When diversity means business

The financial services industry has won the ‘philosophical battle’ on representation, but what’s next?

With many companies pushing for greater diversity and some committing to 50-50 gender balance, the financial services industry is on a mission to mirror wider society. But what about more ‘hidden’ groups?

“Among other minorities, LGBT has been a more silent one,” Paul Thompson, founder of LGBT Capital and chairman of Equality Wealth, told our sister publication International Adviser.

“It presents extra challenges because it mainly relies on self-declaration.”

Representation

There is no doubt that things have changed for the better for lesbian, gay bi-sexual and transgender (LGBT) professionals in several industries; but they are still, somewhat, underrepresented in financial services.

This could mean the industry is missing out on a huge talent pool.

“People often go into industries where they see themselves represented,” Charlie Nicholls, partner at wealth management firm Equality Capital, said to International Adviser.

“[LGBT representation] is definitely lower than in other industries. That tends to be because it’s weighted more towards older people and less younger people are coming in.”

And because LGBT professionals looking to make it in the financial services industry do not feel represented, organisations need to go the extra mile.

Darren Rickards

Darren Rickards, managing director at Bank of America Merrill Lynch (BAML), told International Adviser: “There is a very welcome, but not consistently applied, recognition that diversity in terms of perspectives, experiences and points of view is valuable in itself.

“It’s not just a case of being nice to LGBT+ people and it is not just ticking a box. It’s the case that diverse opinions actually have a considerable value.”

Change starts at the top

The most visible firms need to be the ones paving the way for LGBT inclusion in the workplace; something that the Financial Conduct Authority (FCA) has made a priority.

Being the regulator, the FCA should, and is, setting the example and the best practice benchmark for the industry to follow.

Georgina Philippou

“It is important to have diversity to better understand the wider society, so that we can encourage diversity of thought and innovation,” said Georgina Philippou, chief operating officer at the FCA, when talking to International Adviser.

“We have a duty, under the public sector equality regime, about eliminating discrimination, advancing equality and opportunities.”

From setting up LGBT+ employee networks and ally networks, to having visible role models, the regulator is setting the tone for what diversity should look like going forward.

The FCA sets an example as a regulator, but it is also an employer.

So, while it talks to other firms about having the right culture and increasing psychological safety for their LGBT staff, it also talks to other organisations about sharing best practice and ideas, Philippou said.

“Because we have a high profile, firms are interested in engaging in conversation with us.”

This commitment saw the FCA recognised by LGBT+ campaign group Stonewall as the 69th most inclusive employer in the UK in 2019.

What others are doing

A similar commitment was shown by BAML, which also featured in the top 100 list, taking the 50th position.

“Our policies consider all forms of LGBT across the spectrum, not only same-sex marital, medical and pension benefits; but also, we were one of the firsts, in terms of transgender rights, to offer gender reassignment surgery,” Rickards added.

“This whole change starts at the top. It’s not just about believing in the value of diversity, but being seen to believe it and living it.”

Similarly to the FCA, it also has networks and role models, as well as a ‘reverse LGBT mentoring scheme’, where people in the LGBT networks “act as mentors to senior managers about what it is like to be LGBT in the workforce”.

“More diverse boards have higher earnings models, there is a commercial reason why we should be more diverse,” he added.

“It’s good for our shareholders and it’s good for business.”

To be more diverse, but how?

But commitment needs to go “beyond the photography of diversity”, Rickards said.

That means that while policies and best practice are highly encouraged, sometimes there is a more “physical and structural” change that needs to happen, especially when considering the needs of transgender people.

As a matter of fact, both the FCA and BAML have gender neutral toilets in their buildings.

“A key issue discussed in the LGBT network was gender neutral toilets and what kind of facilities to provide for gender neutral toilets,” Philippou said.

Similarly, Rickards said: “We have gender neutral facilities, and gender neutral language is in all our policies and is universally applicable.”

However, the implementation of such facilities can be costly, and although organisations like the FCA and BAML have the resources to put them in place, smaller firms might not.

Learn to ‘borrow’

Resources can be an issue, but there are many measures firms can use, Rickards said. “Firms should be tapping into the resources available, like Stonewall’s guidelines and best practice.

“If you don’t have LGBT role models, borrow them.”

Firms should also not be afraid to ask for help.

The FCA and BAML also benchmark their diversity policies for the companies that work for and with them.

“It’s about making it known that we are open to diverse talent,” Philippou said.

Next steps: where to go?

Matt Cameron, managing director at LGBT Great, told International Adviser that, going forward, firms need to understand that discourse and commitment to gender equality does not only mean a male-to-female balance in numbers.

“A lot of people tend to forget that LGBT is not just about sexual orientation, it’s also about gender identity.

“LGBT is part of the gender agenda.”

That is something Rickards believes too. “There is a need to recognise the next steps, looking at the nuance. Change is coming much faster, which is a good thing, but also much faster than some institutions and structures can keep up with.”

Which is why the next theme needs to be around intersectionality, Philippou said. “None of us identifies with only one group, we all have complex personalities, have multiple identities that make us what we are.

“I think that future challenges will be about intersectionality and social mobility, about allowing diverse people to thrive in the workplace.”

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