Financial sector’s EDI struggles highlight need for strong leadership

• Aparna Sreevalsan
• 4 December, 2023

THE FINANCIAL services industry is grappling with significant challenges in its efforts towards equity, diversity, and inclusion (EDI), according to a recent investigation involving 800 professionals with a decade or more of experience.

The study exposed persistent barriers hindering the career advancement of ethnic minorities, with 56 per cent citing a lack of networks and 59 per cent noting a scarcity of role models with similar identities or backgrounds.

The Race to Equality: UK Financial Services report, was conducted by Reboot, a campaign organisation of senior financial services professionals.

Main findings include:

• While there has been a gradual increase in the representation of ethnic minorities at senior levels (rising from 29 per cent in 2021 to 32 per cent in 2023), progress remains moderate.
• A concerning trend, indicating a decline in the average EDI score for financial services firms from 67 to 65 out of 100 over the past year, a trend persisting over the last three years. This stagnation in progress is particularly evident in the EDI score, which has held steady at 65 since 2021.
• Inadequacies in senior leadership’s commitment to addressing racism in the workplace is found to be the major reason behind this decline.
• Almost half (48 per cent) cited a lack of understanding by senior leaders about the impact of racism, while 43 per cent believed that leadership feared potential backlash from within or outside the organisation.
• Substantial measures taken by CEOs and leaders could bring about positive change across the entire organisation; 81 per cent of employees reported.

It also points out critical areas for improvement, with over half of respondents stressing the need for enhanced representation and mentorship.

The report stresses the urgency of accelerated progress to create a diverse range of role models for junior and mid-level employees.

Helena Morrissey, chair of the Diversity Project UK and Reboot advisory board member, said: “Real lasting change within organisations can only happen if there is continuous, proactive commitment from CEOs and senior leaders to actively address and confront racism. This obviously cannot take place overnight, but it is important that senior leaders do not drop the ball amid other socio-economic issues.

“They must remember that their stance on racism will strongly shape organisation culture. Ultimately, actions speak louder than words.”