Financial services must address 'deep' diversity issues - Nikhil Rathi
New FCA chief executive's plea to MPs
The financial services industry is grappling with "deep" diversity issues which, if they are not properly addressed, may become a supervisory issue, Nikhil Rathi has told MPs.
The Financial Conduct Authority's new chief executive said it was very important that organisations, including the watchdog itself, made progress on diversity as quickly as possible.
Speaking to the Treasury Committee on 22 July, he said: "I will be leading on diversity and I will also be expecting the entire executive team to be leading on these issues. The priorities are people and culture.
"The FCA has a role to support a more diverse financial services sector. This is a conversation that has been evolving in recent years."
Rathi said the Women in Finance Charter is an important initiative but more needed to be done.
"I would have an expectation over the coming years to see boards and senior leadership at major financial institutions working hard on this issue, to deliver diversity - if that is not happening it becomes then, at some point, it becomes a supervisory matter."
The 'looking at your shoes' moment: Let's talk about race
Rathi said recruitment processes and hiring practices within the FCA would be reviewed and he would not be opposed to removing candidate names from CVs to ensure no bias creeps in.
"There are deep issues in financial services industry in terms of the talent pipeline, how talent is attracted and how it is developed. There are issues to be discussed around unconscious bias.
"Black Lives Matter has opened the discussion. Having uncomfortable conversations is going to become very important. I am open-minded about no names shortlisting."
The new CEO also said "group think" was a problem within financial services firms.
"It has improved but it is up to a responsible supervisor to challenge on those issues," he added.
Rathi was confirmed as Andrew Bailey's permanent replacement as head of the FCA on 22 June. Christopher Woolard has served as interim-CEO.
Rathi, who will earn just shy of £500,000 a year at the FCA, was previously chief executive of the London Stock Exchange.
From September 2009 to April 2014 he was financial services group director at HM Treasury.
He is expected to take up his new position in the autumn.
This article first appeared on our sister title Professional Adviser
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