The FCA delays DE&I reporting requirements: Why doing the right thing still matters
In an article this week for Professional Adviser, Jo Keddie discusses the Financial Conduct Authority’s (FCA) decision to delay the long-awaited Non-Financial Misconduct (NFM) regulations and no longer proceed with its proposed mandatory Diversity, Equity, and Inclusion (DE&I) disclosures.
Jo believes this retreat from proactive DE&I encouragement and the delay in addressing the rising number of NFM incidents in the finance sector is concerning. Firms should not be complacent and should continue prioritising DE&I initiatives, not least to avoid legal, reputational, and financial risks.
Why this development is disappointing
The FCA’s decision to delay the NFM regulations until June 2025, falls against the backdrop of increasing workplace misconduct, which served to highlight the need for accountability by firms and for action and sanctions by the FCA. The FCA’s own 2023 survey recorded over 2,300 allegations of misconduct, highlighting the urgent need for intervention. The return to the office post-pandemic has seen a rise in bullying and discriminatory behaviour. Stronger regulatory oversight is essential to ensure firms take misconduct seriously.
Upholding good DE&I policies and initiatives
Strong DE&I policies help foster an ethical and sustainable workplace. Rolling back on these initiatives is a retrograde decision, and firms that do so may well fall behind their competitors in terms of investor and stakeholder expectations, talent retention, and regulatory profile.
The FCA’s announcements may represent a disappointing shift in regulatory momentum, but workplace culture remains a critical risk area for financial institutions. Firms must continue to uphold robust DE&I practices and take proactive steps to address misconduct to avoid litigation and reputational damage.
Read the full article here (behind a paywall).
Subcribe to news and viewsAhead of the new regulations, firms cannot be complacent. They should be clearly defining what constitutes NFM, implementing procedures for addressing it, ensuring senior leaders understand their responsibilities, and, in my view reviewing internal governance and HR processes to align with the FCA's expectations.
https://www.professionaladviser.com/opinion/4411700/fcas-volte-doing-matters
