Source · Select Committees · Treasury Committee
Recommendation 8
8
Deferred
Cease regulator plans for extensive data reporting and diversity target setting requirements.
Recommendation
We recommend that the regulators drop their plans for extensive data reporting and target setting. In our view, a lack of diversity is a problem that the market itself should be able to solve without such extensive regulatory intervention. Boards and senior leadership of firms should take greater responsibility for improving diversity and inclusion given that it should lead to a competitive advantage in the development of talent. Firms that perform best on diversity and inclusion and have the best cultures should be able to benefit from the clear business advantages this provides, leaving those that perform badly in these areas to suffer the consequences for their reduced competitiveness and profitability. (Paragraph 48) Barriers facing women
Government Response Summary
The PRA and FCA state they will carefully consider the Committee's recommendation to drop their plans for extensive data reporting and target setting, taking into account other consultation responses, before finalising their policy.
Government Response
Deferred
HM Government
Deferred
**PRA Response:** We thank the Committee for its recommendations in relation to data and target setting, which were one part of the wider package of proposals in the CP. We will consider these recommendations carefully alongside the other responses to the CP when finalising our policy. Our data collection, disclosure and reporting proposals had two main aims: to produce an aggregated industry-wide benchmarking report and to help build an evidence base for regulatory intervention. Our assessment was that the market was finding it difficult to improve diversity and inclusion. In relation to targets, the CP proposed that the largest firms would be required to set their own targets where they identify under-representation. Importantly, under our proposals, it would be up to firms to decide what targets were appropriate to their specific context, and the regulator would not set numerical targets or quotas. We will continue to consider the position carefully, including in light of the Committee’s recommendations. **FCA Response:** We are grateful to the Committee for their recommendations in relation to our policy proposals around data collection and target setting. We will consider carefully the Committee’s recommendation as we formulate our policy response in conjunction with the Prudential Regulation Authority. We remain committed to achieving healthy cultures, where everyone is included and able to progress, whilst being careful not to impose unnecessary costs on the industry. We agree that data collection should not be a tickbox exercise without an appropriate focus on outcomes. Taking into account the Committee’s recommendations, we are now prioritising our work on non-financial misconduct, including sexual harassment and bullying, and it will take some time to fully consider the very wide range of responses we have received to our proposals on diversity and inclusion. We will also consider what data may be needed to effectively deliver the other recommendations made to regulators by the Committee.