By Daniela Barone Soares, OBE, CEO, Snowball
So, the Financial Conduct Authority (FCA) has officially paused its plans for diversity, equity and inclusion (DEI) targets. While no one wants overly burdensome regulations, this move risks undermining DEI’s importance, reducing it to a trend that can be ignored.
Worse, it perpetuates the myth that DEI is an overhead rather than an opportunity. A particular bugbear of mine is the idea of the so-called ‘DEI hire’. Has anyone ever actually encountered one? The truth is, no employer deliberately hires someone they don’t believe will succeed – regardless of background. The notion that diverse candidates are a compromise is outdated and simply wrong. The reality is that if companies aren’t embracing diversity, they’re effectively turning away a huge portion of the talent pool.
As a female CEO from an ethnically minoritised background, I’m proud to head a team where women hold over half of our senior leadership, board and investment decision-making roles. But despite our progress, the broader industry lags. Among our best fund managers, 92% have DEI policies, yet only 10% of senior leaders come from minoritised groups, and just 28% are women. While this is better than the industry average, the pace of change is too slow.
As a FTSE board member, I’ve also watched closely the progress of the Parker Review, which in 2017 set a target for boards to include at least one director from an ethnic minority background. The latest data shows that 95% of the FTSE 100 companies met the target – a significant improvement.
The FCA once championed DEI as essential for reflecting the diversity of society, but in stepping back, it risks undermining that vision. DEI is about creating an environment where everyone can thrive. As investment managers, we see a connection between DEI progress and strong business performance.
Diversity is ultimately about unlocking talent and making better decisions. As the FCA bows out, let’s step up. A stronger, more inclusive financial industry is ours to build – and ours to benefit from.
This article originally appeared in the April issue of Portfolio Adviser magazine