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Proactive steps for employers embracing diversity and inclusion to shape the future of the UK financial sector – data

By Alison Weatherhead, Sarah Jackman, and Katharine Harle
November 17, 2023
  • Data protection
  • Discrimination
  • Equality Act
  • Financial Conduct Authority
  • Financial Services
  • Privacy
  • Prudential Regulation Authority
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As we reported in an earlier blog post, the UK’s financial regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), have published proposals to boost diversity and inclusion (D&I) in the financial services sector (FCA CP23/20 and PRA CP18/23). The proposals are aimed at supporting healthy work cultures, reducing groupthink, unlocking talent and supporting better firm governance and decision-making.

Consultation is open until 18 December 2023 and the regulators have been engaging with interested parties on the proposals, encouraging comments and challenges to the proposals. In a series of blog posts, we will explore some practical steps to be considered at this stage. While we may see some adjustments in the Policy Statement due next year, it is likely that the core concepts will remain the same.

The FCA’s proposals require regulated firms with 251 employees or more to report annually on the diversity of their employees. We highlight below some questions that could be explored in preparation.

  • Consider what data is currently available – how well do you understand your employee population just now?
  • How many employees do you employ and in what locations?
  • What data is available on the diversity profile of the areas in which we operate?
  • How does our mix of people compare with that data?
  • What gaps are there in the data we gather at the moment? Do we ask employees to tell us their:
    • date of birth;
    • sex or gender;
    • disability or long-term health condition(s);
    • ethnicity;
    • religion; or
    • sexual orientation?

These are the mandatory characteristics to be reported, with employees to be given the option to respond with “prefer not to say”.

  • When we record data just now, do we use the categorisations proposed by the FCA? These are:
ReligionEthnicitySexual orientation
No religionWhiteHeterosexual or Straight
Christian (all denominations)Mixed or multiple ethnic groupsGay or Lesbian
BuddhistAsian or Asian BritishBisexual
HinduBlack or Black BritishOther sexual orientation
JewishOther ethnic group 
Muslim  
Sikh  
Any other religion  
  • Do we currently gather any of the data types that are being encouraged as voluntary disclosures:
    • gender identity;
    • socio-economic background;
    • parental responsibilities for a child/children under 18; or
    • carer responsibilities: health conditions/old age?
  • How do we assess the level of trust with our people when we ask them to share data of this nature with us? How will we plan to build that trust?
  • If we are going to change the data we record, what steps will we need to take to ensure that we comply with data protection requirements?
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Data Protection, Discrimination, Equality Act, financial conduct authoirty, financial services, Privacy, Prudential Regulation Authority
Alison Weatherhead

About Alison Weatherhead

Alison supports and advises clients on the full range of human resource queries and acts for clients in employment tribunals and judicial mediations, predominantly for employers. Her experience in tribunals includes advising on unfair dismissal, disability discrimination claims, whistleblowing claims and unlawful deductions from wages.

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Sarah Jackman

About Sarah Jackman

Sarah specializes in employment law and is counsel in Dentons’ Glasgow office. She joined Dentons in 2019, bringing extensive experience in leading an in-house employment law team in the financial services sector. In her previous role, Sarah supported strategic initiatives following the financial crisis and, as a senior leader in the Legal and Governance team, led employees through cultural change and digitalization. Sarah led employment advice on significant change projects, including a demerger, IPO and acquisition of another bank.

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Katharine Harle

Katharine Harle

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