© Reuters. FILE PHOTO: City of London Financial District, Great Britain, Nov. 5, 2020. REUTERS / John Sibley / File Photo
LONDON (Reuters) – Senior managers at financial firms could see their salary tied 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 the Financial Conduct Authority said that greater diversity and inclusion improved the way businesses are run and decisions are made, 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 accelerate progress on diversity and inclusion in the financial firms he regulated.
“Lack of diversity of thought can lead to a lack of challenge to accepted views and ways of working, which runs the risk of compromising the safety and soundness of companies,” said Woods.
Regulators are considering whether companies should have a senior manager with specific responsibility for diversity and inclusion policies, holding them accountable to regulators for their actions.
“Linking progress in diversity and inclusion with compensation could be a key tool for driving corporate responsibility and incentivizing progress,” the discussion paper said.
The discussion paper is open for public consultation until September 30 and an additional consultation on detailed proposals will take place in the first quarter of 2022.
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