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FCA asks financial firms to review staff pay in inclusivity bid

  • 03/08/2021
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FCA asks financial firms to review staff pay in inclusivity bid
The Financial Conduct Authority (FCA) has asked financial firms to review the pay of employees across all characteristics to address any disparities.


In a letter published today the regulator said: “Increasing the diversity of your workforce and fostering an inclusive environment, where every member of staff is valued for their contributions, is a key element of a healthy culture.  

“We recognise the steps firms have already taken to embed diversity and inclusion but there is much more that needs to be done.” 

In light of its discussion paper published in collaboration with the Bank of England and the Prudential Regulatory Authority (PRA) last month, the FCA said it also wanted to hear the industry’s views on linking remuneration to diversity and inclusion metrics. 

It said this was a part of a non-financial performance assessment to track progress and drive accountability within firms. 

This update comes after the FCA, PRA and Bank of England issued a consultation on how to improve diversity and inclusion within the financial sector. 

The letter, which was addressed to a firm’s chair of the remuneration committee, said the Senior Managers and Certification Regime (SM&CR) was a tool to ensure high standards of conduct and culture. 

The regulator said the regime could give a clear link between behaviours and remuneration outcomes. 

It also said the chair of a firm’s remuneration committee had a role in making sure policy supported and connected outcomes to a company’s priorities, purpose and values. 

“During these challenging times, we have observed firms redefining their purpose to support the issues that really matter to them and in the context of environmental, social and governance (ESG) issues, particularly the ‘social’ element,” it said.

“We expect to see more firms using non-financial measures in scorecards to support ESG factors,” it said. 

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