and inclusion and how to break barriers in the financial services sector.
The panel comprised political party leader Gina Miller (who also co-founded SCM Direct and the True and Fair Campaign, aimed at increasing governance and accountability in the financial services sector); Henrietta Royle (CEO of project finance advisors, Operis and a founding member of the 30% Club, which campaigns for increased gender diversity at board and executive-committee levels); and Tom Hambrett (VP and Group General Counsel at Revolut, and senior member of the its executive team that leads the legal, strategic and commercial priorities of the company).
Sona opened the session highlighting the FCA and PRA’s discussion paper on achieving real change on diversity and inclusion in the industry. She emphasised how diversity of thought can lead to greater innovation, better risk management and better outcomes for the customers, employees and investors.
Diversity and Inclusion
Gina Miller welcomed the regulators’ focus the issue but warned that it had to be implemented correctly. Gina explained that the levels of diversity at the entry level of the industry have improved, in comparison to when she started her career in the City. However, the biggest issue remains at the senior end. She emphasised the importance of differentiating between diversity and inclusion: firms must focus on inclusion and understand the differences in their staff in order to ensure that they do not lose talent. Saima Hanif drew parallels with the legal profession: comparing the diverse mix of students starting their careers as barristers v the pool of those operating at QC level. The discussion then turned to the reasons for such disparity and possible solutions to resolve it.
How to implement change
Henrietta Royle pointed out that change can only begin when those at a senior level acknowledge that certain barriers exist and there is a desire to do something about it. In order to reach that acknowledgement, it may be necessary to make a business case for (i.e. focusing on the commercial benefits of) a diverse board and you may need to find “allies” to make the case for you. She highlighted that that it is incumbent on those at the top to give women and minorities opportunities that provide the depth and breadth of experience to progress and advocated setting targets to drive change.
Gina however warned against this becoming a tick box exercise and that the focus should be on changing the culture of the board. She cautioned that firms that make board changes for PR reasons do not succeed in changing their culture. It is important to hire the right people for the right reasons.
The panel all agreed that it was important for board members to identify the gaps in their skill set and address those gaps through the people it hires.
What can we learn from the disruptors in the market?
Tom Hambrett explained that disruptors, or innovators, in the financial services sector do not necessarily have all the answers. Fintechs may well be better equipped at recognising and dealing with the issue of diversity and inclusion in financial services, but they had to deal with a lack of diversity in tech.
Tom specifically mentioned the importance of the “tone from the top”; facilitating internal progression; and increased focus on recruitment processes and outreach programmes as key pillars for increasing diversity at entry level and inclusion.
Henrietta highlighted how male performance reviews often focussed on career progression and potential but for women their reviews often focussed on what they needed to fix and what they needed to do to fit in. Tom emphasised the importance of creating a culture and a structure of sponsorship and peer reviewed performance reviews in order to guard against this bias.
Do we require legislative change?
The session concluded with a debate around the disparity between men and women at senior positions and the broad range of reasons why certain people leave their careers at different points in time.
The panel identified the importance of neutral family friendly policies and flexible working policies; recognising the joint role mothers and fathers play and also recognising that people may have different caring responsibilities. The panel ended with calls for legislation to provide greater equality in shared parental leave in order to facilitate change.